PRIOR PRINTER'S NOS. 143, 708, 784, PRINTER'S NO. 2206
809, 1048, 1401, 1413, 1422, 1803, 1822, 1989
No. 157 Session of 2005
Report of the Committee of Conference
To the Members of the Senate and House of Representatives:
We, the undersigned, Committee of Conference on the part of
the Senate and House of Representatives for the purpose of
considering Senate Bill No. 157, entitled:
"An act amending the act of December 31, 1965 (P.L.1257,
No.511), entitled 'An act empowering cities of the second class,
cities of the second class A, * * *; providing an appeal from
the ordinance or resolution levying such taxes to the court of
quarter sessions and to the Supreme Court and Superior Court,'
further providing for delegation of taxing powers and
restrictions thereon,"; providing for local services taxes;
repealing provisions relating to emergency and municipal
services taxes and to continuation of occupational privilege
taxes; further providing for collection of and restricted use of
certain taxes; and making editorial changes."
respectfully submit the following bill as our report:
GIBSON E. ARMSTRONG
DAVID J. BRIGHTBILL
JAY COSTA
(Committee on the part of the Senate.)
DENNIS E. LEH
ROBERT W. GODSHALL
MICHAEL R. VEON
(Committee on the part of the House of Representatives.)
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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 providing for local services taxes; repealing provisions
23 relating to emergency and municipal services taxes and to
24 continuation of occupational privilege taxes; and making
25 editorial changes.
26 The General Assembly of the Commonwealth of Pennsylvania
27 hereby enacts as follows:
28 Section 1. Section 2 of the act of December 31, 1965
29 (P.L.1257, No.511), known as The Local Tax Enabling Act, amended
30 December 1, 2004 (P.L.1729, No.222), is amended to read:
31 Section 2. Delegation of Taxing Powers and Restrictions
32 Thereon.--The duly constituted authorities of the following
33 political subdivisions, cities of the second class, cities of
34 the second class A, cities of the third class, boroughs, towns,
35 townships of the first class, townships of the second class,
36 school districts of the second class, school districts of the
37 third class, and school districts of the fourth class, in all
38 cases including independent school districts, may, in their
39 discretion, by ordinance or resolution, for general revenue
40 purposes, levy, assess and collect or provide for the levying,
41 assessment and collection of such taxes as they shall determine
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1 on persons, transactions, occupations, privileges, subjects and
2 personal property within the limits of such political
3 subdivisions, and upon the transfer of real property, or of any
4 interest in real property, situate within the political
5 subdivision levying and assessing the tax, regardless of where
6 the instruments making the transfers are made, executed or
7 delivered or where the actual settlements on such transfer take
8 place. The taxing authority may provide that the transferee
9 shall remain liable for any unpaid realty transfer taxes imposed
10 by virtue of this act. Each local taxing authority may, by
11 ordinance or resolution, exempt any person whose total income
12 from all sources is less than twelve thousand dollars ($12,000)
13 per annum from the per capita or similar head tax, occupation
14 tax [and emergency and municipal services tax,] or earned income
15 tax, or any portion thereof, and may adopt regulations for the
16 processing of claims for exemptions. Each political subdivision
17 levying the local services tax at a rate exceeding ten dollars
18 ($10) shall, and each political subdivision levying the local
19 services tax at a rate of ten dollars ($10) or less may, by
20 ordinance or resolution, exempt any person from the local
21 services tax whose total income from all sources is less than
22 twelve thousand dollars ($12,000) for the calendar year in which
23 the local services tax is levied. Each political subdivision
24 providing for exemption shall adopt regulations for the
25 processing of refund claims for the local services tax paid by
26 any person who is eligible for the exemption. The regulations
27 shall be consistent with 53 Pa.C.S. §§ 8425 (relating to refunds
28 of overpayments) and 8426 (relating to interest on overpayment).
