PRINTER'S NO. 951
No. 819 Session of 2001
INTRODUCED BY CORMAN, LEMMOND, MOWERY, PUNT, THOMPSON, WAUGH AND M. WHITE, MAY 2, 2001
REFERRED TO FINANCE, MAY 2, 2001
AN ACT 1 Amending Title 53 (Municipalities Generally) of the Pennsylvania 2 Consolidated Statutes, authorizing counties to impose sales 3 and use tax; authorizing municipalities to impose personal 4 income and earned income and net profits taxes; empowering 5 municipalities and school districts to require county sales 6 and use taxes; authorizing school districts to impose taxes 7 on personal income; providing for the levying, assessment and 8 collection of such taxes; and providing for the powers and 9 duties of the Department of Community and Economic 10 Development, the Department of Revenue and the State 11 Treasurer. 12 The General Assembly of the Commonwealth of Pennsylvania 13 hereby enacts as follows: 14 Section 1. Sections 8401, 8402(a) and (b), 8404, 8701, 8702 15 and 8703 of Title 53 of the Pennsylvania Consolidated Statutes 16 are amended to read: 17 § 8401. Definitions. 18 The following words and phrases when used in this subpart 19 shall have the meanings given to them in this section unless the 20 context clearly indicates otherwise: 21 "Board of county commissioners." Includes the successor in 22 function to the board of county commissioners in a county which
1 has adopted a home rule charter under Subpart E of Part III 2 (relating to home rule and optional plan government), but does 3 not include the city council of a city of the first class. 4 Budgeted revenue." Local tax revenue, except the term does 5 not include revenue from: 6 (1) Delinquent taxes. 7 (2) Payments in lieu of taxes. 8 (3) The real estate transfer tax. 9 (4) The distribution of the Public Utility Realty Tax, 10 commonly known as PURTA. 11 (5) A mercantile or business privilege tax on gross 12 receipts. 13 (6) An amusement or admissions tax. 14 "Business." As defined in section 301 of the act of March 4, 15 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971. 16 "Compensation." As defined in section 301 of the act of 17 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 18 1971. 19 "County." A county-level municipality within this 20 Commonwealth, regardless of classification. The term includes a 21 county which has adopted a home rule charter or optional plan of 22 government under Subpart E of Part III (relating to home rule 23 and optional plan government). The term does not include a 24 county of the first class. 25 "Current year." The calendar year or the fiscal year for 26 which the tax is levied. 27 "Department." The Department of Revenue of the Commonwealth. 28 "Domicile." As defined in section 13 of the act of December 29 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling 30 Act. 20010S0819B0951 - 2 -
1 "Dwelling." A structure used as a place of habitation by a 2 natural person. 3 "Earned income." The classes of income defined as earned 4 income in section 13 of the act of December 31, 1965 (P.L.1257, 5 No.511), known as The Local Tax Enabling Act. 6 "Election officials." The county board of elections of each 7 county. 8 "Employer." As defined in section 301 of the act of March 4, 9 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971. 10 "Governing body." [A board of school directors of a school 11 district.] The board of county commissioners, including the 12 successor in function to the board of county commissioners in a 13 county which has adopted a home rule charter under Subpart E of 14 Part III (relating to home rule and optional plan government), 15 city council, borough council, incorporated town council, board 16 of township commissioners, board of township supervisors, a 17 governing council of a home rule municipality or optional plan 18 municipality, a governing council of any similar general purpose 19 unit of government which may hereafter be created by statute, or 20 a board of school directors of a school district. The term does 21 not include the city council of a city of the first class. 22 "Home rule municipality." A city, borough, incorporated town 23 or township which has adopted a home rule charter under Subpart 24 E of Part III (relating to home rule and optional plan 25 government). 26 "Homestead." A dwelling, including the parcel of land on 27 which the dwelling is located and the other improvements located 28 on the parcel for which any of the following apply: 29 (1) The dwelling is primarily used as the domicile of an 30 owner who is a natural person. The homestead for real 20010S0819B0951 - 3 -
1 property qualifying under this paragraph shall not include 2 the land on which the dwelling is located if the land is not 3 owned by a person who owns the dwelling. 4 (2) The dwelling is a unit in a condominium as the term 5 is defined in 68 Pa.C.S. § 3103 (relating to definitions) and 6 the unit is primarily used as the domicile of a natural 7 person who is an owner of the unit; or the dwelling is a unit 8 in a cooperative as the term is defined in 68 Pa.C.S. § 4103 9 (relating to definitions) and the unit is primarily used as 10 the domicile of a natural person who is an owner of the unit. 11 The homestead for a unit in a condominium or a cooperative 12 shall be limited to the assessed value of the unit, which 13 shall be determined in a manner consistent with the 14 assessment of real property taxes on those units under 68 15 Pa.C.S. (relating to real and personal property) or as 16 otherwise provided by law. If the unit is not separately 17 assessed for real property taxes, the homestead shall be a 18 pro rata share of the real property. 19 (3) The dwelling does not qualify under paragraphs (1) 20 and (2) and a portion of the dwelling is used as the domicile 21 of an owner who is a natural person. The homestead for real 22 property qualifying under this paragraph shall be the portion 23 of the real property that is equal to the portion of the 24 dwelling that is used as the domicile of an owner. 25 "Homestead property." A homestead for which an application 26 has been submitted and approved under section 8584 (relating to 27 administration and procedure). 28 "Inverse per capita income." A factor determined by dividing 29 the integer one by the per capita income of the municipality, as 30 determined by the most recent survey by the Department of 20010S0819B0951 - 4 -
