PRIOR PRINTER'S NOS. 143, 708, 784, PRINTER'S NO. 1989
809, 1048, 1401, 1413, 1422, 1803, 1822
No. 157 Session of 2005
INTRODUCED BY BROWNE, VANCE, GORDNER, THOMPSON, PILEGGI, EARLL,
COSTA, KASUNIC, ORIE, LOGAN, ROBBINS, WONDERLING, BOSCOLA,
M. WHITE, WAUGH, WENGER, FUMO, PIPPY AND D. WHITE,
FEBRUARY 2, 2005
SENATE AMENDMENTS TO HOUSE AMENDMENTS, JULY 1, 2006
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 delegation of taxing powers and
23 restrictions thereon.; providing for local services taxes; <--
24 repealing provisions relating to emergency and municipal
25 services taxes and to continuation of occupational privilege
26 taxes; further providing for collection of and restricted use
27 of certain taxes; and making editorial changes.
28 The General Assembly of the Commonwealth of Pennsylvania
29 hereby enacts as follows:
1 Section 1. Section 2 of the act of December 31, 1965 <--
2 (P.L.1257, No.511), known as The Local Tax Enabling Act, amended
3 December 1, 2004 (P.L.1729, No.222), is amended to read:
4 Section 2. Delegation of Taxing Powers and Restrictions
5 Thereon.--The duly constituted authorities of the following
6 political subdivisions, cities of the second class, cities of
7 the second class A, cities of the third class, boroughs, towns,
8 townships of the first class, townships of the second class,
9 school districts of the second class, school districts of the
10 third class, and school districts of the fourth class, in all
11 cases including independent school districts, may, in their
12 discretion, by ordinance or resolution, for general revenue
13 purposes, levy, assess and collect or provide for the levying,
14 assessment and collection of such taxes as they shall determine
15 on persons, transactions, occupations, privileges, subjects and
16 personal property within the limits of such political
17 subdivisions, and upon the transfer of real property, or of any
18 interest in real property, situate within the political
19 subdivision levying and assessing the tax, regardless of where
20 the instruments making the transfers are made, executed or
21 delivered or where the actual settlements on such transfer take
22 place. The taxing authority may provide that the transferee
23 shall remain liable for any unpaid realty transfer taxes imposed
24 by virtue of this act. Each local taxing authority may, by
25 ordinance or resolution, exempt any person whose total income
26 from all sources is less than twelve thousand dollars ($12,000)
27 per annum from the per capita or similar head tax, occupation
28 tax [and emergency and municipal services tax], or earned income
29 tax, or any portion thereof, and may adopt regulations for the
30 processing of claims for exemptions. Such local authorities
20050S0157B1989 - 2 -
1 shall not have authority by virtue of this act:
2 (1) To levy, assess and collect or provide for the levying,
3 assessment and collection of any tax on the transfer of real
4 property when the transfer is by will or mortgage or the
5 intestate laws of this Commonwealth or on a transfer by the
6 owner of previously occupied residential premises to a builder
7 of new residential premises when such previously occupied
8 residential premises is taken in trade by such builder as part
9 of the consideration from the purchaser of a new previously
10 unoccupied single family residential premises or on a transfer
11 between corporations operating housing projects pursuant to the
12 housing and redevelopment assistance law and the shareholders
13 thereof, or on a transfer between nonprofit industrial
14 development agencies and industrial corporations purchasing from
15 them, or on transfer to or from nonprofit industrial development
16 agencies, or on a transfer between husband and wife, or on a
17 transfer between persons who were previously husband and wife
18 but who have since been divorced; provided such transfer is made
19 within three months of the date of the granting of the final
20 decree in divorce, or the decree of equitable distribution of
21 marital property, whichever is later, and the property or
22 interest therein, subject to such transfer, was acquired by the
23 husband and wife, or husband or wife, prior to the granting of
24 the final decree in divorce, or on a transfer between parent and
25 child or the spouse of such a child, or between parent and
26 trustee for the benefit of a child or the spouse of such child,
27 or on a transfer between a grandparent and grandchild or the
28 spouse of such grandchild, or on a transfer between brother and
29 sister or brother and brother or sister and sister or the spouse
30 of such brother or sister, or on a transfer to a conservancy
20050S0157B1989 - 3 -
1 which possesses a tax-exempt status pursuant to section
2 501(c)(3) of the Internal Revenue Code, and which has as its
3 primary purpose the preservation of land for historic,
4 recreational, scenic, agricultural or open space opportunities,
5 by and between a principal and straw party for the purpose of
6 placing a mortgage or ground rent upon the premises, or on a
7 correctional deed without consideration, or on a transfer to the
8 United States, the Commonwealth of Pennsylvania, or to any of
9 their instrumentalities, agencies or political subdivisions, by
10 gift, dedication or deed in lieu of condemnation, or deed of
11 confirmation in connection with condemnation proceedings, or
12 reconveyance by the condemning body of the property condemned to
13 the owner of record at the time of condemnation which
14 reconveyance may include property line adjustments provided said
15 reconveyance is made within one year from the date of
16 condemnation, leases, or on a conveyance to a trustee under a
17 recorded trust agreement for the express purpose of holding
18 title in trust as security for a debt contracted at the time of
19 the conveyance under which the trustee is not the lender and
20 requiring the trustee to make reconveyance to the grantor-
21 borrower upon the repayment of the debt, or a transfer within a
22 family from a sole proprietor family member to a family farm
23 corporation, or in any sheriff sale instituted by a mortgagee in
24 which the purchaser of said sheriff sale is the mortgagee who
25 instituted said sale, or on a privilege, transaction, subject,
26 occupation or personal property which is now or does hereafter
27 become subject to a State tax or license fee;
28 (2) To levy, assess or collect a tax on the gross receipts
29 from utility service of any person or company whose rates and
30 services are fixed and regulated by the Pennsylvania Public
20050S0157B1989 - 4 -
1 Utility Commission or on any public utility services rendered by
2 any such person or company or on any privilege or transaction
3 involving the rendering of any such public utility service;
4 (3) Except on sales of admission to places of amusement or
5 on sales or other transfers of title or possession of property,
6 to levy, assess or collect a tax on the privilege of employing
7 such tangible property as is now or does hereafter become
8 subject to a State tax; and for the purposes of this clause,
9 real property rented for camping purposes shall not be
10 considered a place of amusement.
