PRINTER'S NO. 1065
No. 946 Session of 2001
INTRODUCED BY RUBLEY, STEIL, ALLEN, BUNT, CAPPELLI, DAILEY,
DALEY, FAIRCHILD, FICHTER, FREEMAN, GABIG, GRUCELA, HANNA,
HASAY, HENNESSEY, HERSHEY, LAUGHLIN, LEH, McCALL, MELIO,
R. MILLER, MUNDY, MYERS, NAILOR, PHILLIPS, READSHAW, SATHER,
STEELMAN, R. STEVENSON, STURLA, E. Z. TAYLOR, TIGUE, WILT AND
YUDICHAK, MARCH 13, 2001
REFERRED TO COMMITTEE ON FINANCE, MARCH 13, 2001
AN ACT
1 Authorizing counties to impose sales and use, personal income or
2 earned income and net profits taxes; and providing for the
3 levying, assessment and collection of taxes and for the
4 powers and duties of the Department of Community and Economic
5 Development or any successor agency, the Department of
6 Revenue and the State Treasurer.
7 TABLE OF CONTENTS
8 Chapter 1. General Provisions
9 Section 101. Short title.
10 Section 102. Definitions.
11 Section 103. Scope.
12 Section 104. Preemption.
13 Section 105. Rates of taxation in home rule counties.
14 Chapter 3. Subjects of Taxation
15 Subchapter A. Tax Authorization
16 Section 301. General tax authorization.
17 Section 302. Continuity of tax.
18 Section 303. Election to participate under act.
1 Section 304. Local tax study commission.
2 Subchapter B. County Sales and Use Tax
3 Section 311. Construction.
4 Section 312. Imposition.
5 Section 313. Situs.
6 Section 314. Licenses.
7 Section 315. Rules and regulations; collection costs.
8 Section 316. Procedure and administration.
9 Section 317. County sales and use tax funds.
10 Section 318. Disbursements.
11 Section 319. Adoption of municipal ordinances and school
12 district petitions.
13 Section 320. Allocations and qualifications.
14 Subchapter C. Personal Income Tax
15 Section 321. Construction.
16 Section 322. Personal income tax.
17 Section 323. Collections.
18 Section 324. Rules and regulations; collection costs.
19 Section 325. Procedure and administration.
20 Section 326. Local personal income tax funds.
21 Section 327. Disbursements.
22 Subchapter D. Earned Income and Net Profits Tax
23 Section 331. Earned income and net profits tax.
24 Section 332. Collections.
25 Section 333. Rules and regulations.
26 Section 334. Procedure and administration.
27 Chapter 5. Credits, Exemptions and Deferrals
28 Section 501. Credits.
29 Section 502. Low-income tax provisions.
30 Section 503. Regulations.
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1 Chapter 7. Disposition of Tax Revenues
2 Section 701. Sales tax revenues.
3 Section 702. Personal income tax revenues.
4 Section 703. Revenue limitation exceptions.
5 Chapter 9. Register for Certain Taxes
6 Section 901. Definitions.
7 Section 902. Register for taxes under this act.
8 Section 903. Information for register.
9 Section 904. Availability and effective period of register.
10 Section 905. Effect of nonfiling.
11 Section 906. Effect of chapter on liability of taxpayer.
12 Chapter 13. Miscellaneous Provisions
13 Section 1301. Effective date.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 CHAPTER 1
17 GENERAL PROVISIONS
18 Section 101. Short title.
19 This act shall be known and may be cited as the Optional
20 County Tax Reform Act.
21 Section 102. Definitions.
22 The following words and phrases when used in this act shall
23 have the meanings given to them in this section unless the
24 context clearly indicates otherwise:
25 "Board of county commissioners." Includes the successor in
26 function to the board of county commissioners in a county which
27 has adopted a home rule charter under the provisions 53 Pa.C.S.
28 Pt. III Subpt. E (relating to home rule and optional plan
29 government), but does not include the city council of a city of
30 the first class or the board of county commissioners of a county
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1 of the second class.
2 "Classes of income." The classes of income set forth in
3 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
4 the Tax Reform Code of 1971.
5 "Compensation." As defined in section 301 of the act of
6 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
7 1971.
8 "County." A county-level municipality within this
9 Commonwealth, regardless of classification. The term includes a
10 county which has adopted a home rule charter or optional plan of
11 government under the provisions of 53 Pa.C.S. Pt. III Subpt. E
12 (relating to home rule and optional plan government). The term
13 does not include a county of the first class or a county of the
14 second class.
15 "Current year." The calendar year or fiscal year for which
16 the tax is levied.
17 "Department." The Department of Revenue of the Commonwealth.