1 Community and Economic Development. 2 "Local Tax Enabling Act." The act of December 31, 1965 3 (P.L.1257, No.511), known as The Local Tax Enabling Act. 4 "Local tax revenue." The revenue from taxes actually levied 5 and assessed by a county, municipality or school district. The 6 term does not include interest or dividend earnings, Federal or 7 State grants, contracts or appropriations, income generated from 8 operations or any other source that is revenue not derived from 9 taxes levied and assessed by a county, municipality or school 10 district. 11 "Municipality." [As defined in 1 Pa.C.S. § 1991 (relating to 12 definitions).] A city of the second class, city of the second 13 class A, city of the third class, borough, incorporated town, 14 township of the first class, township of the second class, home 15 rule municipality, optional plan municipality, optional form 16 municipality or similar general purpose unit of government which 17 may hereafter be created by statute, except a city of the first 18 class. 19 "Net profits." The classes of income defined as net profits 20 in section 13 of the act of December 31, 1965 (P.L.1257, 21 No.511), known as The Local Tax Enabling Act. 22 "Optional plan municipality." A city, borough, incorporated 23 town or township which has adopted an optional plan of 24 government under Subpart E of Part III (relating to home rule 25 and optional plan government). 26 "Owner." Includes any of the following: 27 (1) A joint tenant or tenant in common. 28 (2) A person who is purchasing real property under a 29 contract. 30 (3) A partial owner. 20010S0819B0951 - 5 -
1 (4) A person who owns real property as a result of being 2 a beneficiary of a will or trust or as a result of intestate 3 succession. 4 (5) A person who owns or is purchasing a dwelling on 5 leased land. 6 (6) A person holding a life lease in real property 7 previously sold or transferred to another. 8 (7) A person in possession under a life estate. 9 (8) A grantor who has placed the real property in a 10 revocable trust. 11 (9) A member of a cooperative as defined in 68 Pa.C.S. § 12 4103 (relating to definitions). 13 (10) A unit owner of a condominium as defined in 68 14 Pa.C.S. § 3103 (relating to definitions). 15 (11) A partner of a family farm partnership or a 16 shareholder of a family farm corporation as the terms are 17 defined in section 1101-C of the act of March 4, 1971 (P.L.6, 18 No.2), known as the Tax Reform Code of 1971. 19 "Personal income." Income enumerated in section 303 of the 20 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code 21 of 1971, as returned to and ascertained by the Department of 22 Revenue, subject, however, to any correction thereof for fraud, 23 evasion or error as finally ascertained by the Commonwealth. 24 "Political subdivision." As defined in 1 Pa.C.S. § 1991 25 (relating to definitions). 26 "Preceding year." The calendar year or fiscal year before 27 the current year. 28 "Primarily used." Usage of at least 51% of the square 29 footage of a dwelling. 30 "Relative tax effort." The total tax revenues from all 20010S0819B0951 - 6 -
1 sources of a municipality as reported to the Department of 2 Community and Economic Development, divided by the total tax 3 revenues from all sources from all municipalities in the county. 4 "Resident individual." An individual who is domiciled in a 5 municipality or a school district. 6 "School district." A school district of the first class A, 7 second class, third class or fourth class, including any 8 independent school district. 9 "Statewide average weekly wage." That amount determined 10 annually for each calendar year by the Department of Labor and 11 Industry under section 105.1 of the act of June 2, 1915 12 (P.L.736, No.338), known as the Workers' Compensation Act. 13 "Succeeding year." The calendar year or fiscal year 14 following the current year. 15 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2), 16 known as the Tax Reform Code of 1971. 17 "Taxpayer." An individual required under this subpart to 18 file a tax return or to pay a tax. 19 "Weighted formula." A formula dividing an allocation into 20 thirds, with one-third based on relative population, one-third 21 based on relative tax effort and one-third based on the relative 22 inverse per capita income. 23 § 8402. Scope and limitations. 24 (a) General rule.--Except as provided in subsections (b), 25 (c), (d), (e) and (f) and section 8405 (relating to 26 applicability), it is the intent of this subpart to confer upon 27 each county, municipality and school district the power to levy, 28 assess and collect [an earned income and net profits tax] taxes 29 upon the subjects of taxation as set forth in this subpart. 30 (b) Real estate transfer taxes.--This subpart does not 20010S0819B0951 - 7 -