11 (4) To levy, assess and collect a tax on goods and articles
12 manufactured in such political subdivision or on the by-products
13 of manufacture, or on minerals, timber, natural resources and
14 farm products produced in such political subdivision or on the
15 preparation or processing thereof for use or market, or on any
16 privilege, act or transaction related to the business of
17 manufacturing, the production, preparation or processing of
18 minerals, timber and natural resources, or farm products, by
19 manufacturers, by producers and by farmers with respect to the
20 goods, articles and products of their own manufacture,
21 production or growth, or on any privilege, act or transaction
22 relating to the business of processing by-products of
23 manufacture, or on the transportation, loading, unloading or
24 dumping or storage of such goods, articles, products or by-
25 products; except that local authorities may levy, assess and
26 collect [an emergency and municipal] a local services tax and
27 taxes on the occupation, per capita and earned income or net
28 profits of natural persons engaged in the above activities
29 whether doing business as individual proprietorship or as
30 members of partnerships or other associations;
20050S0157B1989 - 5 -
1 (5) To levy, assess or collect a tax on salaries, wages,
2 commissions, compensation and earned income of nonresidents of
3 the political subdivisions: Provided, That this limitation (5)
4 shall apply only to school districts of the second, third and
5 fourth classes;
6 (6) To levy, assess or collect a tax on personal property
7 subject to taxation by counties or on personal property owned by
8 persons, associations and corporations specifically exempted by
9 law from taxation under the county personal property tax law:
10 Provided, That this limitation (6) shall not apply to cities of
11 the second class;
12 (7) To levy, assess or collect a tax on membership in or
13 membership dues, fees or assessment of charitable, religious,
14 beneficial or nonprofit organizations including but not limited
15 to sportsmens, recreational, golf and tennis clubs, girl and boy
16 scout troops and councils;
17 (8) To levy, assess or collect any tax on a mobilehome or
18 house trailer subject to a real property tax unless the same tax
19 is levied, assessed and collected on other real property in the
20 political subdivision.
21 (9) To levy, assess or collect any tax on individuals for
22 the privilege of engaging in an occupation [(emergency and
23 municipal services tax)] except that such a tax (a local
24 services tax) may be levied, assessed and collected only by the
25 political subdivision of the taxpayer's place of employment.
26 [Payment of any emergency and municipal services tax to any
27 political subdivision by any person pursuant to an ordinance or
28 resolution passed or adopted under the authority of this act
29 shall be no less than ten dollars ($10) nor more than fifty-two
30 dollars ($52) on each person for each calendar year.
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1 The situs of such tax shall be the place of employment, but,
2 in the event a person is engaged in more than one occupation, or
3 an occupation which requires his working in more than one
4 political subdivision during the calendar year, the priority of
5 claim to collect such emergency and municipal services tax shall
6 be in the following order: first, the political subdivision in
7 which a person maintains his principal office or is principally
8 employed; second, the political subdivision in which the person
9 resides and works, if such a tax is levied by that political
10 subdivision; third, the political subdivision in which a person
11 is employed and which imposes the tax nearest in miles to the
12 person's home. The place of employment shall be determined as of
13 the day the taxpayer first becomes subject to the tax during the
14 calendar year.
15 It is the intent of this provision that no person shall pay
16 more than fifty-two dollars ($52) in any calendar year as an
17 emergency and municipal services tax irrespective of the number
18 of political subdivisions within which such person may be
19 employed within any given calendar year.
20 In case of dispute, a tax receipt of the taxing authority for
21 that calendar year declaring that the taxpayer has made prior
22 payment which constitutes prima facie certification of payment
23 to all other political subdivisions.] The following apply:
24 (i) Except as provided in subclause (xi), for any payroll
25 period in a calendar year, a political subdivision levying a
26 local services tax pursuant to an ordinance or a resolution
27 under the authority of this act shall collect no more than the
28 pro rata share of the tax levied on a person for a calendar year
29 determined by dividing the tax levied on a person for the
30 calendar year by the number of payroll periods established by
20050S0157B1989 - 7 -
1 the employer for the calendar year. For purposes of determining
2 the pro rata share, employers shall round down the amount of the
3 tax collected each payroll period to the nearest one-hundredth
4 of a dollar. The local services tax shall be no more than fifty-
5 two dollars ($52) on each person for each calendar year,
6 irrespective of the number of political subdivisions within
7 which a person may be employed.
8 (ii) If a school district levied and collected an emergency
9 and municipal services tax on the effective date of this
10 subclause, the school district may continue to levy a local
11 services tax in the same amount the school district collected on
12 the effective date of this subclause, subject to the pro rata
13 limitation of subclause (i). However, if a municipality located
14 in whole or in part within the school district subsequently
15 levies a local services tax, the school district may only
16 collect five dollars ($5) on taxpayers employed within the
17 municipality each calendar year, subject to the limitations of
18 this clause. A school district that did not levy or collect an
19 emergency and municipal services tax on the effective date of
20 this subclause shall be prohibited from levying a local services
21 tax. If a school district and a municipality located in whole or
22 in part within the school district both levy a local services
23 tax, the school district's pro rata share of the aggregate local
24 services taxes levied on taxpayers employed within the
25 municipality shall be collected by the municipality or its tax
26 officer, and paid to the school district on a quarterly basis
27 within sixty days of receipt by the municipality or its tax
28 officer. If a municipality located in whole or in part within a
29 school district does not levy and collect a local services tax,
30 the school district may provide for collection of the local
20050S0157B1989 - 8 -
1 services tax as provided in section 10 of this act.
