PRINTER'S NO. 4113
No. 2907 Session of 1990
INTRODUCED BY VROON, CLYMER, TIGUE, PITTS, BELFANTI, GEIST,
E. Z. TAYLOR AND PETRONE, SEPTEMBER 26, 1990
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, SEPTEMBER 26, 1990
AN ACT
1 Amending the act of December 31, 1965 (P.L.1257, No.511),
2 entitled "An act empowering cities of the second class,
3 cities of the second class A, cities of the third class,
4 boroughs, towns, townships of the first class, townships of
5 the second class, school districts of the second class,
6 school districts of the third class and school districts of
7 the fourth class including independent school districts, to
8 levy, assess, collect or to provide for the levying,
9 assessment and collection of certain taxes subject to maximum
10 limitations for general revenue purposes; authorizing the
11 establishment of bureaus and the appointment and compensation
12 of officers, agencies and employes to assess and collect such
13 taxes; providing for joint collection of certain taxes,
14 prescribing certain definitions and other provisions for
15 taxes levied and assessed upon earned income, providing for
16 annual audits and for collection of delinquent taxes, and
17 permitting and requiring penalties to be imposed and
18 enforced, including penalties for disclosure of confidential
19 information, providing an appeal from the ordinance or
20 resolution levying such taxes to the court of quarter
21 sessions and to the Supreme Court and Superior Court,"
22 further providing for a municipal services tax.
23 The General Assembly of the Commonwealth of Pennsylvania
24 hereby enacts as follows:
25 Section 1. The introductory paragraph and clause (9) of
26 section 2 of the act of December 31, 1965 (P.L.1257, No.511),
27 known as The Local Tax Enabling Act, amended October 11, 1984
28 (P.L.885, No.172), are amended to read:
1 Section 2. Delegation of Taxing Powers and Restrictions
2 Thereon.--The duly constituted authorities of the following
3 political subdivisions, cities of the second class, cities of
4 the second class A, cities of the third class, boroughs, towns,
5 townships of the first class, townships of the second class,
6 school districts of the second class, school districts of the
7 third class, and school districts of the fourth class, in all
8 cases including independent school districts, may, in their
9 discretion, by ordinance or resolution, for general revenue
10 purposes, levy, assess and collect or provide for the levying,
11 assessment and collection of such taxes as they shall determine
12 on persons, transactions, occupations, privileges, subjects and
13 personal property within the limits of such political
14 subdivisions, and upon the transfer of real property, or of any
15 interest in real property, situate within the political
16 subdivision levying and assessing the tax, regardless of where
17 the instruments making the transfers are made, executed or
18 delivered or where the actual settlements on such transfer take
19 place. The taxing authority may provide that the transferee
20 shall remain liable for any unpaid realty transfer taxes imposed
21 by virtue of this act. Each local taxing authority may, by
22 ordinance or resolution, exempt any person whose total income
23 from all sources is less than five thousand dollars ($5,000) per
24 annum from the per capita or similar head tax, occupation tax
25 and [occupational privilege] municipal services tax, or earned
26 income tax, or any portion thereof, and may adopt regulations
27 for the processing of claims for exemptions. Such local
28 authorities shall not have authority by virtue of this act:
29 * * *
30 (9) To levy, assess or collect any tax on individuals for
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1 [the privilege of engaging in an occupation (occupational
2 privilege tax)] providing municipal services except that such a
3 tax may be levied, assessed and collected only by the political
4 subdivision of the taxpayer's place of employment.
5 Payment of any [occupational privilege] municipal services
6 tax to any political subdivision by any person pursuant to an
7 ordinance or resolution passed or adopted under the authority of
8 this act shall be limited to [ten dollars (10)] twenty-five
9 dollars ($25) on each person for each calendar year.
10 The situs of such tax shall be the place of employment, but,
11 in the event a person is engaged in more than one occupation, or
12 an occupation which requires his working in more than one
13 political subdivision during the calendar year, the priority of
14 claim to collect such [occupational privilege] municipal
15 services tax shall be in the following order: first, the
16 political subdivision in which a person maintains his principal
17 office or is principally employed; second, the political
18 subdivision in which the person resides and works, if such a tax
19 is levied by that political subdivision; third, the political
20 subdivision in which a person is employed and which imposes the
21 tax nearest in miles to the person's home. The place of
22 employment shall be determined as of the day the taxpayer first
23 becomes subject to the tax during the calendar year.