1 affect the powers of a municipality or school district to levy, 2 assess and collect a real estate transfer tax, including any 3 real estate transfer tax levied under the authority of section 4 652.1(a)(4) of the act of March 10, 1949 (P.L.30, No.14), known 5 as the Public School Code of 1949. 6 * * * 7 § 8404. Certain rates of taxation limited. 8 If a municipality and school district both impose an earned 9 income and net profits tax on the same individual under the 10 Local Tax Enabling Act and the municipality and school district 11 are limited to or have agreed upon a division of the tax rate in 12 accordance with section 8 of the Local Tax Enabling Act, then 13 the municipality and school district that [continues] continue 14 to levy the earned income and net profits tax under the Local 15 Tax Enabling Act shall remain subject to that limitation or 16 agreement in the event that [the school district] one or the 17 other opts to impose an earned income and net profits tax under 18 section 8711 (relating to earned income and net profits tax) or 19 8742 (relating to local personal income tax). 20 § 8701. General tax authorization. 21 (a) General rule.--Subject to sections 8703 (relating to 22 adoption of referendum) and 8704 (relating to public referendum 23 requirements for increasing property taxes previously reduced) 24 and except as provided in subsection (b), each county, 25 municipality and school district shall have the power and may by 26 ordinance or resolution levy, assess and collect or provide for 27 the levying, assessment and collection of the [earned income and 28 net profits tax under] taxes on the subjects specified in this 29 chapter. 30 (b) Exclusions.--No county, municipality or school district 20010S0819B0951 - 8 -
1 which levies [an earned income and net profits] a tax authorized 2 by this chapter shall have any power or authority to levy, 3 assess or collect: 4 (1) A tax based upon a flat rate or on a millage rate on 5 an assessed valuation of a particular trade, occupation or 6 profession, commonly known as an occupation tax. 7 (2) A tax at a set or flat rate upon persons employed 8 within the taxing district, commonly known as an occupational 9 privilege tax. 10 (3) A per capita, poll, residence or similar head tax. 11 (4) The earned income and net profits tax levied under 12 the Local Tax Enabling Act. 13 (5) An earned income tax under the act of August 24, 14 1961 (P.L.1135, No.508), referred to as the First Class A 15 School District Earned Income Tax Act, or under the 16 additional authority in section 652.1(a)(2) of the act of 17 March 10, 1949 (P.L.30, No.14), known as the Public School 18 Code of 1949. 19 (6) Any tax under section 652.1(a)(4) of the Public 20 School Code of 1949 except as it pertains to real estate 21 transfer taxes. 22 (7) Except for taxes permitted under section 8402(b) 23 (relating to scope and limitations), (c), (d), (e) and (f), 24 any other tax authorized or permitted under the Local Tax 25 Enabling Act. 26 (c) Delinquent taxes.--The provisions of subsection (b) 27 shall not apply to collection of delinquent taxes. 28 § 8702. Continuity of tax. 29 [The earned income and net profits]A tax levied under the 30 provisions of this chapter shall continue in force on a fiscal 20010S0819B0951 - 9 -
1 year basis without annual reenactment unless the rate of tax is 2 increased or the tax is subsequently repealed. 3 § 8703. Adoption of referendum. 4 (a) General rule.-- 5 (1) In order to levy [an earned income and net profits] 6 a tax under this chapter, a governing body 7 shall use the procedures set forth in subsection (b). (2) 8 Any governing body after making an election to levy [an 9 earned income and net profits] a tax under this chapter may, 10 after a period of at least three full fiscal years, elect under 11 the provisions of subsection (c) to levy, assess and collect the 12 taxes prohibited by section 8701(b) (relating to general tax 13 authorization) to the extent otherwise provided by law. If the 14 electorate approves such referendum, the governing body shall 15 lose the authority to continue to levy [an earned income and net 16 profits] a tax authorized under this chapter. 17 (b) Public referendum requirements.--Subject to the notice 18 and public hearing requirements of section 8716 (relating to 19 procedure and administration), a governing body may levy [the 20 earned income and net profits] a tax under this chapter only by 21 obtaining the approval of the electorate of the affected county, 22 municipality or school district in a public referendum at only 23 the municipal election preceding the fiscal year when the 24 [earned income and net profits] tax will be initially imposed. 25 The referendum question must state the initial rate of the 26 proposed [earned income and net profits] tax, the reason for the 27 tax and the amount of proposed budgeted revenue growth, if any, 28 in the first fiscal year following adoption of the referendum, 29 expressed as a percent increase over the prior year's budgeted 30 revenue. Any increase in budgeted revenue between the first 20010S0819B0951 - 10 -
1 fiscal year following adoption of the referendum and the prior
2 year's budgeted revenue shall not exceed the annual percent
3 change in the Statewide average weekly wage. The question shall
4 be in clear language that is readily understandable by a
5 layperson. For the purpose of illustration, a referendum
6 question may be framed as follows:
7 Do you favor the imposition of an [earned income and net
8 profits tax of] X% (name of tax) to be used to replace
9 (names of local taxes to be repealed), reduce real
10 property taxes by X% by means of a homestead exclusion
11 and provide for a one-time revenue increase of X% over
12 the preceding fiscal year?