29 Refunds made within seventy-five days of a refund request or
30 seventy-five days after the last day the employer is required to
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1 remit the local services tax for the last quarter of the
2 calendar year under section 9 of this act, whichever is later,
3 shall not be subject to interest imposed under 53 Pa.C.S. §
4 8426. It is the intent of this section that a political
5 subdivision or its tax officer determine eligibility for the
6 exemption and provide refunds to exempt persons from the local
7 services tax and that employers shall not be responsible for
8 processing an exemption or exempting any employe from the local
9 services tax. For purposes of exemption from the local services
10 tax, "income from all sources" shall be limited to "earned
11 income" and "net profits" as defined in Division I of section
12 13. The Department of Community and Economic Development shall
13 develop uniform forms to be used by political subdivisions to
14 facilitate the refund of the local services tax to any person
15 eligible for the exemption. Such local authorities shall not
16 have authority by virtue of this act:
17 (1) To levy, assess and collect or provide for the levying,
18 assessment and collection of any tax on the transfer of real
19 property when the transfer is by will or mortgage or the
20 intestate laws of this Commonwealth or on a transfer by the
21 owner of previously occupied residential premises to a builder
22 of new residential premises when such previously occupied
23 residential premises is taken in trade by such builder as part
24 of the consideration from the purchaser of a new previously
25 unoccupied single family residential premises or on a transfer
26 between corporations operating housing projects pursuant to the
27 housing and redevelopment assistance law and the shareholders
28 thereof, or on a transfer between nonprofit industrial
29 development agencies and industrial corporations purchasing from
30 them, or on transfer to or from nonprofit industrial development
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1 agencies, or on a transfer between husband and wife, or on a
2 transfer between persons who were previously husband and wife
3 but who have since been divorced; provided such transfer is made
4 within three months of the date of the granting of the final
5 decree in divorce, or the decree of equitable distribution of
6 marital property, whichever is later, and the property or
7 interest therein, subject to such transfer, was acquired by the
8 husband and wife, or husband or wife, prior to the granting of
9 the final decree in divorce, or on a transfer between parent and
10 child or the spouse of such a child, or between parent and
11 trustee for the benefit of a child or the spouse of such child,
12 or on a transfer between a grandparent and grandchild or the
13 spouse of such grandchild, or on a transfer between brother and
14 sister or brother and brother or sister and sister or the spouse
15 of such brother or sister, or on a transfer to a conservancy
16 which possesses a tax-exempt status pursuant to section
17 501(c)(3) of the Internal Revenue Code, and which has as its
18 primary purpose the preservation of land for historic,
19 recreational, scenic, agricultural or open space opportunities,
20 by and between a principal and straw party for the purpose of
21 placing a mortgage or ground rent upon the premises, or on a
22 correctional deed without consideration, or on a transfer to the
23 United States, the Commonwealth of Pennsylvania, or to any of
24 their instrumentalities, agencies or political subdivisions, by
25 gift, dedication or deed in lieu of condemnation, or deed of
26 confirmation in connection with condemnation proceedings, or
27 reconveyance by the condemning body of the property condemned to
28 the owner of record at the time of condemnation which
29 reconveyance may include property line adjustments provided said
30 reconveyance is made within one year from the date of
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1 condemnation, leases, or on a conveyance to a trustee under a
2 recorded trust agreement for the express purpose of holding
3 title in trust as security for a debt contracted at the time of
4 the conveyance under which the trustee is not the lender and
5 requiring the trustee to make reconveyance to the grantor-
6 borrower upon the repayment of the debt, or a transfer within a
7 family from a sole proprietor family member to a family farm
8 corporation, or in any sheriff sale instituted by a mortgagee in
9 which the purchaser of said sheriff sale is the mortgagee who
10 instituted said sale, or on a privilege, transaction, subject,
11 occupation or personal property which is now or does hereafter
12 become subject to a State tax or license fee;
13 (2) To levy, assess or collect a tax on the gross receipts
14 from utility service of any person or company whose rates and
15 services are fixed and regulated by the Pennsylvania Public
16 Utility Commission or on any public utility services rendered by
17 any such person or company or on any privilege or transaction
18 involving the rendering of any such public utility service;
19 (3) Except on sales of admission to places of amusement or
20 on sales or other transfers of title or possession of property,
21 to levy, assess or collect a tax on the privilege of employing
22 such tangible property as is now or does hereafter become
23 subject to a State tax; and for the purposes of this clause,
24 real property rented for camping purposes shall not be
25 considered a place of amusement.