18 "Domicile." As defined in section 13 of the act of December
19 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
20 Act.
21 "Earned income." The classes of income defined as "earned
22 income" in section 13 of the act of December 31, 1965 (P.L.1257,
23 No.511), known as The Local Tax Enabling Act.
24 "Employer." As defined in section 301 of the act of March 4,
25 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
26 "Governing body." The board of county commissioners,
27 including the successor in function to the board of county
28 commissioners in a county which has adopted a home rule charter
29 under the provisions of 53 Pa. C. S. Pt. III Subpt. E (relating
30 to home rule and optional plan government). The term does not
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1 include the board of the county council of a county of the
2 second class.
3 "Homestead." As defined in 53 Pa.C.S. § 8401 (relating to
4 definitions).
5 "Individual." As defined in section 301 of the act of March
6 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
7 "Local Tax Enabling Act." The act of December 31, 1965
8 (P.L.1257, No.511), known as The Local Tax Enabling Act.
9 "Municipality." A city of the second class, city of the
10 second class A, city of the third class, borough, incorporated
11 town, township of the first class, township of the second class,
12 home rule municipality, optional plan municipality, optional
13 form municipality or similar general purpose unit of government
14 which may hereafter be created by statute, except a city of the
15 first class.
16 "Nonresident." An individual domiciled outside the
17 municipality.
18 "Ordinance." Includes a resolution.
19 "Personal income." The classes of income enumerated in
20 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
21 the Tax Reform Code of 1971, and upon which is imposed a
22 personal income tax by the Commonwealth.
23 "Preceding year." The calendar year or fiscal year before
24 the current year.
25 "Register." The register provided for in Chapter 9.
26 "School district." A school district of the first class A,
27 second class, third class or fourth class, including any
28 independent school district.
29 "Succeeding year." The calendar year or fiscal year
30 following the current year.
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1 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
2 known as the Tax Reform Code of 1971.
3 "Taxpayer." An individual required under this act to file a
4 tax return or to pay a tax.
5 Section 103. Scope.
6 It is the intent of this act to confer upon each county the
7 power to levy, assess and collect taxes upon the subjects of
8 taxation set forth in this act.
9 Section 104. Preemption.
10 No act of the General Assembly heretofore or hereafter
11 enacted shall vacate or preempt any ordinance passed or adopted
12 under the authority of this act or any other act providing
13 authority for the imposition of a tax by a county, unless the
14 act of the General Assembly expressly vacates or preempts the
15 authority to pass or adopt such ordinances.
16 Section 105. Rates of taxation in home rule counties.
17 A home rule county shall not have the right or authority to
18 fix the rate of taxation for the subjects of taxation authorized
19 under Chapter 3 in excess of the rates fixed in Chapter 3.
20 CHAPTER 3
21 SUBJECTS OF TAXATION
22 SUBCHAPTER A
23 TAX AUTHORIZATION
24 Section 301. General tax authorization.
25 (a) General rule.--Subject to section 303 and except as
26 provided in subsection (b), each county shall have the power and
27 may by ordinance levy, assess and collect or provide for the
28 levying, assessment and collection of taxes on the sale or use
29 of tangible personal property and services and the occupancy of
30 a hotel room at a rate of 1%, on the personal income of resident
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1 taxpayers up to a maximum rate of 0.5% in increments of 0.25% or
2 on the earned income of resident taxpayers up to a maximum rate
3 of 0.5% in increments of 0.25% for general revenue purposes as
4 it shall determine on any or all of the subjects of taxation set
5 forth in this act within the geographical limits of the county.
6 (b) Exclusions.--No county which levies a tax authorized by
7 this act shall have any power or authority to levy, assess or
8 collect:
9 (1) A tax based upon a flat rate or on a millage rate on
10 an assessed valuation of a particular trade, occupation or
11 profession, commonly known as an occupation tax.
12 (2) A per capita, poll, residence or similar head tax.
13 (3) The intangible personal property tax under the act
14 of June 17, 1913 (P.L.507, No.335), referred to as the
15 Intangible Personal Property Tax Law.
16 Section 302. Continuity of tax.
17 Every tax levied under the provisions of this act shall
18 continue in force on a calendar year basis, as the case may be,
19 without annual reenactment unless the rate of tax is increased
20 or the tax is subsequently repealed.
21 Section 303. Election to participate under act.
22 (a) General rule.--
23 (1) Any governing body which desires to participate
24 under the provisions of this act shall make that
25 determination by using the procedures set forth in subsection
26 (b).
27 (2) Any governing body after making an election to
28 participate under this act may, after a period of at least
29 three full calendar years of participation, elect, under the
30 provisions of subsection (b), to cease participation under
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1 this act and levy, assess and collect the taxes prohibited by
2 section 301(b) to the extent otherwise provided by law.
3 (b) Public referendum.--Subject to the notice and public
4 hearing requirements of section 316(a), 325(a) or 334, whichever
5 is applicable, a governing body may elect to participate under
6 this act by obtaining the approval of the electorate of the
7 affected county in a public referendum at the November election
8 preceding the calendar year when the taxes will be initially
9 imposed. The referendum question must state the initial rate of
10 the proposed tax.