2 (iii) No taxpayer shall be subject to the payment of a local
3 services tax to more than one political subdivision except as
4 provided in subclause (ii) during each payroll period as
5 established by subclause (iv).
6 (iv) The situs of the tax shall be the place of employment
7 on the first day the taxpayer becomes subject to the tax during
8 each payroll period in a calendar year, but, in the event a
9 person is engaged in more than one occupation, that is,
10 concurrent employment, or an occupation which requires the
11 taxpayer working in more than one political subdivision during a
12 payroll period, the priority of claim to collect the local
13 services tax shall be in the following order: first, the
14 political subdivision in which a person maintains the person's
15 principal office or is principally employed; second, the
16 political subdivision in which the person resides and works, if
17 the tax is levied by that political subdivision; and third, the
18 political subdivision in which a person is employed and which
19 imposes the tax nearest in miles to the person's home.
20 (v) In the case of concurrent employment, an employer shall
21 refrain from withholding the local services tax if the employe
22 provides a recent pay statement from a principal employer that
23 includes the name of the employer, the length of the pay period
24 and the amount of the local services tax withheld, which is
25 accompanied by a statement from the employe that the pay
26 statement is from the employe's principal employer and the
27 employe will notify other employers of a change in principal
28 place of employment within two weeks of its occurrence. The
29 Department of Community and Economic Development shall develop a
30 uniform employe statement form.
20050S0157B1989 - 9 -
1 (vi) Political subdivisions shall adopt regulations for the
2 processing of refund claims for overpaid local services taxes
3 for any calendar year. The regulations shall be consistent with
4 53 Pa.C.S. §§ 8425 and 8426. The date of overpayment for a local
5 services tax shall be the date the tax was deducted and withheld
6 at source. Refunds made within seventy-five days of a refund
7 request or seventy-five days after the last day the employer is
8 required to remit the local services tax for the last quarter of
9 the calendar year under section 9 of this act, whichever is
10 later, shall not be subject to interest imposed under 53 Pa.C.S.
11 § 8426. Political subdivisions shall only provide refunds for
12 amounts overpaid in a calendar year that exceed one dollar ($1).
13 (vii) The Department of Community and Economic Development
14 may provide suggested forms and technical assistance to
15 facilitate the administration of a local services tax for
16 political subdivisions and reduce the burden of implementation,
17 accounting and compliance for employers and taxpayers.
18 (viii) Each political subdivision shall by ordinance or
19 resolution allow an exemption from the tax imposed under this
20 clause for any person whose total income from all sources is
21 less than twelve thousand dollars ($12,000) for the calendar
22 year in which the tax is levied and may adopt procedures for the
23 monitoring of exemptions consistent with subclause (ix).
24 (ix) A person seeking to claim an exemption from the tax
25 imposed under this clause shall annually file an exemption
26 certificate with the political subdivision levying the tax and
27 with the person's employer affirming that the person reasonably
28 expects to receive income from all sources of less than twelve
29 thousand dollars ($12,000) in the calendar year for which the
30 exemption certificate is filed. Upon receipt of the exemption
20050S0157B1989 - 10 -
1 certificate and until otherwise instructed by the political
2 subdivision levying the tax or except as required by subclause
3 (x), the employer shall not withhold the tax from the person
4 during the calendar year for which the exemption certificate
5 applies. Employers shall ensure that the exemption certificate
6 forms are readily available to employes at all times and shall
7 furnish each new employe with a form at the time of hiring. The
8 Department of Community and Economic Development shall develop
9 and make available to political subdivisions and employers
10 uniform exemption certificates required by this clause.
11 (x) With respect to a person who claimed an exemption for a
12 given calendar year from the tax levied by a political
13 subdivision under this clause, upon notification to an employer
14 by the person or by the political subdivision that the person
15 has received income equal to or in excess of twelve thousand
16 dollars ($12,000) in that calendar year or that the person is
17 otherwise ineligible for the tax exemption for that calendar
18 year, or upon an employer's payment to the person of income in
19 an amount equal to or in excess of twelve thousand dollars
20 ($12,000) in that calendar year, an employer shall withhold the
21 tax levied by a political subdivision under this clause from the
22 person pursuant to subclause (xi).
23 (xi) If a person who claimed an exemption for a given
24 calendar year from the tax levied by a political subdivision
25 under this clause becomes subject to the tax for the calendar
26 year pursuant to subclause (x), the employer shall withhold the
27 tax in the remainder of that calendar year. The amount of tax
28 withheld per payroll period for the remaining payroll periods in
29 that calendar year shall be the tax levied for the calendar year
30 divided by the number of payroll periods remaining in that
20050S0157B1989 - 11 -
1 calendar year. In the event the employment of a person subject
2 to withholding of the tax under this subclause is subsequently
3 severed in that calendar year, the person shall be liable for
4 any outstanding balance of tax due and the political subdivision
5 levying the tax may pursue collection under this act.
6 (xii) Except as provided in subclause (x), it is the intent
7 of this clause that employers shall not be responsible for
8 investigating exemption certificates, monitoring tax exemption
9 eligibility or exempting any employe from a tax imposed under
10 this clause.
11 (xiii) For purposes of this clause, "income" shall mean
12 "earned income" as defined in Division I of section 13.
13 (10) To levy, assess or collect a tax on admissions to
14 motion picture theatres: Provided, That this limitation (10)
15 shall not apply to cities of the second class.
16 (11) To levy, assess or collect a tax on the construction of
17 or improvement to residential dwellings or upon the application
18 for or issuance of permits for the construction of or
19 improvements to residential dwellings.