13 A nonlegal interpretative statement must accompany the question
14 in accordance with section 201.1 of the act of June 3, 1937
15 (P.L.1333, No.320), known as the Pennsylvania Election Code,
16 that includes the following: the initial rate of the [earned
17 income and net profits] tax and the maximum allowable rate of
18 the [earned income and net profits] tax imposed under this
19 chapter; the estimated revenues to be derived from the initial
20 rate of the [earned income and net profits] tax imposed under
21 this chapter; the amount of proposed revenue growth, if any, in
22 the first fiscal year following adoption of the referendum; the
23 estimated reduction in real property taxes and the elimination
24 of certain existing taxes under this chapter; the identification
25 of the existing taxes to be eliminated under this chapter; the
26 method to be used to reduce real property taxes; the class or
27 classes of real property for which real property taxes would be
28 reduced; and the estimated amount of real property tax reduction
29 by class, expressed as an average percent reduction by class.
30 Any governing body which uses the procedures under this section
20010S0819B0951 - 11 -
1 shall not be subject to the provisions of section 8704 (relating 2 to public referendum requirements for increasing property taxes 3 previously reduced) for any future increases in the [earned 4 income and net profits] tax rates authorized under this chapter. 5 Any future real property tax rate increases are subject to the 6 provisions of section 8704. If the ballot question fails to 7 receive a majority vote pursuant to this section, approval of 8 the electorate under section 8704 shall not be required to 9 increase the rate of any tax which the governing body of the 10 affected school district is authorized to levy and increase 11 pursuant to any other act. 12 (c) Public referendum requirements to end participation 13 under this chapter.--Subject to the notice and public hearing 14 requirements in section 4 of the Local Tax Enabling Act, a 15 governing body may elect to end participation under this chapter 16 in accordance with subsection (a)(2) by obtaining the approval 17 of the electorate of the affected county, municipality or school 18 district in a public referendum at a municipal election. 19 (d) Public requirements to initiate referendum.-- 20 (1) If the governing body of a county municipality or 21 school district fails to place a referendum question on the 22 ballot within two years after the effective date of this 23 chapter, the electors of the county, municipality or school 24 district may: 25 (i) Circulate a petition which, if signed by 26 electors comprising 2% of the number of electors voting 27 for the office of Governor in the last gubernatorial 28 election in the county, municipality or school district 29 and filed with the election officials and submitted to 30 the governing body thereof, shall require the governing 20010S0819B0951 - 12 -
1 body to establish a local tax study commission. The 2 provisions under paragraph (2)(v), (vi), (vii), (viii) 3 (ix) and (x) shall not apply to this subparagraph. 4 (ii) If the local tax study commission makes a 5 recommendation to levy [the earned income and net 6 profits] a tax under this chapter and the governing body 7 fails to place the recommendation or other alternative of 8 the governing body authorized under this chapter on the 9 ballot in accordance with this chapter at the next 10 municipal election occurring at least 90 days after the 11 submission of the recommendation to the governing body, a 12 petition under this paragraph may be circulated. If the 13 petition is signed by the electors comprising 5% of the 14 number of electors voting for the office of Governor in 15 the last gubernatorial election in the county, 16 municipality or school district and filed with election 17 officials at least 90 days prior to the next municipal 18 election, the petition shall compel the election 19 officials to place the recommendation upon the ballot at 20 the next municipal election occurring at least 90 days 21 after the filing of the petition. 22 (2) The following requirements shall apply to the 23 process under paragraph (1): 24 (i) The name and street address of each elector 25 signing the petition and of the person filing the 26 petition shall be clearly stated on the petition. The 27 petition shall include an affidavit of the circulator 28 that he or she is a qualified elector of the county, 29 municipality or school district referred to in the 30 petition; that the signers signed with full knowledge of 20010S0819B0951 - 13 -
1 the contents of the petition; that the signers' 2 residences are correctly stated; and that, to the best of 3 the circulator's knowledge and belief, the signers are 4 qualified electors. 5 (ii) The election officials shall, within ten days 6 after filing, review the petition as to the number and 7 qualifications of signers. If the petition appears to be 8 defective, the election officials shall immediately 9 notify the person filing the petition of the defect and 10 may reject the petition if warranted. 11 (iii) The petition as submitted to the election 12 officials, along with the list of signatories, shall be 13 open to public inspection in the office of the election 14 officials. 15 (iv) If the election officials find that the 16 petition as submitted is in proper order, they shall send 17 copies of the petition without signatures thereon to the 18 governing body involved. 19 (v) The procedure for the referendum shall be 20 governed by the act of June 3, 1937 (P.L.1333, No.320), 21 known as the Pennsylvania Election Code. 22 (vi) If the election officials find the petition 23 meets the requirements of this chapter, they shall place 24 the proposal on the ballot in a manner fairly 25 representing the content of the petition for decision by 26 referendum at the proper election. 27 (vii) The election officials shall certify the date 28 for the referendum and shall notify the governing body at 29 least 30 days prior to such date. 30 (viii) At least 30 days' notice of the referendum 20010S0819B0951 - 14 -