11 (c) Increase in tax rate limited.--Following an election to
12 participate under this act, the governing body may only increase
13 the tax rate in the following cases:
14 (1) If an increase in local expenditures is necessary to
15 respond to or recover from an emergency or disaster declared
16 by the Governor.
17 (2) If the political subdivision is required to
18 implement a court decision.
19 (3) To pay interest and principal on any indebtedness
20 incurred under the provisions of 53 Pa.C.S. Pt. VII Subpt. B
21 (relating to indebtedness and borrowing).
22 (4) To pay increases in pension fund requirements which
23 are in excess of the annual average increase over the
24 immediately preceding five fiscal years.
25 (5) To respond to a municipality declared to be
26 distressed under the act of July 10, 1987 (P.L.246, No.47),
27 known as the Municipalities Financial Recovery Act.
28 (6) To increase revenues when actual revenues decline
29 from the immediately preceding year, but only to the extent
30 of the revenue decline.
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1 (7) To respond to a Federal or State statute, regulation
2 or order adding to or significantly altering responsibilities
3 and duties or requiring expenditure of county funds to the
4 extent not funded by the Federal or State Government. This
5 provision shall apply only to a Federal or State statute,
6 regulation or order taking effect after the effective date of
7 this act.
8 Section 304. Local tax study commission.
9 (a) First-year implementation.--Before any county levies,
10 assesses or collects or provides for the levy, assessment or
11 collection of any tax under the authority of this act, the
12 governing body may appoint a local tax study commission in
13 accordance with the following provisions:
14 (1) The local tax study commission shall consist of
15 five, seven or nine members appointed by the governing body.
16 One member of the local tax study commission may be a member
17 of the governing body, as deemed appropriate by the governing
18 body. No member of the local tax study commission shall be a
19 relative, by blood or marriage, of an official or employee of
20 the county. All members shall be residents of the county.
21 Representatives on a local tax study commission must
22 reasonably reflect the socioeconomic, age and occupational
23 diversity of the county.
24 (2) The governing body shall provide necessary and
25 reasonable staff to support the local tax study commission
26 and shall reimburse the members of the local tax study
27 commission for necessary and reasonable expenses in the
28 discharge of their duties.
29 (3) The local tax study commission shall study the
30 existing taxes levied, assessed and collected by the county
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1 and determine if and how the tax policies of the county could
2 be strengthened or made more equitable by adopting for levy,
3 assessment and collection one or a combination of any of the
4 following taxes: personal income tax, real estate tax, sales
5 tax or earned income and net profits tax at such levels and
6 in such combinations on permissible subjects of taxation as
7 do not exceed the limitations in this act. This study shall
8 include, but not be limited to, consideration of all of the
9 following:
10 (i) Historic rate and revenue provided by taxes
11 currently levied, assessed and collected by the county.
12 (ii) The percentage of total revenues provided by
13 taxes currently levied, assessed and collected.
14 (iii) The age, income, employment and property use
15 characteristics of the existing tax base.
16 (iv) The projected revenues of any taxes currently
17 levied, assessed and collected.
18 (v) The projected revenues of any taxes referred to
19 in this paragraph not currently levied, assessed and
20 collected by the county.
21 (4) Within 120 days of its appointment, the local tax
22 study commission shall make a nonbinding recommendation to
23 the governing body of the appropriate tax or combination of
24 taxes, identified in paragraph (3), to be levied, assessed
25 and collected commencing the next fiscal year. Upon
26 appointment of the commission and except as provided for in
27 paragraph (5), no tax may be levied, assessed or collected
28 for the next fiscal year until receipt of the recommendation
29 of the local tax study commission. No later than 30 days
30 prior to the commencement of the next fiscal year, the
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1 governing body shall accept or reject the recommendation of
2 the local tax study commission or adopt any other appropriate
3 tax or combination of taxes for the county commencing the
4 next fiscal year as provided by law.
5 (5) If the local tax study commission fails to make a
6 nonbinding recommendation within 120 days of its appointment,
7 the governing body shall discharge the appointed local tax
8 study commission and appoint itself as the local tax study
9 commission. No later than 30 days prior to the commencement
10 of the next fiscal year, the governing body shall adopt the
11 appropriate tax or combination of taxes for the county
12 commencing the next fiscal year as provided by law.
13 (6) The local tax study commission shall publish or
14 cause to be published, within 30 days of making its
15 recommendation, a final report of its activities and
16 recommendations and shall deliver the final report to the
17 chief clerk of the county who shall supply copies to any
18 interested persons upon request.
19 (7) Receipts are required for all reimbursable expenses.
20 (8) All the records, receipts, tapes, minutes of
21 meetings and written discussions of the local tax study
22 commission shall, upon its discharge, be turned over to the
23 chief clerk of the county for permanent safekeeping. The
24 chief clerk shall make such materials available for public
25 inspection at any time during regular business hours.
26 (9) The local tax study commission shall be discharged
27 upon the filing of its final report.