20 (12) To levy, assess and collect a mercantile or business
21 privilege tax on gross receipts or part thereof which are: (i)
22 discounts allowed to purchasers as cash discounts for prompt
23 payment of their bills; (ii) charges advanced by a seller for
24 freight, delivery or other transportation for the purchaser in
25 accordance with the terms of a contract of sale; (iii) received
26 upon the sale of an article of personal property which was
27 acquired by the seller as a trade-in to the extent that the
28 gross receipts in the sale of the article taken in trade does
29 not exceed the amount of trade-in allowance made in acquiring
30 such article; (iv) refunds, credits or allowances given to a
20050S0157B1989 - 12 -
1 purchaser on account of defects in goods sold or merchandise
2 returned; (v) Pennsylvania sales tax; (vi) based on the value of
3 exchanges or transfers between one seller and another seller who
4 transfers property with the understanding that property of an
5 identical description will be returned at a subsequent date;
6 however, when sellers engaged in similar lines of business
7 exchange property and one of them makes payment to the other in
8 addition to the property exchanged, the additional payment
9 received may be included in the gross receipts of the seller
10 receiving such additional cash payments; (vii) of sellers from
11 sales to other sellers in the same line where the seller
12 transfers the title or possession at the same price for which
13 the seller acquired the merchandise; or (viii) transfers between
14 one department, branch or division of a corporation or other
15 business entity of goods, wares and merchandise to another
16 department, branch or division of the same corporation or
17 business entity and which are recorded on the books to reflect
18 such interdepartmental transactions.
19 (13) To levy, assess or collect an amusement or admissions
20 tax on membership, membership dues, fees or assessments,
21 donations, contributions or monetary charges of any character
22 whatsoever paid by the general public, or a limited or selected
23 number thereof, for such persons to enter into any place,
24 indoors or outdoors, to engage in any activities, the
25 predominant purpose or nature of which is exercise, fitness,
26 health maintenance, improvement or rehabilitation, health or
27 nutrition education, or weight control.
28 (14) Except by cities of the second class, to levy, assess
29 or collect a tax on payroll amounts generated as a result of
30 business activity.
20050S0157B1989 - 13 -
1 (15) Except by cities of the second class in which a sports
2 stadium or arena that has received public funds in connection
3 with its construction or maintenance is located, to levy, assess
4 and collect a publicly funded facility usage fee upon those
5 nonresident individuals who use such facility to engage in an
6 athletic event or otherwise render a performance for which they
7 receive remuneration.
8 (16) To levy, assess or collect an amusement or admissions
9 tax on the charge imposed upon a patron for the sale of
10 admission to or for the privilege of admission to a bowling
11 alley or bowling lane to engage in one or more games of bowling.
12 Section 2. Section 7 of the act, amended August 11, 1967
13 (P.L.228, No.83) and October 9, 1967 (P.L.361, No.160), is
14 amended to read:
15 Section 7. Filing of Certified Copies of Ordinances and
16 Resolutions.--When an ordinance or a resolution is first passed
17 or adopted by a political subdivision imposing a tax or license
18 fee under the authority of this act, an exact printed or
19 typewritten copy thereof, certified to by the secretary of the
20 taxing body, shall be filed with the [Department of Community
21 Affairs] Department of Community and Economic Development within
22 fifteen days after the same becomes effective.
23 Any secretary or person acting as the clerk or secretary of
24 the taxing body of any political subdivision during the meeting
25 at which an ordinance or resolution imposing a tax or license
26 fee is passed or adopted as herein provided who shall fail to
27 file the certified copy or statement relative thereto with the
28 [Department of Community Affairs] Department of Community and
29 Economic Development as herein required, shall, upon summary
30 conviction thereof in the county in which the political
20050S0157B1989 - 14 -
1 subdivision is located, be sentenced to pay a fine of not less
2 than five dollars ($5) nor more than twenty-five dollars ($25),
3 and the costs of prosecution.
4 Section 3. Section 8 of the act, amended December 1, 2004
5 (P.L.1729, No.222), is amended to read:
6 Section 8. Limitations on Rates of Specific Taxes.--No taxes
7 levied under the provisions of this act shall be levied by any
8 political subdivision on the following subjects exceeding the
9 rates specified in this section:
10 (1) Per capita, poll or other similar head taxes, ten
11 dollars ($10).
12 (2) On each dollar of the whole volume of business
13 transacted by wholesale dealers in goods, wares and merchandise,
14 one mill, by retail dealers in goods, wares and merchandise and
15 by proprietors of restaurants or other places where food, drink
16 and refreshments are served, one and one-half mills; except in
17 cities of the second class, where rates shall not exceed one
18 mill on wholesale dealers and two mills on retail dealers and
19 proprietors. No such tax shall be levied on the dollar volume of
20 business transacted by wholesale and retail dealers derived from
21 the resale of goods, wares and merchandise, taken by any dealer
22 as a trade-in or as part payment for other goods, wares and
23 merchandise, except to the extent that the resale price exceeds
24 the trade-in allowance.
25 (3) On wages, salaries, commissions and other earned income
26 of individuals, one percent.
27 (4) On retail sales involving the transfer of title or
28 possession of tangible personal property, two percent.
29 (5) On the transfer of real property, one percent.
30 (6) On admissions to places of amusement, athletic events
20050S0157B1989 - 15 -
1 and the like, and on motion picture theatres in cities of the
2 second class, ten percent.
3 (7) Flat rate occupation taxes not using a millage or
4 percentage as a basis, ten dollars ($10).
5 (8) [Emergency and municipal] Local services taxes, fifty-
6 two dollars ($52).
7 (9) On admissions to ski facilities, ten percent. The tax
8 base upon which the tax shall be levied shall not exceed forty
9 percent of the cost of the lift ticket. The lift ticket shall
10 include all costs of admissions to the ski facility.