26 (4) To levy, assess and collect a tax on goods and articles
27 manufactured in such political subdivision or on the by-products
28 of manufacture, or on minerals, timber, natural resources and
29 farm products produced in such political subdivision or on the
30 preparation or processing thereof for use or market, or on any
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1 privilege, act or transaction related to the business of
2 manufacturing, the production, preparation or processing of
3 minerals, timber and natural resources, or farm products, by
4 manufacturers, by producers and by farmers with respect to the
5 goods, articles and products of their own manufacture,
6 production or growth, or on any privilege, act or transaction
7 relating to the business of processing by-products of
8 manufacture, or on the transportation, loading, unloading or
9 dumping or storage of such goods, articles, products or by-
10 products; except that local authorities may levy, assess and
11 collect [an emergency and municipal] a local services tax and
12 taxes on the occupation, per capita and earned income or net
13 profits of natural persons engaged in the above activities
14 whether doing business as individual proprietorship or as
15 members of partnerships or other associations;
16 (5) To levy, assess or collect a tax on salaries, wages,
17 commissions, compensation and earned income of nonresidents of
18 the political subdivisions: Provided, That this limitation (5)
19 shall apply only to school districts of the second, third and
20 fourth classes;
21 (6) To levy, assess or collect a tax on personal property
22 subject to taxation by counties or on personal property owned by
23 persons, associations and corporations specifically exempted by
24 law from taxation under the county personal property tax law:
25 Provided, That this limitation (6) shall not apply to cities of
26 the second class;
27 (7) To levy, assess or collect a tax on membership in or
28 membership dues, fees or assessment of charitable, religious,
29 beneficial or nonprofit organizations including but not limited
30 to sportsmens, recreational, golf and tennis clubs, girl and boy
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1 scout troops and councils;
2 (8) To levy, assess or collect any tax on a mobilehome or
3 house trailer subject to a real property tax unless the same tax
4 is levied, assessed and collected on other real property in the
5 political subdivision.
6 (9) To levy, assess or collect any tax on individuals for
7 the privilege of engaging in an occupation [(emergency and
8 municipal services tax)] except that such a tax, to be known as
9 the local services tax, may be levied, assessed and collected
10 only by the political subdivision of the taxpayer's place of
11 employment.
12 [Payment of any emergency and municipal services tax to any
13 political subdivision by any person pursuant to an ordinance or
14 resolution passed or adopted under the authority of this act
15 shall be no less than ten dollars ($10) nor more than fifty-two
16 dollars ($52) on each person for each calendar year.
17 The situs of such tax shall be the place of employment, but,
18 in the event a person is engaged in more than one occupation, or
19 an occupation which requires his working in more than one
20 political subdivision during the calendar year, the priority of
21 claim to collect such emergency and municipal services tax shall
22 be in the following order: first, the political subdivision in
23 which a person maintains his principal office or is principally
24 employed; second, the political subdivision in which the person
25 resides and works, if such a tax is levied by that political
26 subdivision; third, the political subdivision in which a person
27 is employed and which imposes the tax nearest in miles to the
28 person's home. The place of employment shall be determined as of
29 the day the taxpayer first becomes subject to the tax during the
30 calendar year.
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1 It is the intent of this provision that no person shall pay
2 more than fifty-two dollars ($52) in any calendar year as an
3 emergency and municipal services tax irrespective of the number
4 of political subdivisions within which such person may be
5 employed within any given calendar year.
6 In case of dispute, a tax receipt of the taxing authority for
7 that calendar year declaring that the taxpayer has made prior
8 payment which constitutes prima facie certification of payment
9 to all other political subdivisions.] The following apply:
10 (i) If a local services tax is levied at a combined rate
11 exceeding ten dollars ($10) in a calendar year, a person subject
12 to the local services tax shall be assessed a pro rata share of
13 the tax for each payroll period in which the person is engaging
14 in an occupation. The pro rata share of the tax assessed on the
15 person for a payroll period shall be determined by dividing the
16 combined rate of the local services tax levied for the calendar
17 year by the number of payroll periods established by the
18 employer for the calendar year. For purposes of determining the
19 pro rata share, an employer shall round down the amount of the
20 tax collected each payroll period to the nearest one-hundredth
21 of a dollar. Collection of the local services tax levied under
22 this subclause shall be made on a payroll period basis for each
23 payroll period in which the person is engaging in an occupation,
24 except as provided in subclause (v).