24 It is the intent of this provision that no person shall pay
25 more than [ten dollars ($10)] twenty-five dollars ($25) in any
26 calendar year as [an occupational privilege] a municipal
27 services tax irrespective of the number of political
28 subdivisions within which such person may be employed within any
29 given calendar year.
30 In case of dispute, a tax receipt of the taxing authority for
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1 that calendar year declaring that the taxpayer has made prior
2 payment which constitutes prima facie certification of payment
3 to all other political subdivisions.
4 * * *
5 Section 2. Section 8 of the act, amended or added October
6 11, 1984 (P.L.885, No.172) and July 9, 1987 (P.L.203, No.30), is
7 amended to read:
8 Section 8. Limitations on Rates of Specific Taxes.--No taxes
9 levied under the provisions of this act shall be levied by any
10 political subdivision on the following subjects exceeding the
11 rates specified in this section:
12 (1) Per capita, poll or other similar head taxes, ten
13 dollars ($10).
14 (2) On each dollar of the whole volume of business
15 transacted by wholesale dealers in goods, wares and merchandise,
16 one mill, by retail dealers in goods, wares and merchandise and
17 by proprietors of restaurants or other places where food, drink
18 and refreshments are served, one and one-half mills; except in
19 cities of the second class, where rates shall not exceed one
20 mill on wholesale dealers and two mills on retail dealers and
21 proprietors. No such tax shall be levied on the dollar volume of
22 business transacted by wholesale and retail dealers derived from
23 the resale of goods, wares and merchandise, taken by any dealer
24 as a trade-in or as part payment for other goods, wares and
25 merchandise, except to the extent that the resale price exceeds
26 the trade-in allowance.
27 (3) On wages, salaries, commissions and other earned income
28 of individuals, one percent.
29 (4) On retail sales involving the transfer of title or
30 possession of tangible personal property, two percent.
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1 (5) On the transfer of real property, one percent.
2 (6) On admissions to places of amusement, athletic events
3 and the like, and on motion picture theatres in cities of the
4 second class, ten percent.
5 [(7) Flat rate occupation taxes not using a millage or
6 percentage as a basis, ten dollars ($10).]
7 (8) [Occupational privilege taxes, ten dollars ($10)]
8 Municipal services taxes, twenty-five dollars ($25).
9 (9) On admissions to ski facilities, ten percent. The tax
10 base upon which the tax shall be levied shall not exceed forty
11 percent of the cost of the lift ticket. The lift ticket shall
12 include all costs of admissions to the ski facility.
13 (10) On admissions to golf courses, ten percent. The tax
14 base upon which the tax shall be levied shall not exceed forty
15 percent of the greens fee. The greens fee shall include all
16 costs of admissions to the golf course.
17 (11) On admissions to bowling alleys or bowling lanes, ten
18 percent. The tax base upon which the tax shall be levied shall
19 not exceed forty percent of the charge imposed upon a patron for
20 the sale of admission to or the privilege of admission to a
21 bowling alley or bowling lane to engage in one or more games of
22 bowling.
23 Except as otherwise provided in this act, at any time two
24 political subdivisions shall impose any one of the above taxes
25 on the same person, subject, business, transaction or privilege,
26 located within both such political subdivisions, during the same
27 year or part of the same year, under the authority of this act
28 then the tax levied by a political subdivision under the
29 authority of this act shall, during the time such duplication of
30 the tax exists, except as hereinafter otherwise provided, be
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1 one-half of the rate, as above limited, and such one-half rate
2 shall become effective by virtue of the requirements of this act
3 from the day such duplication becomes effective without any
4 action on the part of the political subdivision imposing the tax
5 under the authority of this act. When any one of the above taxes
6 has been levied under the provisions of this act by one
7 political subdivision and a subsequent levy is made either for
8 the first time or is revived after a lapse of time by another
9 political subdivision on the same person, subject, business,
10 transaction or privilege at a rate that would make the combined
11 levies exceed the limit allowed by this subdivision, the tax of
12 the second political subdivision shall not become effective
13 until the end of the fiscal year for which the prior tax was
14 levied, unless:
15 (1) Notice indicating its intention to make such levy is
16 given to the first taxing body by the second taxing body as
17 follows: (i) when the notice is given to a school district it
18 shall be given at least forty-five days prior to the last day
19 fixed by law for the levy of its school taxes; (ii) when given
20 to any other political subdivision it shall be prior to the
21 first day of January immediately preceding, or if a last day for
22 the adoption of the budget is fixed by law, at least forty-five
23 days prior to such last day; or
24 (2) Unless the first taxing body shall indicate by
25 appropriate resolution its desire to waive notice requirements
26 in which case the levy of the second taxing body shall become
27 effective on such date as may be agreed upon by the two taxing
28 bodies.