11 (10) On admissions to golf courses, ten percent. The tax
12 base upon which the tax shall be levied shall not exceed forty
13 percent of the greens fee. The greens fee shall include all
14 costs of admissions to the golf course.
15 (12) On payrolls, fifty-five hundredths percent.
16 Except as otherwise provided in this act, at any time two
17 political subdivisions shall impose any one of the above taxes
18 on the same person, subject, business, transaction or privilege,
19 located within both such political subdivisions, during the same
20 year or part of the same year, under the authority of this act
21 then the tax levied by a political subdivision under the
22 authority of this act shall, during the time such duplication of
23 the tax exists, except as hereinafter otherwise provided, be
24 one-half of the rate, as above limited, and such one-half rate
25 shall become effective by virtue of the requirements of this act
26 from the day such duplication becomes effective without any
27 action on the part of the political subdivision imposing the tax
28 under the authority of this act. When any one of the above taxes
29 has been levied under the provisions of this act by one
30 political subdivision and a subsequent levy is made either for
20050S0157B1989 - 16 -
1 the first time or is revived after a lapse of time by another
2 political subdivision on the same person, subject, business,
3 transaction or privilege at a rate that would make the combined
4 levies exceed the limit allowed by this subdivision, the tax of
5 the second political subdivision shall not become effective
6 until the end of the fiscal year for which the prior tax was
7 levied, unless:
8 (1) Notice indicating its intention to make such levy is
9 given to the first taxing body by the second taxing body as
10 follows: (i) when the notice is given to a school district it
11 shall be given at least forty-five days prior to the last day
12 fixed by law for the levy of its school taxes; (ii) when given
13 to any other political subdivision it shall be prior to the
14 first day of January immediately preceding, or if a last day for
15 the adoption of the budget is fixed by law, at least forty-five
16 days prior to such last day; or
17 (2) Unless the first taxing body shall indicate by
18 appropriate resolution its desire to waive notice requirements
19 in which case the levy of the second taxing body shall become
20 effective on such date as may be agreed upon by the two taxing
21 bodies.
22 It is the intent and purpose of this provision to limit rates
23 of taxes referred to in this section so that the entire burden
24 of one tax on a person, subject, business, transaction or
25 privilege shall not exceed the limitations prescribed in this
26 section: Provided, however, That any two political subdivisions
27 which impose any one of the above taxes, on the same person,
28 subject, business, transaction or privilege during the same year
29 or part of the same year may agree among themselves that,
30 instead of limiting their respective rates to one-half of the
20050S0157B1989 - 17 -
1 maximum rate herein provided, they will impose respectively
2 different rates, the total of which shall not exceed the maximum
3 rate as above permitted.
4 Notwithstanding the provisions of this section, any city of
5 the second class A may enact a tax upon wages, salaries,
6 commissions and other earned income of individuals resident
7 therein, not exceeding one percent, even though a school
8 district levies a similar tax on the same person provided that
9 the aggregate of both taxes does not exceed two percent. [In the
10 case of duplication of emergency and municipal services taxes by
11 both a school district, other than a school district of the
12 first class A, and another taxing body, the school district's
13 share of the tax shall not exceed the amount of a tax on the
14 privilege of engaging in an occupation collected by the school
15 district as of the effective date of this paragraph. In the case
16 where a school district did not levy a tax on the privilege of
17 engaging in an occupation on the effective date of this
18 paragraph, the school district may impose a future levy not to
19 exceed five dollars ($5). A school district of the first class A
20 shall not levy, assess or collect an emergency and municipal
21 services tax.]
22 Section 4. Section 9 of the act, amended December 12, 1968
23 (P.L.1203, No.377), is amended to read:
24 Section 9. Register for Earned Income and [Occupational
25 Privilege] Local Services Taxes.--It shall be the duty of the
26 [Department of Community Affairs] Department of Community and
27 Economic Development to have available an official continuing
28 register supplemented annually of all earned income and
29 [occupational privilege] local services taxes levied under
30 authority of this act. The register and its supplements,
20050S0157B1989 - 18 -
1 hereinafter referred to as the register, shall list such
2 jurisdictions levying earned income [and/or occupational
3 privilege] and local services taxes, the rate of the tax as
4 stated in the tax levying ordinance or resolution, and the
5 effective rate on resident and nonresident taxpayers, if
6 different from the stated rate because of a coterminous levy,
7 the name and address of the officer responsible for
8 administering the collection of the tax and from whom
9 information, forms for reporting and copies of rules and
10 regulations are available. With each jurisdiction listed, all
11 jurisdictions making coterminous levies shall also be noted and
12 their tax rates shown.
13 Information for the register shall be furnished by the
14 secretary of each taxing body to the [Department of Community
15 Affairs] Department of Community and Economic Development in
16 such manner and on such forms as the [Department of Community
17 Affairs] Department of Community and Economic Development may
18 prescribe. The information must be received by the [Department
19 of Community Affairs] Department of Community and Economic
20 Development by certified mail not later than May 31 of each year
21 to show new tax enactments, repeals and changes. Failure to
22 comply with this date for filing may result in the omission of
23 the levy from the register for that year. Failure of the
24 [Department of Community Affairs] Department of Community and
25 Economic Development to receive information of taxes continued
26 without change may be construed by the department to mean that
27 the information contained in the previous register remains in
28 force.
29 The [Department of Community Affairs] Department of Community
30 and Economic Development shall have the register with such
20050S0157B1989 - 19 -
1 annual supplements as may be required by new tax enactments,
2 repeals or changes available upon request not later than July 1
3 of each year. The effective period for each register shall be
4 from July 1 of the year in which it is issued to June 30 of the
5 following year.