1 shall be given by proclamation of the governing body. A 2 copy of the proclamation shall be posted at each polling 3 place on the day of the election and shall be published 4 once in at least one newspaper of general circulation 5 which is distributed within the county, municipality or 6 school district during the 30-day period prior to the 7 election. 8 (ix) Approval of a referendum shall be by majority 9 vote of those voting in the county, municipality or 10 school district involved. 11 (x) The election officials shall certify the results 12 of the referendum to the governing body. 13 (e) School districts located in more than one county.-- 14 (1) In the event a school district is located in more 15 than one county, petitions under this section shall be filed 16 with the election officials of the county wherein the 17 administrative offices of the school district are located. 18 (2) The election officials receiving a petition shall be 19 responsible for all administrative functions in reviewing and 20 certifying the validity of the petition and for making all 21 necessary communications with the school district. 22 (3) If the election officials of the county receiving 23 the petition certify that it is sufficient under this subpart 24 and determine that a question should be placed upon the 25 ballot, such decision shall be communicated to election 26 officials in any other county in which the school district is 27 also located. Election officials in the other county or 28 counties shall cooperate with election officials of the 29 county receiving the petition to insure that an identical 30 question is placed on the ballot at the same election 20010S0819B0951 - 15 -
1 throughout the entire school district. 2 (4) Election officials from each county involved shall 3 independently certify the results from their county to the 4 governing body. 5 Section 2. Sections 8705, 8706, 8711, 8712, 8713(b), 8714, 6 8715, 8716 and 8717 of Title 53 are amended to read: 7 § 8705. Local tax study commission. 8 (a) Appointment.--A governing body may appoint a local tax 9 study commission. 10 (b) Membership.--The local tax study commission shall 11 consist of five members who are resident individuals or 12 taxpayers of the county, municipality or school district and 13 shall reflect the socioeconomic, age and occupational diversity 14 of the county, municipality or school district to the extent 15 possible. 16 (1) Except for paragraph (2), no member shall be an 17 official or employee, or a relative thereof, of the county, 18 municipality or school district. 19 (2) One member may be a member of the governing body. 20 (c) Staff and expenses.--The governing body shall provide 21 necessary and reasonable support staff and shall reimburse the 22 members of the local tax study commission for necessary and 23 reasonable expenses in the discharge of their duties. 24 (d) Contents of study.--The local tax study commission shall 25 study the existing taxes levied, assessed and collected by the 26 county, municipality or school district and their effect. The 27 local tax study commission shall determine how the tax policies 28 of the county, municipality or school district could be improved 29 by the levy, assessment and collection of the taxes authorized 30 pursuant to this chapter. The study shall include, but not be 20010S0819B0951 - 16 -
1 limited to, consideration of all of the following: 2 (1) Historic and present rates of and revenue from taxes 3 currently levied, assessed and collected. 4 (2) The age, income, employment and property use 5 characteristics of the existing tax base. 6 (3) Projected revenues of taxes currently levied, 7 assessed and collected, including taxes authorized and taxes 8 not levied under this chapter. 9 (e) Recommendation.--Within 90 days of its appointment, the 10 local tax study commission shall make a nonbinding 11 recommendation to the governing body regarding the imposition of 12 [an earned income and net profits tax] the tax or taxes to be 13 levied, assessed and collected commencing the next fiscal year. 14 Except as provided in subsection (f), if the governing body 15 appoints a commission, [the earned income and net profits tax] 16 taxes authorized under this chapter may not be levied, assessed 17 or collected until receipt of the recommendation. No later than 18 90 days prior to the next municipal election occurring at least 19 150 days after the submission of the recommendation, the 20 governing body shall accept or reject the recommendation of the 21 local tax study commission or adopt an alternative proposal 22 authorized under this chapter. 23 (f) Failure to issue a recommendation.--If the local tax 24 study commission fails to make a recommendation under subsection 25 (e), the governing body may adopt a proposal authorized under 26 this chapter. 27 (g) Public distribution of report.--The local tax study 28 commission shall publish a final report of its findings and 29 recommendation and deliver the report to the governing body. The 30 governing body shall supply copies to any interested persons 20010S0819B0951 - 17 -