29 It is the intent and purpose of this provision to limit rates
30 of taxes referred to in this section so that the entire burden
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1 of one tax on a person, subject, business, transaction or
2 privilege shall not exceed the limitations prescribed in this
3 section: Provided, however, That any two political subdivisions
4 which impose any one of the above taxes, on the same person,
5 subject, business, transaction or privilege during the same year
6 or part of the same year may agree among themselves that,
7 instead of limiting their respective rates to one-half of the
8 maximum rate herein provided, they will impose respectively
9 different rates, the total of which shall not exceed the maximum
10 rate as above permitted.
11 Notwithstanding the provisions of this section, any city of
12 the second class A may enact a tax upon wages, salaries,
13 commissions and other earned income of individuals resident
14 therein, not exceeding one percent, even though a school
15 district levies a similar tax on the same person provided that
16 the aggregate of both taxes does not exceed two percent.
17 Section 3. Section 9 of the act, amended December 12, 1968
18 (P.L.1203, No.377), is amended to read:
19 Section 9. Register for Earned Income and [Occupational
20 Privilege] Municipal Services Taxes.--It shall be the duty of
21 the Department of Community Affairs to have available an
22 official continuing register supplemented annually of all earned
23 income and [occupational privilege] municipal services taxes
24 levied under authority of this act. The register and its
25 supplements, hereinafter referred to as the register, shall list
26 such jurisdictions levying earned income and/or [occupational
27 privilege] municipal services taxes, the rate of the tax as
28 stated in the tax levying ordinance or resolution, and the
29 effective rate on resident and nonresident taxpayers, if
30 different from the stated rate because of a coterminous levy,
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1 the name and address of the officer responsible for
2 administering the collection of the tax and from whom
3 information, forms for reporting and copies of rules and
4 regulations are available. With each jurisdiction listed, all
5 jurisdictions making coterminous levies shall also be noted and
6 their tax rates shown.
7 Information for the register shall be furnished by the
8 secretary of each taxing body to the Department of Community
9 Affairs in such manner and on such forms as the Department of
10 Community Affairs may prescribe. The information must be
11 received by the Department of Community Affairs by certified
12 mail not later than May 31 of each year to show new tax
13 enactments, repeals and changes. Failure to comply with this
14 date for filing may result in the omission of the levy from the
15 register for that year. Failure of the Department of Community
16 Affairs to receive information of taxes continued without change
17 may be construed by the department to mean that the information
18 contained in the previous register remains in force.
19 The Department of Community Affairs shall have the register
20 with such annual supplements as may be required by new tax
21 enactments, repeals or changes available upon request not later
22 than July 1 of each year. The effective period for each register
23 shall be from July 1 of the year in which it is issued to June
24 30 of the following year.
25 Employers shall not be required by any local ordinance to
26 withhold from the wages, salaries, commissions or other
27 compensation of their employes any tax imposed under the
28 provisions of this act, which is not listed in the register, or
29 make reports of wages, salaries, commissions or other
30 compensation in connection with taxes not so listed: Provided,
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1 That if the register is not available by July 1, the register of
2 the previous year shall continue temporarily in effect for an
3 additional period not to exceed one year. The provisions of this
4 section shall not affect the liability of any taxpayer for taxes
5 lawfully imposed under this act.