6 Employers shall not be required by any local ordinance to
7 withhold from the wages, salaries, commissions or other
8 compensation of their employes any tax imposed under the
9 provisions of this act, which is not listed in the register, or
10 make reports of wages, salaries, commissions or other
11 compensation in connection with taxes not so listed: Provided,
12 That if the register is not available by July 1, the register of
13 the previous year shall continue temporarily in effect for an
14 additional period not to exceed one year. The provisions of this
15 section shall not affect the liability of any taxpayer for taxes
16 lawfully imposed under this act.
17 Ordinances or resolutions imposing earned income or
18 [occupational privilege] local services taxes under authority of
19 this act may contain provisions requiring employers doing
20 business within the jurisdiction of the political subdivision
21 imposing the tax to withhold the tax from the compensation of
22 those of their employes who are subject to the tax: Provided,
23 That no employer shall be held liable for failure to withhold
24 earned income taxes or for the payment of such withheld tax
25 money to a political subdivision other than the political
26 subdivision entitled to receive such money if such failure to
27 withhold or such incorrect transmittal of withheld taxes arises
28 from incorrect information as to the employe's place of
29 residence submitted by the employe: And provided further, That
30 [employers shall not be required by any local ordinance to
20050S0157B1989 - 20 -
1 withhold from compensation for any one of their employes for the
2 occupational privilege tax more than one time in any fiscal
3 period:] no employer shall be held liable for failure to
4 withhold the local services tax or for the payment of the
5 withheld tax money to a political subdivision if the failure to
6 withhold taxes arises from incorrect information submitted by
7 the employe as to the employe's place or places of employment,
8 the employe's principal office or where the employe is
9 principally employed: And provided further, That an employer
10 shall not be liable for payment of the local services tax in an
11 amount exceeding the amount withheld by the employer if the
12 employer complies with the provisions of section 2(9) of this
13 act and remits the amount so withheld in accordance with this
14 section: And provided further, That the Department of Community
15 and Economic Development may provide suggested forms and
16 technical assistance to facilitate the administration of the
17 local services tax for political subdivisions and reduce the
18 burden of implementation, accounting and compliance for
19 employers and taxpayers: And provided further, That the
20 [occupational privilege] local services tax shall be applicable
21 to employment in the period beginning January 1, of the current
22 year and ending December 31 of the current year, except that
23 taxes imposed for the first time shall become effective from
24 [the date] January 1 of the year specified in the ordinance or
25 resolution, and the tax shall continue in force on a calendar
26 year basis[.]: And provided further, That employers shall be
27 required to remit the local services taxes within thirty days
28 after the end of each quarter of a calendar year.
29 Section 5. Section 19 of the act, amended October 4, 1978
30 (P.L.930, No.177), is amended to read:
20050S0157B1989 - 21 -
1 Section 19. Collection of Delinquent Per Capita, Occupation,
2 Occupational Privilege, Emergency and Municipal Services, Local
3 Services and Earned Income Taxes from Employers, etc.--The tax
4 collector shall demand, receive and collect from all
5 corporations, political subdivisions, associations, companies,
6 firms or individuals, employing persons owing delinquent per
7 capita, or occupation, occupational privilege, emergency and
8 municipal services, local services and earned income taxes, or
9 whose spouse owes delinquent per capita, occupation,
10 occupational privilege, emergency and municipal services, local
11 services and earned income taxes, or having in possession unpaid
12 commissions or earnings belonging to any person or persons owing
13 delinquent per capita, occupation, occupational privilege,
14 emergency and municipal services, local services and earned
15 income taxes, or whose spouse owes delinquent per capita,
16 occupation, occupational privilege, emergency and municipal
17 services, local services and earned income taxes, upon the
18 presentation of a written notice and demand certifying that the
19 information contained therein is true and correct and containing
20 the name of the taxable or the spouse thereof and the amount of
21 tax due. Upon the presentation of such written notice and
22 demand, it shall be the duty of any such corporation, political
23 subdivision, association, company, firm or individual to deduct
24 from the wages, commissions or earnings of such individual
25 employes, then owing or that shall within sixty days thereafter
26 become due, or from any unpaid commissions or earnings of any
27 such taxable in its or his possession, or that shall within
28 sixty days thereafter come into its or his possession, a sum
29 sufficient to pay the respective amount of the delinquent per
30 capita, occupation, occupational privilege, emergency and
20050S0157B1989 - 22 -
1 municipal services, local services and earned income taxes and
2 costs, shown upon the written notice or demand, and to pay the
3 same to the tax collector of the taxing district in which such
4 delinquent tax was levied within sixty days after such notice
5 shall have been given. No more than ten percent of the wages,
6 commissions or earnings of the delinquent taxpayer or spouse
7 thereof may be deducted at any one time for delinquent per
8 capita, occupation, occupational privilege, emergency and
9 municipal services, local services and earned income taxes and
10 costs. Such corporation, political subdivision, association,
11 firm or individual shall be entitled to deduct from the moneys
12 collected from each employe the costs incurred from the extra
13 bookkeeping necessary to record such transactions, not exceeding
14 two percent of the amount of money so collected and paid over to
15 the tax collector. Upon the failure of any such corporation,
16 political subdivision, association, company, firm or individual
17 to deduct the amount of such taxes or to pay the same over to
18 the tax collector, less the cost of bookkeeping involved in such
19 transaction, as herein provided, within the time hereby
20 required, such corporation, political subdivision, association,
21 company, firm or individual shall forfeit and pay the amount of
22 such tax for each such taxable whose taxes are not withheld and
23 paid over, or that are withheld and not paid over together with
24 a penalty of ten percent added thereto, to be recovered by an
25 action of assumpsit in a suit to be instituted by the tax
26 collector, or by the proper authorities of the taxing district,
27 as debts of like amount are now by law recoverable, except that
28 such person shall not have the benefit of any stay of execution
29 or exemption law. The tax collector shall not proceed against a
30 spouse or his employer until he has pursued collection remedies
20050S0157B1989 - 23 -
1 against the delinquent taxpayer and his employer under this
2 section.