1 upon request. 2 (h) Materials.--All records of the local tax study 3 commission shall be available for public inspection during the 4 regular business hours of the county, municipality or school 5 district. 6 § 8706. Property tax limits on reassessment. 7 After any county makes a countywide revision of assessment of 8 real property at values based upon an established predetermined 9 ratio as required by law or after any county changes its 10 established predetermined ratio, each county, municipality or 11 school district that has made an election under section 8703 12 (relating to adoption of referendum), which hereafter for the 13 first time levies its real estate taxes on that revised 14 assessment or valuation, shall for the first year reduce its tax 15 rate, if necessary, for the purpose of having the percentage 16 increase in taxes levied for that year against the real 17 properties contained in the duplicate for the preceding year be 18 less than or equal to the percentage increase in the Statewide 19 average weekly wage for the preceding year notwithstanding the 20 increased valuations of such properties under the revised 21 assessment. For the purpose of determining the total amount of 22 taxes to be levied for the first year, the amount to be levied 23 on newly constructed buildings or structures or on increased 24 valuations based on new improvements made to existing houses 25 need not be considered. The tax rate shall be fixed for that 26 year at a figure which will accomplish this purpose. The 27 provisions of section 8704 (relating to public referendum 28 requirements for increasing property taxes previously reduced) 29 shall apply to increases in the tax rate above the limits 30 provided in this section. 20010S0819B0951 - 18 -
1 § 8711. Earned income and net profits tax. 2 A municipality and a school district shall have the power to 3 levy, assess and collect a tax on the earned income and net 4 profits of resident individuals of the municipality or school 5 district up to a maximum rate of 1.5%. The earned income and net 6 profits tax may be levied by the municipality and the school 7 district at a rate of 1.0%, 1.25% or 1.5%. 8 § 8712. Collections. 9 Any municipality or school district imposing a tax under 10 section 8711 (relating to earned income and net profits tax) 11 shall designate the tax officer who is appointed under section 12 10 of the Local Tax Enabling Act, or otherwise by law, as the 13 collector of the earned income and net profits tax. In the 14 performance of the tax collection duties under this subchapter, 15 the designated tax officer shall have all the same powers, 16 rights, responsibilities and duties for the collection of the 17 taxes which may be imposed under the Local Tax Enabling Act, 18 Subchapter C of Chapter 84 (relating to local taxpayers bill of 19 rights) or as otherwise provided by law. 20 § 8713. Credits. 21 * * * 22 (b) State tax credit.--A credit against personal income tax 23 due to the Commonwealth under section 302 of the Tax Reform Code 24 shall be granted to all nonresidents of a city of the first 25 class who are subject to a tax imposed by a city of the first 26 class pursuant to the act of August 5, 1932 (Sp.Sess., P.L.45, 27 No.45), referred to as the Sterling Act. The credit shall equal 28 0.2756% of salaries, wages, commissions, compensation or other 29 income received for work done or services performed within a 30 city of the first class. The Secretary of Revenue shall 20010S0819B0951 - 19 -
1 promulgate such regulations and forms as are necessary to 2 implement the provisions of this subsection. This section shall 3 only apply to residents of municipalities and school districts 4 which impose the tax under this subchapter. A governing body of 5 a school district in a county of the second class A shall, and a 6 governing body of a school district in a county of the third 7 class may, include in the referendum question under section 8703 8 (relating to adoption of referendum) language asking whether the 9 credit against the personal income tax in this subsection should 10 be provided to the nonresident taxpayer in the city of the first 11 class or the school district in which the taxpayer resides for 12 the purpose of making additional tax reductions in the same 13 manner as section 8717 (relating to disposition of earned income 14 and net profits tax revenue). Should any court of competent 15 jurisdiction determine that this subsection is unconstitutional, 16 the provisions of this subsection shall be void and no credit 17 shall be expanded or extended in any way by any court. 18 § 8714. Earned income and net profits tax exemption. 19 A municipality or school district that imposes an earned 20 income and net profits tax under this chapter may exempt from 21 the payment of that tax any person whose total income from all 22 sources is less than $7,500. 23 § 8715. Rules and regulations. 24 Taxes imposed under section 8711 (relating to earned income 25 and net profits tax) will be subject to all regulations adopted 26 under section 13 of the Local Tax Enabling Act. A municipality 27 or school district may adopt regulations for the processing of 28 claims for credits or exemptions under sections 8713 (relating 29 to credits) and 8714 (relating to earned income and net profits 30 tax exemption). 20010S0819B0951 - 20 -
1 § 8716. Procedure and administration. 2 In order to levy the tax under section 8711 (relating to 3 earned income and net profits tax), the governing body shall 4 adopt [a] an ordinance or a resolution which shall refer to this 5 subchapter prior to placing a question on the ballot under 6 section 8703 (relating to adoption of referendum). Prior to 7 adopting [a] an ordinance or a resolution imposing the tax 8 authorized by section 8711, the governing body shall give public 9 notice of its intent to adopt the ordinance or a resolution in 10 the manner provided by section 4 of the Local Tax Enabling Act 11 and shall conduct at least one public hearing regarding the 12 proposed adoption of the ordinance or resolution. 13 § 8717. Disposition of earned income and net profits tax 14 revenue. 15 The disposition of revenue from an earned income and net 16 profits tax or an increase in the rate of an earned income and 17 net profits tax imposed by municipalities and school districts 18 under the authority of this chapter shall occur in the following 19 manner: 20 (1) For the fiscal year of implementation of a newly 21 imposed income tax, all earned income and net profits tax 22 revenue received by a municipality or school district shall 23 be used first to offset any lost revenue to the municipality 24 or school district from the taxes prohibited under section 25 8701(b) (relating to general tax authorization) in an amount 26 equal to the revenue collected from the prohibited taxes in 27 section 8701(b) in the preceding fiscal year; second, to 28 provide for an increase in budgeted revenues over the 29 preceding fiscal year in accordance with the amount specified 30 in the referendum question approved by the voters under 20010S0819B0951 - 21 -