25 (ii) If a school district levied an emergency and municipal
26 services tax on the effective date of this subclause, the school
27 district may continue to levy the local services tax in the same
28 amount the school district collected on the effective date of
29 this subclause. However, if a municipality located in whole or
30 in part within the school district subsequently levies the local
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1 services tax, the school district may only collect five dollars
2 ($5) on persons employed within the municipality each calendar
3 year. A school district that did not levy an emergency and
4 municipal services tax on the effective date of this subclause
5 shall be prohibited from levying the local services tax. If a
6 school district and a municipality located in whole or in part
7 within the school district both levy a local services tax at a
8 combined rate exceeding ten dollars ($10), the school district's
9 pro rata share of the aggregate local services taxes levied on
10 persons employed within the municipality shall be collected by
11 the municipality or its tax officer based on payroll periods as
12 provided under subclause (i) and shall be paid to the school
13 district on a quarterly basis within sixty days of receipt by
14 the municipality or its tax officer.
15 (iii) Except as provided in subclause (ii), no person shall
16 be subject to the payment of the local services tax by more than
17 one political subdivision during each payroll period as
18 established by subclause (iv).
19 (iv) With respect to a person subject to the local services
20 tax at a combined rate exceeding ten dollars ($10), the situs of
21 the tax shall be the place of employment on the first day the
22 person becomes subject to the tax during each payroll period.
23 With respect to a person subject to the local services tax at a
24 combined rate of not more than ten dollars ($10), the situs of
25 the tax shall be the place of employment determined as of the
26 day the person first becomes subject to the tax during the
27 calendar year. In the event a person is engaged in more than one
28 occupation, that is, concurrent employment, or an occupation
29 which requires the person working in more than one political
30 subdivision during a payroll period, the priority of claim to
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1 collect the local services tax shall be in the following order:
2 first, the political subdivision in which a person maintains the
3 person's principal office or is principally employed; second,
4 the political subdivision in which the person resides and works,
5 if the tax is levied by that political subdivision; and third,
6 the political subdivision in which a person is employed and
7 which imposes the tax nearest in miles to the person's home.
8 (v) In the case of concurrent employment, an employer shall
9 refrain from withholding the local services tax, if the employe
10 provides a recent pay statement from a principal employer that
11 includes the name of the employer, the length of the payroll
12 period and the amount of the local services tax withheld and a
13 statement from the employe that the pay statement is from the
14 employe's principal employer and the employe will notify other
15 employers of a change in principal place of employment within
16 two weeks of its occurrence. The Department of Community and
17 Economic Development shall develop a uniform employe statement
18 form.
19 (vi) The local services tax shall be no more than fifty-two
20 dollars ($52) on each person for each calendar year,
21 irrespective of the number of political subdivisions within
22 which a person may be employed.
23 (vii) Political subdivisions shall adopt regulations for the
24 processing of refund claims for overpaid local services taxes
25 for any calendar year. The regulations shall be consistent with
26 53 Pa.C.S. §§ 8425 and 8426. Refunds made within seventy-five
27 days of a refund request or seventy-five days after the last day
28 the employer is required to remit the local services tax for the
29 last quarter of the calendar year under section 9 of this act,
30 whichever is later, shall not be subject to interest imposed
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1 under 53 Pa.C.S. § 8426. Political subdivisions shall only
2 provide refunds for amounts overpaid in a calendar year that
3 exceed one dollar ($1).
4 (viii) The Department of Community and Economic Development
5 may provide suggested forms and technical assistance to
6 facilitate the administration of the local services tax for
7 political subdivisions and reduce the burden of implementation,
8 accounting and compliance for employers and taxpayers.
9 (ix) For purposes of this clause, "combined rate" shall mean
10 the aggregate annual rate of the local services tax levied by a
11 school district and a municipality located in whole or in part
12 within the school district.
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
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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.
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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
20050S0157B2206 - 15 -
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
20050S0157B2206 - 16 -
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
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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
20050S0157B2206 - 18 -
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,
20050S0157B2206 - 19 -
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
20050S0157B2206 - 20 -
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
20050S0157B2206 - 21 -
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 [occupational privilege]
15 local services tax shall be applicable to employment in the
16 period beginning January 1, of the current year and ending
17 December 31 of the current year, except that taxes imposed for
18 the first time shall become effective from [the date] January 1
19 of the year specified in the ordinance or resolution, and the
20 tax shall continue in force on a calendar year basis[.]: And
21 provided further, That employers shall be required to remit the
22 local services taxes within thirty days after the end of each
23 quarter of a calendar year.