28 (b) Three-year review.--Any county that levies, assesses and
29 collects or provides for the levy, assessment or collection of
30 any tax, after having received the recommendations of a local
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1 tax study commission and acted, shall continue to levy, assess
2 and collect the same tax or combination of taxes for the next
3 three fiscal years. However, nothing in this act shall preclude
4 the governing body from changing or altering the rates of any
5 such tax or combination of taxes if it deems necessary. Before
6 the third fiscal year following the county action on the
7 recommendations of a local tax study commission and every third
8 fiscal year thereafter, the governing body may appoint a local
9 tax study commission in the manner provided in subsection (a).
10 The local tax study commission appointed under this subsection
11 shall be charged with all of the same powers and duties provided
12 for the local tax study commission under subsection (a). In the
13 event the county does not appoint a local tax study commission
14 under this subsection after having previously acted on the
15 recommendations of a local tax study commission, the county
16 shall continue to levy, assess and collect the same tax or
17 combination of taxes for the next three fiscal years.
18 SUBCHAPTER B
19 COUNTY SALES AND USE TAX
20 Section 311. Construction.
21 The tax imposed by the governing body of a county under this
22 subchapter shall be in addition to any tax imposed by the
23 Commonwealth under Article II of the Tax Reform Code. Except for
24 the differing situs provisions under section 313, the provisions
25 of Article II of the Tax Reform Code shall apply to the tax.
26 Section 312. Imposition.
27 (a) Sales.--The governing body of a county may levy and
28 assess upon each separate sale at retail of tangible personal
29 property or services, as defined in Article II of the Tax Reform
30 Code, within the boundaries of the county, a tax on the purchase
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1 price. The tax shall be collected by the vendor from the
2 purchaser and shall be paid over to the Commonwealth as provided
3 in this subchapter.
4 (b) Use.--In any county within which the tax authorized in
5 subsection (a) is imposed, there shall be levied, assessed and
6 collected upon the use, within the county, of tangible personal
7 property purchased at retail, and on services purchased at
8 retail, as defined in Article II of the Tax Reform Code, a tax
9 on the purchase price. The tax shall be paid over to the
10 Commonwealth by the person who makes the use. The use tax
11 imposed under this subchapter shall not be paid over to the
12 Commonwealth by any person who has paid the tax imposed by
13 subsection (a) or has paid the tax imposed by this subsection to
14 the vendor with respect to the use.
15 (c) Occupancy.--In any county within which a tax authorized
16 by subsection (a) is imposed, there shall be levied, assessed
17 and collected an excise tax on the rent upon every occupancy of
18 a room or rooms in a hotel in the county. The tax shall be
19 collected by the operator or owner from the occupant and paid
20 over to the Commonwealth.
21 (d) Rate and uniformity.--
22 (1) The tax authorized by subsections (a), (b) and (c)
23 shall be imposed at a rate of 1%.
24 (2) The tax imposed by subsections (a), (b) and (c)
25 shall be uniform.
26 (e) Computation.--The tax imposed under this section shall
27 be computed in the manner set forth in section 503(e)(2) of the
28 act of June 5, 1991 (P.L.9, No.6), known as the Pennsylvania
29 Intergovernmental Cooperation Authority Act for Cities of the
30 First Class.
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1 Section 313. Situs.
2 The situs of sales at retail or uses, including leases, of
3 motor vehicles, aircraft, motorcraft and utility services shall
4 be determined in the manner specified by section 504 of the act
5 of June 5, 1991 (P.L.9, No.6), known as the Pennsylvania
6 Intergovernmental Cooperation Authority Act for Cities of the
7 First Class.
8 Section 314. Licenses.
9 A license for the collection of the tax imposed by this
10 subchapter shall be issued in the same manner as is provided for
11 in section 505 of the act of June 5, 1991 (P.L.9, No.6), known
12 as the Pennsylvania Intergovernmental Cooperation Authority Act
13 for Cities of the First Class. Licensees shall be entitled to
14 the same discount as provided in section 227 of the Tax Reform
15 Code.
16 Section 315. Rules and regulations; collection costs.
17 (a) Regulations.--Rules and regulations shall be applicable
18 to the taxes imposed under section 312 in the same manner as is
19 provided for in section 506(1) and (2) of the act of June 5,
20 1991 (P.L.9, No.6), known as the Pennsylvania Intergovernmental
21 Cooperation Authority Act for Cities of the First Class.
22 (b) Administrative costs.--The department, to cover its
23 costs of administration, shall be entitled to retain a sum equal
24 to 1% of the revenues collected under this subchapter for its
25 administrative costs. When the annual operating budget for the
26 department is submitted to the General Assembly, the department
27 shall also submit to the chairman and minority chairman of the
28 Appropriations Committee of the Senate and to the chairman and
29 minority chairman of the Appropriations Committee of the House
30 of Representatives the actual sums retained for costs of
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1 collection in the preceding fiscal year, together with all
2 supporting details.