3 Section 6. Section 20 of the act is amended to read:
4 Section 20. Collection of Delinquent Per Capita, Occupation,
5 Occupational Privilege, Emergency and Municipal Services, Local
6 Services and Earned Income Taxes from the Commonwealth.--Upon
7 presentation of a written notice and demand under oath or
8 affirmation, to the State Treasurer or any other fiscal officer
9 of the State, or its boards, authorities, agencies or
10 commissions, it shall be the duty of the treasurer or officer to
11 deduct from the wages then owing, or that shall within sixty
12 days thereafter become due to any employe, a sum sufficient to
13 pay the respective amount of the delinquent per capita,
14 occupation, occupational privilege, emergency and municipal
15 services, local services and earned income taxes and costs shown
16 on the written notice. The same shall be paid to the tax
17 collector of the taxing district in which said delinquent tax
18 was levied within sixty days after such notice shall have been
19 given.
20 Section 7. Section 22.1 of the act, added November 30, 2004
21 (P.L.1520, No.192), is amended to read:
22 Section 22.1. Costs of Collection of Delinquent Per Capita,
23 Occupation, Occupational Privilege, Emergency and Municipal
24 Services, Local Services and Earned Income Taxes.--(a) A person,
25 public employe or private agency designated by a governing body
26 of a political subdivision to collect and administer a per
27 capita, occupation, occupational privilege, emergency and
28 municipal services, local services or earned income tax may
29 impose and collect the reasonable costs incurred to provide
30 notices of delinquency or to implement similar procedures
20050S0157B1989 - 24 -
1 utilized to collect delinquent taxes from a taxpayer as approved
2 by the governing body of the political subdivision. Reasonable
3 costs collected may be retained by the person, public employe or
4 private agency designated to collect the tax as agreed to by the
5 governing body of the political subdivision. An itemized
6 accounting of all costs collected shall be remitted to the
7 political subdivision on an annual basis.
8 (b) Costs related to the collection of unpaid per capita,
9 occupation [or], occupational privilege, emergency and municipal
10 services or local services taxes may only be assessed, levied
11 and collected for five years from the last day of the calendar
12 year in which the tax was due.
13 (c) A delinquent taxpayer may not bring an action for
14 reimbursement, refund or elimination of reasonable costs of
15 collection assessed or imposed prior to the effective date of
16 this section. Additional costs may not be assessed on delinquent
17 taxes collected prior to the effective date of this section.
18 Section 8. Sections 22.4 and 22.5 of the act, added December
19 1, 2004 (P.L.1729, No.222), are amended to read:
20 [Section 22.4. Emergency and Municipal Services Taxes.--Any
21 reference in any act or law to an occupational privilege tax
22 shall mean the emergency and municipal services taxes as
23 provided for in this act.
24 Section 22.5. Restricted Use.--(a) Any municipality
25 deriving funds from the emergency and municipal services tax may
26 only use the funds for:
27 (1) police, fire and/or emergency services;
28 (2) road construction and/or maintenance; or
29 (3) reduction of property taxes.
30 (b) For the purpose of the emergency and municipal services
20050S0157B1989 - 25 -
1 tax, the term municipality does not include a school district.]
2 Section 9. The act is amended by adding a section to read:
3 Section 22.6. Restricted Use.--(a) Any municipality
4 deriving funds from the local services tax shall use no less
5 than twenty-five percent of the funds for police, fire and
6 emergency services.
7 (b) For the purpose of the local services tax, the term
8 "municipality" does not include a school district.
9 Section 10. Any ordinance or resolution providing for the
10 levying, assessment or collection of a tax on individuals for
11 the privilege of engaging in an occupation which has been
12 enacted by a political subdivision prior to December 1, 2004,
13 shall continue in full force and effect, without reenactment, as
14 if such tax had been levied, assessed or collected as a local
15 services tax under section 2(9) of the act. All references in
16 any ordinance or resolution to a tax on the privilege of
17 engaging in an occupation shall be deemed to be a reference to a
18 local services tax for the purposes of the act.
19 Section 11. All emergency and municipal services taxes
20 levied for the calendar year beginning on January 1, 2006, shall
21 remain in effect for the calendar year beginning on January 1,
22 2006, and ending December 31, 2006, and are not otherwise
23 altered.
24 Section 12. The amendment or addition of the following
25 provisions shall apply to taxes levied for calendar year 2007
26 and each year thereafter:
27 (1) The amendment of section 2 of the act.
28 (2) The amendment of section 8 of the act.
29 (3) The amendment of section 9 of the act, except for
30 any editorial amendment changing the reference from the
20050S0157B1989 - 26 -
1 Department of Community Affairs to the Department of
2 Community and Economic Development.
3 (4) The amendment of section 19 of the act.
4 (5) The amendment of section 20 of the act.
5 (6) The amendment of section 22.1 of the act.
6 (7) The amendment of section 22.4 of the act.
7 (8) The amendment of section 22.5 of the act.
8 (9) The addition of section 22.6 of the act.
9 Section 13. Repeals are as follows:
10 (1) The General Assembly declares that the repeal under
11 paragraph (2) is necessary to effectuate the amendment of
12 section 2(9) of the act.