24 Section 5. Section 19 of the act, amended October 4, 1978
25 (P.L.930, No.177), is amended to read:
26 Section 19. Collection of Delinquent Per Capita, Occupation,
27 Occupational Privilege, Emergency and Municipal Services, Local
28 Services and Earned Income Taxes from Employers, etc.--The tax
29 collector shall demand, receive and collect from all
30 corporations, political subdivisions, associations, companies,
20050S0157B2206 - 22 -
1 firms or individuals, employing persons owing delinquent per
2 capita, or occupation, occupational privilege, emergency and
3 municipal services, local services and earned income taxes, or
4 whose spouse owes delinquent per capita, occupation,
5 occupational privilege, emergency and municipal services, local
6 services and earned income taxes, or having in possession unpaid
7 commissions or earnings belonging to any person or persons owing
8 delinquent per capita, occupation, occupational privilege,
9 emergency and municipal services, local services and earned
10 income taxes, or whose spouse owes delinquent per capita,
11 occupation, occupational privilege, emergency and municipal
12 services, local services and earned income taxes, upon the
13 presentation of a written notice and demand certifying that the
14 information contained therein is true and correct and containing
15 the name of the taxable or the spouse thereof and the amount of
16 tax due. Upon the presentation of such written notice and
17 demand, it shall be the duty of any such corporation, political
18 subdivision, association, company, firm or individual to deduct
19 from the wages, commissions or earnings of such individual
20 employes, then owing or that shall within sixty days thereafter
21 become due, or from any unpaid commissions or earnings of any
22 such taxable in its or his possession, or that shall within
23 sixty days thereafter come into its or his possession, a sum
24 sufficient to pay the respective amount of the delinquent per
25 capita, occupation, occupational privilege, emergency and
26 municipal services, local services and earned income taxes and
27 costs, shown upon the written notice or demand, and to pay the
28 same to the tax collector of the taxing district in which such
29 delinquent tax was levied within sixty days after such notice
30 shall have been given. No more than ten percent of the wages,
20050S0157B2206 - 23 -
1 commissions or earnings of the delinquent taxpayer or spouse
2 thereof may be deducted at any one time for delinquent per
3 capita, occupation, occupational privilege, emergency and
4 municipal services, local services and earned income taxes and
5 costs. Such corporation, political subdivision, association,
6 firm or individual shall be entitled to deduct from the moneys
7 collected from each employe the costs incurred from the extra
8 bookkeeping necessary to record such transactions, not exceeding
9 two percent of the amount of money so collected and paid over to
10 the tax collector. Upon the failure of any such corporation,
11 political subdivision, association, company, firm or individual
12 to deduct the amount of such taxes or to pay the same over to
13 the tax collector, less the cost of bookkeeping involved in such
14 transaction, as herein provided, within the time hereby
15 required, such corporation, political subdivision, association,
16 company, firm or individual shall forfeit and pay the amount of
17 such tax for each such taxable whose taxes are not withheld and
18 paid over, or that are withheld and not paid over together with
19 a penalty of ten percent added thereto, to be recovered by an
20 action of assumpsit in a suit to be instituted by the tax
21 collector, or by the proper authorities of the taxing district,
22 as debts of like amount are now by law recoverable, except that
23 such person shall not have the benefit of any stay of execution
24 or exemption law. The tax collector shall not proceed against a
25 spouse or his employer until he has pursued collection remedies
26 against the delinquent taxpayer and his employer under this
27 section.
28 Section 6. Section 20 of the act is amended to read:
29 Section 20. Collection of Delinquent Per Capita, Occupation,
30 Occupational Privilege, Emergency and Municipal Services, Local
20050S0157B2206 - 24 -
1 Services and Earned Income Taxes from the Commonwealth.--Upon
2 presentation of a written notice and demand under oath or
3 affirmation, to the State Treasurer or any other fiscal officer
4 of the State, or its boards, authorities, agencies or
5 commissions, it shall be the duty of the treasurer or officer to
6 deduct from the wages then owing, or that shall within sixty
7 days thereafter become due to any employe, a sum sufficient to
8 pay the respective amount of the delinquent per capita,
9 occupation, occupational privilege, emergency and municipal
10 services, local services and earned income taxes and costs shown
11 on the written notice. The same shall be paid to the tax
12 collector of the taxing district in which said delinquent tax
13 was levied within sixty days after such notice shall have been
14 given.