3 Section 316. Procedure and administration.
4 (a) Ordinance.--Any county desiring to impose the tax
5 authorized by section 312 shall give at least 60 days' written
6 notice to every municipality and school district located in the
7 county of its intent to impose the tax and shall adopt an
8 ordinance after the expiration of 60 days after the date of the
9 notice. The notice and an ordinance shall state the tax rate and
10 refer to this subchapter. The ordinance shall authorize the
11 imposition of all taxes provided for in section 312. Prior to
12 adopting an ordinance imposing the tax authorized by section
13 312, the governing body of the county shall give public notice
14 of its intent to adopt the ordinance in the manner provided by
15 section 4 of the Local Tax Enabling Act and shall conduct at
16 least one public hearing regarding the proposed adoption of the
17 ordinance.
18 (b) Notification to department.--A certified copy of the
19 county ordinance shall be delivered to the department by
20 September 1 of the year prior to the effective date of the
21 ordinance. The county ordinance shall become effective on the
22 January 1 following at least four months after the date of
23 enactment of the county ordinance.
24 (c) Delivery of repeal ordinance.--A certified copy of a
25 repeal ordinance shall be delivered to the department at least
26 30 days prior to the effective date of the repeal.
27 Section 317. County sales and use tax funds.
28 There is hereby created for each county levying the tax under
29 section 312 the (proper name) County Sales and Use Tax Fund. The
30 State Treasurer shall be custodian of the funds which shall be
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1 subject to the provisions of law applicable to funds listed in
2 section 302 of the act of April 9, 1929 (P.L.343, No.176), known
3 as The Fiscal Code. Taxes imposed under section 312 shall be
4 received by the department and paid to the State Treasurer and,
5 along with interest and penalties, less any collection costs
6 allowed under this subchapter and any refunds and credits paid,
7 shall be credited to the funds not less frequently than every
8 two weeks. During any period prior to the credit of moneys to
9 the funds, interest earned on moneys received by the department
10 and paid to the State Treasurer under this subchapter shall be
11 deposited into the funds. All moneys in the funds, including,
12 but not limited to, moneys credited to the funds under this
13 section, prior year encumbrances and the interest earned
14 thereon, shall not lapse or be transferred to any other fund,
15 but shall remain in the funds. Pending their disbursement,
16 moneys received on behalf of or deposited into the funds shall
17 be invested or reinvested as are other moneys in the custody of
18 the State Treasurer in the manner provided by law. All earnings
19 received from the investment or reinvestment of the moneys shall
20 be credited to the respective funds.
21 Section 318. Disbursements.
22 (a) General rule.--On or before the tenth day of every
23 month, the State Treasurer shall make the disbursements on
24 behalf of the county imposing the tax out of the moneys which
25 are, as of the last day of the previous month, contained in the
26 respective county sales and use tax fund.
27 (b) Disbursement to counties.--
28 (1) The State Treasurer shall disburse to a county
29 imposing the tax authorized under section 312 an amount of
30 money equal to 50% of the tax collected in that county and
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1 remitted to the department and deposited in the respective
2 county sales and use tax fund.
3 (2) An amount of money equal to the remaining 50% of the
4 tax collected in that county shall be allocated to all of the
5 municipalities and school districts within that county as
6 follows:
7 (i) Twenty-five percent shall be allocated to all
8 municipalities within the county. Each municipality shall
9 be allocated a portion as computed under section 320(a).
10 (ii) Twenty-five percent shall be allocated to all
11 school districts within the county. Each school district
12 shall be allocated a portion as computed under section
13 320(b).
14 (3) The State Treasurer shall disburse to a county, in
15 addition to its share under paragraph (1), an amount of money
16 equal to the allocations to nonqualified municipalities and
17 school districts within the county.
18 (4) The county shall deposit the revenue from the
19 respective county sales and use tax fund into the county
20 general fund for disposition as provided under section
21 701(a).
22 (c) Disbursement to municipalities.--The State Treasurer
23 shall, at the same time, disburse to the qualified
24 municipalities an amount of money equal to their allocations
25 under paragraph (2)(i). Each municipality's portion shall be
26 deposited in the municipal general fund for disposition as
27 provided in section 701(b).
28 (d) Disbursement to school districts.--The State Treasurer
29 shall, at the same time, disburse to the qualified school
30 districts an amount of money equal to their allocations under
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1 paragraph (2)(ii). Each school district's portion shall be
2 deposited in the school district's general fund for disposition
3 as provided in section 701(b).
4 (e) Penalty.--If disbursements are not made on or before the
5 tenth day of each month, a 5% penalty shall be added thereto
6 plus an additional 1% late charge per month delayed.
7 Section 319. Adoption of municipal ordinances and school
8 district petitions.
9 (a) General rule.--No municipality shall be entitled to a
10 disbursement under section 318(c) and no school district shall
11 be entitled to a disbursement under section 318(d) unless one of
12 the following applies:
13 (1) Prior to enactment of the county ordinance, it
14 adopts a municipal ordinance or a school district petition
15 containing the statement:
16 We strongly urge the county to enact a county sales
17 and use tax and intend to accept disbursements of the
18 sales and use taxes collected.