1 section 8703 (relating to adoption of referendum); and third, 2 to reduce the municipal or school district real property tax 3 in the following order: 4 (i) By means of an exclusion for homestead property 5 pursuant to section 8583 (relating to exclusion for 6 homestead property). 7 (ii) By means of a reduction in the millage rate 8 after the limit on the exclusion for homestead property 9 has been reached under section 8586 (relating to 10 limitations). 11 (2) For the fiscal year of implementation of an increase 12 in the rate of the existing earned income and net profits tax 13 imposed under this chapter, all revenue received by a 14 municipality or school district directly attributable to the 15 increased rate shall be used to reduce the municipal or 16 school district real property tax in the following order: 17 (i) By means of an exclusion for homestead property 18 pursuant to section 8583. 19 (ii) By means of a reduction in the millage rate 20 after the limit on the exclusion for homestead property 21 has been reached under section 8586. 22 Section 3. Chapter 87 of Title 53 is amended by adding 23 subchapters to read: 24 SUBCHAPTER C 25 COUNTY SALES AND USE TAX 26 Sec. 27 8721. Construction. 28 8722. Imposition. 29 8723. Situs. 30 8724. Licenses. 20010S0819B0951 - 22 -
1 8725. Rules and regulations; collection costs. 2 8726. Procedure and administration. 3 8727. County sales and use tax funds. 4 8728. Disbursements. 5 8729. Adoption of municipal resolutions and school district 6 petitions. 7 8730. Qualified municipalities and school districts. 8 8731. Disposition of sales tax revenues. 9 § 8721. Construction. 10 The tax imposed by the governing body of a county under this 11 subchapter shall be in addition to any tax imposed by the 12 Commonwealth under Article II of the Tax Reform Code. Except for 13 the differing situs provisions under section 8723 (relating to 14 situs), the provisions of Article II of the Tax Reform Code 15 shall apply to the tax. 16 § 8722. Imposition. 17 (a) Sales.--The governing body of a county, except for a 18 county of the second class, may levy and assess upon each 19 separate sale at retail of tangible personal property or 20 services, as defined in Article II of the Tax Reform Code, 21 within the boundaries of the county, a tax on the purchase 22 price. The tax shall be collected by the vendor from the 23 purchaser and shall be paid over to the Commonwealth as provided 24 in this subchapter. The sales tax shall not be paid to the 25 Commonwealth by any person who has paid the tax imposed under 26 Chapter 5 of the act of June 5, 1991 (P.L.9, No.6), known as the 27 Pennsylvania Intergovernmental Cooperation Authority Act for 28 Cities of the First Class, or subdivision (e) of Article XXXI-B 29 of the act of July 28, 1953 (P.L.723, No.230), known as the 30 Second Class County Code, equal to or greater than the tax 20010S0819B0951 - 23 -
1 imposed under this subsection. 2 (b) Use.--In any county, except for a county of the second 3 class, within which the tax authorized in subsection (a) is 4 imposed, there shall be levied, assessed and collected upon the 5 use, within the county, of tangible personal property purchased 6 at retail and on services purchased at retail, as defined in 7 Article II of the Tax Reform Code, a tax on the purchase price. 8 The tax shall be paid over to the Commonwealth by the person who 9 makes the use. The use tax imposed under this subchapter shall 10 not be paid over to the Commonwealth by any person who has paid 11 the tax imposed under: 12 (1) Subsection (a). 13 (2) This subsection to the vendor with respect to the 14 use. 15 (3) Chapter 5 of the Pennsylvania Intergovernmental 16 Cooperation Authority Act for Cities of the First Class, 17 equal to or greater than the tax imposed under either 18 subsection (a) or this subsection. 19 (4) Subdivision (e) of Article XXXI-B of the Second 20 Class County Code equal to or greater than the tax imposed 21 under either subsection (a) or this subsection. 22 (c) Rate and uniformity.-- 23 (1) The tax authorized by subsections (a) and (b) shall 24 be imposed at a rate of 1%. 25 (2) The tax imposed by subsections (a) and (b) shall be 26 uniform. 27 (d) Computation.--The tax imposed under this section shall 28 be computed in the manner set forth in section 503(e)(2) of the 29 Pennsylvania Intergovernmental Cooperation Authority Act for 30 Cities of the First Class. 20010S0819B0951 - 24 -
1 § 8723. Situs. 2 (a) General rule.--Except as provided in subsection (b), the 3 situs of sales at retail or uses, including leases, of motor 4 vehicles, aircraft, motorcraft and utility services shall be 5 determined in the manner specified by section 504 of the act of 6 June 5, 1991 (P.L.9, No.6), known as the Pennsylvania 7 Intergovernmental Cooperation Authority Act for Cities of the 8 First Class, as well as the Tax Reform Code. 9 (b) Premium cable services.--The sale or use of premium 10 cable service shall be deemed to occur at the service address in 11 the county which is the address where the customer cable 12 connection is located. This subsection shall determine the situs 13 of premium cable service for the purpose of all local sales 14 taxes, including those imposed pursuant to Chapter 5 of the 15 Pennsylvania Intergovernmental Cooperation Authority Act for 16 Cities of the First Class and pursuant to subdivision (e) of 17 Article XXXI-B of the act of July 28, 1953 (P.L.723, No.230), 18 known as the Second Class County Code. 19 (c) Telecommunications service.--The situs of 20 telecommunications service under this chapter shall be 21 determined in accordance with regulations adopted by the 22 department, which shall be uniform among all counties, and shall 23 be consistent with regulations promulgated under subdivision (e) 24 of Article XXXI-B the Second Class County Code, Article II of 25 the Tax Reform Code and Chapter 5 of the Pennsylvania 26 Intergovernmental Cooperation Authority Act for Cities of the 27 First Class. 28 § 8724. Licenses. 29 A license for the collection of the tax imposed by this 30 subchapter shall be issued in the same manner as is provided for 20010S0819B0951 - 25 -