13 (2) Section 6 of the act of December 1, 2004 (P.L.1729,
14 No.222), entitled "An act amending the act of December 31,
15 1965 (P.L.1257, No.511), entitled 'An act empowering cities
16 of the second class, cities of the second class A, cities of
17 the third class, boroughs, towns, townships of the first
18 class, townships of the second class, school districts of the
19 second class, school districts of the third class and school
20 districts of the fourth class including independent school
21 districts, to levy, assess, collect or to provide for the
22 levying, assessment and collection of certain taxes subject
23 to maximum limitations for general revenue purposes;
24 authorizing the establishment of bureaus and the appointment
25 and compensation of officers, agencies and employes to assess
26 and collect such taxes; providing for joint collection of
27 certain taxes, prescribing certain definitions and other
28 provisions for taxes levied and assessed upon earned income,
29 providing for annual audits and for collection of delinquent
30 taxes, and permitting and requiring penalties to be imposed
20050S0157B1989 - 27 -
1 and enforced, including penalties for disclosure of
2 confidential information, providing an appeal from the
3 ordinance or resolution levying such taxes to the court of
4 quarter sessions and to the Supreme Court and Superior
5 Court,' further providing for delegation of taxing powers and
6 restrictions thereon; providing for nonresident sports
7 facility usage fee, for parking tax rates and for payroll
8 taxes; further providing for limitations on rates of specific
9 taxes and for the appointment of a single collector of taxes;
10 further providing for the applicability of petitions under
11 the act of July 10, 1987 (P.L.246, No.47), known as the
12 Municipalities Financial Recovery Act; and making a repeal,"
13 is repealed.
14 Section 14. This act shall take effect immediately.
15 SECTION 1. SECTION 2(3) OF THE ACT OF DECEMBER 31, 1965 <--
16 (P.L.1257, NO.511), KNOWN AS THE LOCAL TAX ENABLING ACT, AMENDED
17 DECEMBER 1, 2004 (P.L.1729, NO.222), IS AMENDED TO READ:
18 SECTION 2. DELEGATION OF TAXING POWERS AND RESTRICTIONS
19 THEREON.--THE DULY CONSTITUTED AUTHORITIES OF THE FOLLOWING
20 POLITICAL SUBDIVISIONS, CITIES OF THE SECOND CLASS, CITIES OF
21 THE SECOND CLASS A, CITIES OF THE THIRD CLASS, BOROUGHS, TOWNS,
22 TOWNSHIPS OF THE FIRST CLASS, TOWNSHIPS OF THE SECOND CLASS,
23 SCHOOL DISTRICTS OF THE SECOND CLASS, SCHOOL DISTRICTS OF THE
24 THIRD CLASS, AND SCHOOL DISTRICTS OF THE FOURTH CLASS, IN ALL
25 CASES INCLUDING INDEPENDENT SCHOOL DISTRICTS, MAY, IN THEIR
26 DISCRETION, BY ORDINANCE OR RESOLUTION, FOR GENERAL REVENUE
27 PURPOSES, LEVY, ASSESS AND COLLECT OR PROVIDE FOR THE LEVYING,
28 ASSESSMENT AND COLLECTION OF SUCH TAXES AS THEY SHALL DETERMINE
29 ON PERSONS, TRANSACTIONS, OCCUPATIONS, PRIVILEGES, SUBJECTS AND
30 PERSONAL PROPERTY WITHIN THE LIMITS OF SUCH POLITICAL
20050S0157B1989 - 28 -
1 SUBDIVISIONS, AND UPON THE TRANSFER OF REAL PROPERTY, OR OF ANY
2 INTEREST IN REAL PROPERTY, SITUATE WITHIN THE POLITICAL
3 SUBDIVISION LEVYING AND ASSESSING THE TAX, REGARDLESS OF WHERE
4 THE INSTRUMENTS MAKING THE TRANSFERS ARE MADE, EXECUTED OR
5 DELIVERED OR WHERE THE ACTUAL SETTLEMENTS ON SUCH TRANSFER TAKE
6 PLACE. THE TAXING AUTHORITY MAY PROVIDE THAT THE TRANSFEREE
7 SHALL REMAIN LIABLE FOR ANY UNPAID REALTY TRANSFER TAXES IMPOSED
8 BY VIRTUE OF THIS ACT. EACH LOCAL TAXING AUTHORITY MAY, BY
9 ORDINANCE OR RESOLUTION, EXEMPT ANY PERSON WHOSE TOTAL INCOME
10 FROM ALL SOURCES IS LESS THAN TWELVE THOUSAND DOLLARS ($12,000)
11 PER ANNUM FROM THE PER CAPITA OR SIMILAR HEAD TAX, OCCUPATION
12 TAX AND EMERGENCY AND MUNICIPAL SERVICES TAX, OR EARNED INCOME
13 TAX, OR ANY PORTION THEREOF, AND MAY ADOPT REGULATIONS FOR THE
14 PROCESSING OF CLAIMS FOR EXEMPTIONS. SUCH LOCAL AUTHORITIES
15 SHALL NOT HAVE AUTHORITY BY VIRTUE OF THIS ACT:
16 * * *
17 (3) EXCEPT ON SALES OF ADMISSION TO PLACES OF AMUSEMENT,
18 OTHER THAN ON SALES OF ADMISSION TO PROFESSIONAL SPORTING EVENTS
19 A CITY OF THE THIRD CLASS WITH A POPULATION OF NOT LESS THAN ONE
20 HUNDRED FIVE THOUSAND AND NOT MORE THAN ONE HUNDRED FIVE
21 THOUSAND FIVE HUNDRED BASED ON THE 2000 FEDERAL DECENNIAL
22 CENSUS, OR ON SALES OR OTHER TRANSFERS OF TITLE OR POSSESSION OF
23 PROPERTY, TO LEVY, ASSESS OR COLLECT A TAX ON THE PRIVILEGE OF
24 EMPLOYING SUCH TANGIBLE PROPERTY AS IS NOW OR DOES HEREAFTER
25 BECOME SUBJECT TO A STATE TAX; AND FOR THE PURPOSES OF THIS
26 CLAUSE, REAL PROPERTY RENTED FOR CAMPING PURPOSES SHALL NOT BE
27 CONSIDERED A PLACE OF AMUSEMENT.
28 * * *
29 SECTION 2. THIS ACT SHALL TAKE EFFECT IMMEDIATELY.
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