19 Any municipality which does not enact an ordinance and any
20 school district which does not enact a petition in compliance
21 with this paragraph shall not be entitled to and shall not
22 receive any distribution from funds collected during the
23 first 24 months immediately following the initial date of
24 imposition of the tax.
25 (2) Prior to October 1 of any year after the enactment
26 of the county resolution, it adopts a municipal ordinance or
27 a school district petition containing the statement:
28 We support the enactment by the county of the county
29 sales and use tax and strongly urge its continuation
30 and intend to accept disbursements of the sales and
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1 use taxes collected.
2 (b) Delivery.--A certified copy of the municipal ordinance
3 or the school district petition shall be delivered to the county
4 commissioners on or before the enactment of the county
5 resolution or October 15 of any year thereafter, as the case may
6 be.
7 Section 320. Allocations and qualifications.
8 (a) Allocations to municipalities.--The State Treasurer
9 shall compute allocations to municipalities in the following
10 manner:
11 (1) Fifty percent of the money allocated to
12 municipalities shall be pursuant to a format in which the
13 total allocation to municipalities multiplied by the ratio of
14 weighted tax revenues of the municipality divided by the sum
15 of the weighted tax revenues of all municipalities located in
16 the county.
17 (2) Fifty percent of the money allocated to
18 municipalities shall be returned to the municipality of
19 origin of the sales tax revenue.
20 (b) Allocations to school districts.--Each school district
21 shall be allocated a portion of the total allocation to school
22 districts which is equal to the total allocation to school
23 districts multiplied by the ratio of average daily membership of
24 the school district divided by the sum of the average daily
25 membership of all school districts in the county. For the
26 purposes of this section, "average daily membership" shall mean
27 "average daily membership" as defined by the act of March 10,
28 1949 (P.L.30, No.14), known as the Public School Code of 1949.
29 (c) Qualifications.--Municipalities and school districts
30 qualified to receive disbursements under section 318(c) or (d)
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1 are municipalities and school districts located within the
2 county, which:
3 (1) adopt in a timely fashion, the ordinance or petition
4 required under section 319; and
5 (2) adopt the necessary ordinances or, in the case of
6 school districts, take the legally necessary action and
7 impose the taxes authorized under this act.
8 (d) Limited definition.--For the purpose of this section,
9 "weighted tax revenues" are total tax revenues from all sources
10 of a municipality divided by the ratio of its per capita market
11 value to the per capita market value of its county. The per
12 capita market value means the total market value of all real
13 property divided by population as determined by the most recent
14 decennial census. Calculations of weighted tax revenues shall be
15 made by the Department of Community and Economic Development or
16 any successor agency and certified to the State Treasurer based
17 upon information reported to the Department of Community and
18 Economic Development any successor agency, subject to review,
19 verification and approval by the Department of Community and
20 Economic Development or any successor agency.
21 SUBCHAPTER C
22 PERSONAL INCOME TAX
23 Section 321. Construction.
24 The tax imposed by the governing body of a county under this
25 subchapter shall be in addition to any tax imposed by the
26 Commonwealth under Article III of the Tax Reform Code. Except
27 for the differing provisions under sections 501, 502 and 503,
28 the provisions of Article III of the Tax Reform Code shall apply
29 to the tax.
30 Section 322. Personal income tax.
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1 In lieu of imposing the tax under section 312, each county
2 shall have the power and may levy, assess and collect a tax on
3 the personal income of resident taxpayers of the county up to a
4 maximum rate of 0.5%, in increments of 0.25%. Any county which
5 imposes a tax under this section may not impose any tax under
6 section 312.
7 Section 323. Collections.
8 A county may either collect the tax imposed under section 322
9 or may enter into an agreement with the department for
10 collection of the tax.
11 Section 324. Rules and regulations; collection costs.
12 (a) Regulations.--Rules and regulations shall be applicable
13 to the taxes imposed under section 322 in the same manner as is
14 provided for in Article III of the Tax Reform Code.
15 (b) Administrative costs.--The department, to cover its
16 costs of administration, shall be entitled to retain a sum equal
17 to 1% of the revenues collected under this subchapter for its
18 administrative costs. When the annual operating budget for the
19 department is submitted to the General Assembly, the department
20 shall also submit to the chairman and minority chairman of the
21 Appropriations Committee of the Senate and to the chairman and
22 minority chairman of the Appropriations Committee of the House
23 of Representatives the actual sums retained for costs of
24 collection in the preceding fiscal year, together with all
25 supporting details.
26 Section 325. Procedure and administration.
27 (a) Ordinance.--The governing body of the county, in order
28 to impose the tax authorized by section 322, shall adopt an
29 ordinance which shall refer to this subchapter. Prior to
30 adopting an ordinance imposing the tax authorized by section
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1 322, the respective governing body shall give public notice of
2 its intent to adopt the ordinance in the manner provided by
3 section 4 of the Local Tax Enabling Act and shall conduct at
4 least one public hearing regarding the proposed adoption of the
5 ordinance.