15 Section 7. Section 22.1 of the act, added November 30, 2004
16 (P.L.1520, No.192), is amended to read:
17 Section 22.1. Costs of Collection of Delinquent Per Capita,
18 Occupation, Occupational Privilege, Emergency and Municipal
19 Services, Local Services and Earned Income Taxes.--(a) A person,
20 public employe or private agency designated by a governing body
21 of a political subdivision to collect and administer a per
22 capita, occupation, occupational privilege, emergency and
23 municipal services, local services or earned income tax may
24 impose and collect the reasonable costs incurred to provide
25 notices of delinquency or to implement similar procedures
26 utilized to collect delinquent taxes from a taxpayer as approved
27 by the governing body of the political subdivision. Reasonable
28 costs collected may be retained by the person, public employe or
29 private agency designated to collect the tax as agreed to by the
30 governing body of the political subdivision. An itemized
20050S0157B2206 - 25 -
1 accounting of all costs collected shall be remitted to the
2 political subdivision on an annual basis.
3 (b) Costs related to the collection of unpaid per capita,
4 occupation [or], occupational privilege, emergency and municipal
5 services or local services taxes may only be assessed, levied
6 and collected for five years from the last day of the calendar
7 year in which the tax was due.
8 (c) A delinquent taxpayer may not bring an action for
9 reimbursement, refund or elimination of reasonable costs of
10 collection assessed or imposed prior to the effective date of
11 this section. Additional costs may not be assessed on delinquent
12 taxes collected prior to the effective date of this section.
13 Section 8. Sections 22.4 and 22.5 of the act, added December
14 1, 2004 (P.L.1729, No.222), are amended to read:
15 [Section 22.4. Emergency and Municipal Services Taxes.--Any
16 reference in any act or law to an occupational privilege tax
17 shall mean the emergency and municipal services taxes as
18 provided for in this act.
19 Section 22.5. Restricted Use.--(a) Any municipality
20 deriving funds from the emergency and municipal services tax may
21 only use the funds for:
22 (1) police, fire and/or emergency services;
23 (2) road construction and/or maintenance; or
24 (3) reduction of property taxes.
25 (b) For the purpose of the emergency and municipal services
26 tax, the term municipality does not include a school district.]
27 Section 9. The act is amended by adding a section to read:
28 Section 22.6. Restricted Use.--(a) Any municipality
29 deriving funds from the local services tax may only use the
30 funds for:
20050S0157B2206 - 26 -
1 (1) Emergency services, which shall include emergency
2 medical services, police services and/or fire services.
3 (2) Road construction and/or maintenance.
4 (3) Reduction of property taxes.
5 (4) Property tax relief through implementation of a
6 homestead and farmstead exclusion in accordance with 53 Pa.C.S.
7 Ch. 85 Subch. F (relating to homestead property exclusion).
8 (b) In the event that a municipality decides to implement a
9 homestead and farmstead exclusion for purposes of providing
10 property tax relief in accordance with subsection (a)(4), the
11 following shall apply:
12 (1) The decision to provide a homestead and farmstead
13 exclusion shall be made, by ordinance, prior to December 1, with
14 the homestead and farmstead exclusion to take effect for the
15 fiscal year beginning the first day of January following
16 adoption of the ordinance. Upon adopting an ordinance in
17 accordance with this paragraph, a municipality shall, by first
18 class mail, notify the assessor, as defined in 53 Pa.C.S. § 8582
19 (relating to definitions), of its decision to provide a
20 homestead and farmstead exclusion.
21 (2) The assessor shall provide a municipality that will be
22 imposing a homestead and farmstead exclusion in accordance with
23 subsection (a)(4) with a certified report, as provided in 53
24 Pa.C.S. § 8584(i) (relating to administration and procedure),
25 listing information regarding homestead and farmstead properties
26 in the municipality as determined pursuant to applications filed
27 with the assessor in connection with this or any other law under
28 which a homestead or farmstead exclusion has been adopted. In
29 the year in which an ordinance is adopted in accordance with
30 paragraph (1), the assessor shall provide the certified report
20050S0157B2206 - 27 -
1 after being notified by the municipality of its decision to
2 provide a homestead and farmstead exclusion. In each succeeding
3 year, the assessor shall provide the certified report by
4 December 1 or at the same time the tax duplicate is certified to
5 the municipality, whichever occurs first. Any duty placed on an
6 assessor in accordance with this paragraph shall be in addition
7 to those established in 53 Pa.C.S. Ch. 85 Subch. F and the act
8 of June 27, 2006 (Sp.Sess. P.L. , No.1), known as the "Taxpayer
9 Relief Act."
10 (3) Only homestead or farmstead properties identified in the
11 certified report of the assessor obtained in any year shall be
12 eligible to receive the exclusion for the next fiscal year.