6 Ordinances or resolutions imposing earned income or
7 [occupational privilege] municipal services taxes under
8 authority of this act may contain provisions requiring employers
9 doing business within the jurisdiction of the political
10 subdivision imposing the tax to withhold the tax from the
11 compensation of those of their employes who are subject to the
12 tax: Provided, That no employer shall be held liable for failure
13 to withhold earned income taxes or for the payment of such
14 withheld tax money to a political subdivision other than the
15 political subdivision entitled to receive such money if such
16 failure to withhold or such incorrect transmittal of withheld
17 taxes arises from incorrect information as to the employe's
18 place of residence submitted by the employe: And provided
19 further, That employers shall not be required by any local
20 ordinance to withhold from compensation for any one of their
21 employes for the [occupational privilege] municipal services tax
22 more than one time in any fiscal period: And provided further,
23 That the [occupational privilege] municipal services tax shall
24 be applicable to employment in the period beginning January 1,
25 of the current year and ending December 31 of the current year,
26 except that taxes imposed for the first time shall become
27 effective from the date specified in the ordinance or
28 resolution, and the tax shall continue in force on a calendar
29 year basis.
30 Section 4. Section 19 of the act, amended October 4, 1978
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1 (P.L.930, No.177), is amended to read:
2 Section 19. Collection of Delinquent Per Capita, Occupation,
3 [Occupational Privilege] Municipal Services and Earned Income
4 Taxes from Employers, etc.--The tax collector shall demand,
5 receive and collect from all corporations, political
6 subdivisions, associations, companies, firms or individuals,
7 employing persons owing delinquent per capita, or occupation,
8 [occupational privilege] municipal services and earned income
9 taxes, or whose spouse owes delinquent per capita, occupation,
10 [occupational privilege] municipal services and earned income
11 taxes, or having in possession unpaid commissions or earnings
12 belonging to any person or persons owing delinquent per capita,
13 occupation, [occupational privilege] municipal services and
14 earned income taxes, or whose spouse owes delinquent per capita,
15 occupation, [occupational privilege] municipal services and
16 earned income taxes, upon the presentation of a written notice
17 and demand certifying that the information contained therein is
18 true and correct and containing the name of the taxable or the
19 spouse thereof and the amount of tax due. Upon the presentation
20 of such written notice and demand, it shall be the duty of any
21 such corporation, political subdivision, association, company,
22 firm or individual to deduct from the wages, commissions or
23 earnings of such individual employes, then owing or that shall
24 within sixty days thereafter become due, or from any unpaid
25 commissions or earnings of any such taxable in its or his
26 possession, or that shall within sixty days thereafter come into
27 its or his possession, a sum sufficient to pay the respective
28 amount of the delinquent per capita, occupation, [occupational
29 privilege] municipal services and earned income taxes and costs,
30 shown upon the written notice or demand, and to pay the same to
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1 the tax collector of the taxing district in which such
2 delinquent tax was levied within sixty days after such notice
3 shall have been given. No more than ten percent of the wages,
4 commissions or earnings of the delinquent taxpayer or spouse
5 thereof may be deducted at any one time for delinquent per
6 capita, occupation, [occupational privilege] municipal services
7 and earned income taxes and costs. Such corporation, political
8 subdivision, association, firm or individual shall be entitled
9 to deduct from the moneys collected from each employe the costs
10 incurred from the extra bookkeeping necessary to record such
11 transactions, not exceeding two percent of the amount of money
12 so collected and paid over to the tax collector. Upon the
13 failure of any such corporation, political subdivision,
14 association, company, firm or individual to deduct the amount of
15 such taxes or to pay the same over to the tax collector, less
16 the cost of bookkeeping involved in such transaction, as herein
17 provided, within the time hereby required, such corporation,
18 political subdivision, association, company, firm or individual
19 shall forfeit and pay the amount of such tax for each such
20 taxable whose taxes are not withheld and paid over, or that are
21 withheld and not paid over together with a penalty of ten
22 percent added thereto, to be recovered by an action of assumpsit
23 in a suit to be instituted by the tax collector, or by the
24 proper authorities of the taxing district, as debts of like
25 amount are now by law recoverable, except that such person shall
26 not have the benefit of any stay of execution or exemption law.
27 The tax collector shall not proceed against a spouse or his
28 employer until he has pursued collection remedies against the
29 delinquent taxpayer and his employer under this section.
30 Section 5. This act shall take effect in 60 days.
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