6 (b) Delivery.--A certified copy of the ordinance imposing
7 the tax shall be delivered to the department no later than 90
8 days prior to the effective date of the ordinance.
9 (c) Delivery of repeal ordinance.--A certified copy of a
10 repeal ordinance shall be delivered to the department at least
11 30 days prior to the effective date of the repeal.
12 Section 326. Local personal income tax funds.
13 There is hereby created for each county levying the tax under
14 section 322 the (proper name) Personal Income Tax Fund. The
15 State Treasurer shall be custodian of the funds which shall be
16 subject to the provisions of law applicable to funds listed in
17 section 302 of the act of April 9, 1929 (P.L.343, No.176), known
18 as The Fiscal Code. Taxes imposed under section 322 shall be
19 received by the department and paid to the State Treasurer and,
20 along with interest and penalties, less any collection costs
21 allowed under this subchapter and any refunds and credits paid,
22 shall be credited to the funds not less frequently than every
23 two weeks. During any period prior to the credit of moneys to
24 the funds, interest earned on moneys received by the department
25 and paid to the State Treasurer under this subchapter shall be
26 deposited into the funds. All moneys in the funds, including,
27 but not limited to, moneys credited to the funds under this
28 section, prior year encumbrances and the interest earned
29 thereon, shall not lapse or be transferred to any other fund,
30 but shall remain in the funds. Pending their disbursement,
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1 moneys received on behalf of or deposited into the funds shall
2 be invested or reinvested as are other moneys in the custody of
3 the State Treasurer in the manner provided by law. All earnings
4 received from the investment or reinvestment of the moneys shall
5 be credited to the respective funds.
6 Section 327. Disbursements.
7 On or before the April 10, July 10, October 10 and the next
8 succeeding January 10, the State Treasurer shall make the
9 disbursements to each county imposing the tax out of the moneys
10 which are, as of the last day of the previous month, contained
11 in the respective personal income tax funds. If disbursements
12 are not made on or before the dates listed in this section, a 5%
13 penalty shall be added thereto, plus a 1% late charge per month
14 delayed. This section shall only apply to a county which imposes
15 a tax under section 322.
16 SUBCHAPTER D
17 EARNED INCOME AND NET PROFITS TAX
18 Section 331. Earned income and net profits tax.
19 In lieu of imposing the tax under section 312, each county
20 shall have the power and may levy, assess and collect a tax on
21 the earned income and net profits of resident taxpayers of the
22 county up to a maximum rate of 0.5% in increments of 0.25% of
23 1%. Any county which imposes a tax under this paragraph may not
24 impose a tax under section 322.
25 Section 332. Collections.
26 Any county imposing a tax under section 331 shall designate
27 the tax officer who is appointed under section 10 of the Local
28 Tax Enabling Act, or otherwise by law, as the collector of the
29 earned income and net profits tax. In the performance of the tax
30 collection duties under this subchapter, the designated tax
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1 officer shall have all the same powers, rights, responsibilities
2 and duties for the collection of the taxes which may be imposed
3 under the Local Tax Enabling Act or as otherwise provided by
4 law.
5 Section 333. Rules and regulations.
6 Taxes imposed under section 331 will be subject to the rules
7 and regulations pursuant to section 13 of the Local Tax Enabling
8 Act.
9 Section 334. Procedure and administration.
10 The governing body of the county, in order to impose the tax
11 authorized by section 331, shall adopt an ordinance which shall
12 refer to this subchapter. Prior to adopting an ordinance
13 imposing the tax authorized by section 331, the governing body
14 shall give public notice of its intent to adopt the ordinance in
15 the manner provided by section 4 of the Local Tax Enabling Act,
16 and shall conduct at least one public hearing regarding the
17 proposed adoption of the ordinance.
18 CHAPTER 5
19 CREDITS, EXEMPTIONS AND DEFERRALS
20 Section 501. Credits.
21 The provisions of section 14 of the Local Tax Enabling Act
22 shall be used to determine any credits under the provisions of
23 this act for any tax imposed under section 322.
24 Section 502. Low-income tax provisions.
25 The provisions of section 304 of the Tax Reform Code shall be
26 applied by any county which levies a tax under section 322 to
27 any qualified individual.
28 Section 503. Regulations.
29 Each county may adopt regulations for the processing of
30 claims under sections 501 and 502.
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1 CHAPTER 7
2 DISPOSITION OF TAX REVENUES
3 Section 701. Sales tax revenues.
4 (a) Counties.--One hundred percent of any additional
5 revenues received by a county from the sales and use tax shall
6 be used to offset the revenues lost as a result of the
7 prohibition against imposition of the taxes enumerated in
8 section 301(b) and then to reduce the county real property tax
9 by means of a homestead exclusion.
10 (b) Municipalities and school districts.--
11 (1) One hundred percent of any additional revenues shall
12 be used to reduce the taxes listed in paragraph (2) and then
13 to reduce the real property tax by means of a homestead
14 exclusion.