13 (4) In the year in which a municipality adopts the ordinance
14 evidencing its decision to implement a homestead and farmstead
15 exclusion, the municipality shall notify by first class mail the
16 owner of each parcel of residential property within the
17 municipality which is not approved as a homestead or farmstead
18 property or for which the approval is due to expire of the
19 following:
20 (i) That the homestead and farmstead exclusion program is to
21 be implemented to provide property tax relief as authorized by
22 subsection (a)(4), beginning in the next fiscal year.
23 (ii) That only properties currently identified in the
24 certified report of the assessor as having been approved in
25 whole or in part as homestead or farmstead properties shall be
26 entitled to an exclusion in the next fiscal year.
27 (iii) That owners of properties that have not been approved
28 by the assessor as homestead or farmstead properties may file an
29 application in accordance with 53 Pa.C.S. § 8584(a) by the
30 annual application deadline of March 1 in order to qualify for
20050S0157B2206 - 28 -
1 the program in the year following the next fiscal year.
2 (5) The one-time notice required by paragraph (4) may be
3 combined and made together with the annual notice required by
4 paragraph (7) or with an annual notice by a coterminous
5 political subdivision that has implemented a homestead and
6 farmstead exclusion.
7 (6) In the year in which the initial decision to provide a
8 homestead and farmstead exclusion is made and in each succeeding
9 year, a municipality shall, by resolution, fix the dollar amount
10 that is to be excluded from the assessed value of each homestead
11 and farmstead property for the next fiscal year, consistent with
12 53 Pa.C.S. §§ 8583 (relating to exclusion for homestead
13 property) and 8586 (relating to limitations). This determination
14 of the amount of the homestead and farmstead exclusion shall be
15 made, after receipt of the tax duplicate and the certified
16 report from the assessor, at the time the governing body of a
17 municipality determines the municipal budget and estimates
18 revenues to be derived from the local services tax for the next
19 fiscal year.
20 (7) Each year after the year in which the municipality
21 implements a homestead and farmstead exclusion and no later than
22 sixty days prior to the application deadline, the municipality
23 shall give notice of the existence of the municipality's
24 homestead and farmstead exclusion program, the need to file an
25 application in accordance with 53 Pa.C.S. § 8484(a) in order to
26 qualify for the program and the application deadline, which in
27 accordance with 53 Pa.C.S. § 8584(b), shall be March 1. This
28 annual notice, which shall be given by first class mail, need
29 only be sent to the owner of each parcel of residential property
30 in the municipality which is not approved as homestead or
20050S0157B2206 - 29 -
1 farmstead property or for which the approval is due to expire.
2 (c) For purposes of this section, the term "municipality"
3 does not include a school district.
4 Section 10. Any ordinance or resolution providing for the
5 levying, assessment or collection of a tax on individuals for
6 the privilege of engaging in an occupation which has been
7 enacted by a political subdivision prior to December 1, 2004,
8 shall continue in full force and effect, without reenactment, as
9 if such tax had been levied, assessed or collected as a local
10 services tax under section 2(9) of the act. All references in
11 any ordinance or resolution to a tax on the privilege of
12 engaging in an occupation shall be deemed to be a reference to a
13 local services tax for the purposes of the act.
14 Section 11. All emergency and municipal services taxes
15 levied for the calendar year beginning on January 1, 2006, shall
16 remain in effect for the calendar year beginning on January 1,
17 2006, and ending December 31, 2006, and are not otherwise
18 altered.
19 Section 12. (1) Except as provided in paragraphs (2) and
20 (3), the amendment or addition of the following provisions shall
21 apply to taxes levied for calendar year 2007 and each year
22 thereafter:
23 (i) The amendment of section 2 of the act.
24 (ii) The amendment of section 8 of the act.
25 (iii) The amendment of section 9 of the act, except
26 for any editorial amendment changing the reference from
27 the Department of Community Affairs to the Department of
28 Community and Economic Development.
29 (iv) The amendment of section 19 of the act.
30 (v) The amendment of section 20 of the act.
20050S0157B2206 - 30 -
1 (vi) The amendment of section 22.1 of the act.
2 (vii) The amendment of section 22.4 of the act.
3 (viii) The amendment of section 22.5 of the act.
4 (ix) The addition of section 22.6 of the act.
5 (2) The amendment or addition of the provisions listed
6 under paragraph (1) shall apply to taxes levied for calendar
7 year 2010 and each year thereafter in a city of the second
8 class and shall not affect the authority of a city of the
9 second class to levy a tax on individuals for the privilege
10 of engaging in an occupation, whether designated as an
11 emergency and municipal services tax or a local services tax,
12 for calendar years 2007, 2008 and 2009.
13 (3) The amendment of the introductory paragraph of
14 section 2 of the act shall not apply, until January 1, 2008,
15 to a municipality which reduced its real estate property tax
16 by at least 25% upon adoption of an ordinance pursuant to the
17 act of December 1, 2004 (P.L.1729, No.222), entitled "An act
18 amending the act of December 31, 1965 (P.L.1257, No.511),
19 entitled 'An act empowering cities of the second class,
20 cities of the second class A, cities of the third class,
21 boroughs, towns, townships of the first class, townships of
22 the second class, school districts of the second class,
23 school districts of the third class and school districts of
24 the fourth class including independent school districts, to
25 levy, assess, collect or to provide for the levying,
26 assessment and collection of certain taxes subject to maximum
27 limitations for general revenue purposes; authorizing the
28 establishment of bureaus and the appointment and compensation
29 of officers, agencies and employes to assess and collect such
30 taxes; providing for joint collection of certain taxes,
20050S0157B2206 - 31 -
1 prescribing certain definitions and other provisions for
2 taxes levied and assessed upon earned income, providing for
3 annual audits and for collection of delinquent taxes, and
4 permitting and requiring penalties to be imposed and
5 enforced, including penalties for disclosure of confidential
6 information, providing an appeal from the ordinance or
7 resolution levying such taxes to the court of quarter
8 sessions and to the Supreme Court and Superior Court,'
9 further providing for delegation of taxing powers and
10 restrictions thereon; providing for nonresident sports
11 facility usage fee, for parking tax rates and for payroll
12 taxes; further providing for limitations on rates of specific
13 taxes and for the appointment of a single collector of taxes;
14 further providing for the applicability of petitions under
15 the act of July 10, 1987 (P.L.246, No.47), known as the
16 Municipalities Financial Recovery Act; and making a repeal."
17 Section 13. Repeals are as follows:
18 (1) The General Assembly declares that the repeal under
19 paragraph (2) is necessary to effectuate the amendment of
20 section 2(9) of the act.
21 (2) Section 6 of the act of December 1, 2004 (P.L.1729,
22 No.222), entitled "An act amending the act of December 31,
23 1965 (P.L.1257, No.511), entitled 'An act empowering cities
24 of the second class, cities of the second class A, cities of
25 the third class, boroughs, towns, townships of the first
26 class, townships of the second class, school districts of the
27 second class, school districts of the third class and school
28 districts of the fourth class including independent school
29 districts, to levy, assess, collect or to provide for the
30 levying, assessment and collection of certain taxes subject
20050S0157B2206 - 32 -
1 to maximum limitations for general revenue purposes;
2 authorizing the establishment of bureaus and the appointment
3 and compensation of officers, agencies and employes to assess
4 and collect such taxes; providing for joint collection of
5 certain taxes, prescribing certain definitions and other
6 provisions for taxes levied and assessed upon earned income,
7 providing for annual audits and for collection of delinquent
8 taxes, and permitting and requiring penalties to be imposed
9 and enforced, including penalties for disclosure of
10 confidential information, providing an appeal from the
11 ordinance or resolution levying such taxes to the court of
12 quarter sessions and to the Supreme Court and Superior
13 Court,' further providing for delegation of taxing powers and
14 restrictions thereon; providing for nonresident sports
15 facility usage fee, for parking tax rates and for payroll
16 taxes; further providing for limitations on rates of specific
17 taxes and for the appointment of a single collector of taxes;
18 further providing for the applicability of petitions under
19 the act of July 10, 1987 (P.L.246, No.47), known as the
20 Municipalities Financial Recovery Act; and making a repeal,"
21 is repealed.
22 Section 14. This act shall take effect immediately.
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