15 (2) The taxes which shall be reduced under this
16 subsection are as follows:
17 (i) A tax based upon a flat rate or on a millage
18 rate on an assessed valuation of a particular trade,
19 occupation or profession, commonly known as an occupation
20 tax.
21 (ii) A tax at a set or flat rate upon persons
22 employed within the taxing district, commonly known as an
23 occupational privilege tax.
24 (iii) A per capita, poll, residence or similar head
25 tax.
26 Section 702. Personal income tax revenues.
27 One hundred percent of any additional revenues from the
28 personal income tax shall be used to offset the lost revenues
29 from the taxes prohibited under section 301(b) and then to
30 reduce the county real property tax by means of a homestead
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1 exclusion.
2 Section 703. Revenue limitation exceptions.
3 The limitations relating to the reduction or elimination of
4 taxes in sections 701 and 702 may be waived, but only to the
5 degree necessary, in the following cases:
6 (1) If an increase in local expenditures is necessary to
7 respond to or recover from an emergency or disaster declared
8 by the Governor.
9 (2) If the political subdivision is required to
10 implement a court decision.
11 (3) To pay interest and principal on any indebtedness
12 incurred under the provisions of 53 Pa.C.S. Pt. VII Subpt. B
13 (relating to indebtedness and borrowing).
14 (4) To pay increases in pension fund requirements which
15 are in excess of the annual average increase over the
16 immediately preceding five fiscal years.
17 (5) To respond to a county declared to be distressed
18 under the act of July 10, 1987 (P.L.246, No.47), known as the
19 Municipalities Financial Recovery Act.
20 (6) To increase revenues when actual revenues decline
21 from the immediately preceding year, but only to the extent
22 of the revenue decline.
23 (7) If the increase does not exceed the limitations on
24 millage rates for real property under the act of July 28,
25 1953 (P.L.723, No.230), known as the Second Class County
26 Code, or the act of August 9, 1955 (P.L.323, No.1307), known
27 as The County Code.
28 (8) To respond to a Federal or State statute, regulation
29 or order adding to or significantly altering responsibilities
30 and duties or requiring expenditure of funds to the extent
20010H0946B1065 - 26 -
1 not funded by the Federal or State Government. This provision
2 shall apply only to a Federal or State statute, regulation or
3 order taking effect after the effective date of this act.
4 (9) To increase revenue equal to the percentage increase
5 in the Statewide average weekly wage from the immediately
6 preceding year or 5%, whichever is less.
7 CHAPTER 9
8 REGISTER FOR CERTAIN TAXES
9 Section 901. Definitions.
10 The following words and phrases when used in this chapter
11 shall have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Department." The Department of Community and Economic
14 Development of the Commonwealth or any successor agency.
15 Section 902. Register for taxes under this act.
16 (a) General rule.--It shall be the duty of the department to
17 have available an official continuing register supplemented
18 annually of all sales and use, personal income and earned income
19 and net profits taxes levied under this act.
20 (b) Contents of register.--The register and its supplements
21 shall list:
22 (1) The counties levying a personal income tax, sales
23 and use tax or earned income and net profits tax.
24 (2) The rate of tax as stated in the ordinance levying
25 the tax.
26 (3) The rate on taxpayers.
27 (4) The name and address of the tax officer responsible
28 for administering the collection of the tax and from whom
29 information, forms for reporting and copies of rules and
30 regulations are available.
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1 Section 903. Information for register.
2 Information for the register shall be furnished by the chief
3 clerk or secretary of each county to the department in such
4 manner and on such forms as the department may prescribe. The
5 information must be received by the department by certified mail
6 no later than May 31 of each year to show new tax enactments,
7 repeals and changes. Failure to comply with this date for filing
8 may result in the omission of the tax levy from the register for
9 that year. Failure of the department to receive information of
10 taxes continued without change may be construed by the
11 department to mean that the information contained in the
12 previous register remains in force.
13 Section 904. Availability and effective period of register.
14 The department shall have the register, with such annual
15 supplements as may be required by new tax enactments, repeals or
16 changes, available upon request no later than July 1 of each
17 year. The effective period for each register shall be from July
18 1 of the year in which it is issued to June 30 of the following
19 year.
20 Section 905. Effect of nonfiling.
21 Employers shall not be required by any ordinance to withhold
22 from the compensation of their employees any personal income tax
23 imposed under the provisions of this act which is not listed in
24 the register or to make reports of compensation in connection
25 with taxes not so listed. If the register is not available by
26 July 1, the register of the previous year shall continue
27 temporarily in effect for an additional period of not more than
28 one year.
29 Section 906. Effect of chapter on liability of taxpayer.
30 The provisions of this chapter shall not affect the liability
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1 of any taxpayer for taxes lawfully imposed under this act.
2 CHAPTER 13
3 MISCELLANEOUS PROVISIONS
4 Section 1301. Effective date.
5 This act shall take effect January 1, 2002.
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