1 in section 505 of the act of June 5, 1991 (P.L.9, No.6), known 2 as the Pennsylvania Intergovernmental Cooperation Authority Act 3 for Cities of the First Class. Licensees shall be entitled to 4 the same discount as provided in section 227 of the Tax Reform 5 Code. 6 § 8725. Rules and regulations; collection costs. 7 (a) Regulations.--Rules and regulations shall be applicable 8 to the taxes imposed under section 8722 (relating to imposition) 9 in the same manner as is provided for in section 506(1) and (2) 10 of the act of June 5, 1991 (P.L.9, No.6), known as the 11 Pennsylvania Intergovernmental Cooperation Authority Act for 12 Cities of the First Class. 13 (b) Administrative costs.--The department, to cover its 14 costs of administration, shall be entitled to retain a sum equal 15 to the costs of administration. When the annual operating budget 16 for the department is submitted to the General Assembly, the 17 department shall also submit to the chairman and minority 18 chairman of the Appropriations Committee of the Senate and to 19 the chairman and minority chairman of the Appropriations 20 Committee of the House of Representatives a report of the actual 21 sums retained for costs of collection in the preceding fiscal 22 year, together with all supporting details. 23 § 8726. Procedure and administration. 24 (a) Ordinance.--Any county desiring to impose the tax 25 authorized by section 8722 (relating to imposition) shall give 26 at least 60 days' written notice to every municipality and 27 school district located in the county of its intent to impose 28 the tax and shall adopt an ordinance after the expiration of 60 29 days after the date of such notice. The notice and ordinance 30 shall state the tax rate and refer to this subchapter. The 20010S0819B0951 - 26 -
1 ordinance shall authorize the imposition of all taxes provided 2 for in section 8722. Prior to adopting an ordinance imposing the 3 tax authorized by section 8722, the governing body of the county 4 shall give public notice of its intent to adopt the ordinance in 5 the manner provided by section 4 of the Local Tax Enabling Act 6 and shall conduct at least one public hearing regarding the 7 proposed adoption of the ordinance. 8 (b) Notification to department.--A certified copy of the 9 county ordinance shall be delivered to the department by June 1 10 of the year prior to the effective date thereof. The county 11 ordinance shall become effective on the January 1 following at 12 least seven months after the date of enactment of the county 13 ordinance. 14 (c) Delivery of repeal ordinance.--A certified copy of a 15 repeal ordinance shall be delivered to the department at least 16 120 days prior to the effective date of the repeal. 17 § 8727. County sales and use tax funds. 18 There is hereby created for each county levying the tax under 19 section 8722 (relating to imposition) the (proper name) County 20 Sales and Use Tax Fund. The State Treasurer shall be custodian 21 of the funds which shall be subject to the provisions of law 22 applicable to funds listed in section 302 of the act of April 9, 23 1929 (P.L.343, No.176), known as The Fiscal Code. Taxes imposed 24 under section 8722 shall be received by the department and paid 25 to the State Treasurer and, along with interest and penalties, 26 less any collection costs allowed under this subchapter and any 27 refunds and credits paid, shall be credited to the funds not 28 less frequently than every two weeks. During any period prior to 29 the credit of moneys to the funds, interest earned on moneys 30 received by the department and paid to the State Treasurer under 20010S0819B0951 - 27 -
1 this subchapter shall be deposited into the funds. All moneys in 2 the funds, including, but not limited to, moneys credited to the 3 funds under this section, prior year encumbrances and the 4 interest earned thereon, shall not lapse or be transferred to 5 any other fund, but shall remain in the funds. Pending their 6 disbursement, moneys received on behalf of or deposited into the 7 funds shall be invested or reinvested as are other moneys in the 8 custody of the State Treasurer in the manner provided by law. 9 All earnings received from the investment or reinvestment of the 10 moneys shall be credited to the respective funds. The Auditor 11 General shall periodically audit the records of the department 12 relative to its duties under this section and shall furnish the 13 results of such audit to any county levying the sales and use 14 tax under section 8722 and to any municipality or school 15 district qualified under section 8730 (relating to qualified 16 municipalities and school districts). 17 § 8728. Disbursements. 18 (a) General rule.--On or before the tenth day of every 19 month, the State Treasurer shall make the disbursements on 20 behalf of the county imposing the tax out of the moneys which 21 are, as of the last day of the previous month, contained in the 22 respective county sales and use tax fund. 23 (b) Disbursement to counties.--The State Treasurer shall 24 disburse to a county imposing the tax authorized under section 25 8722 (relating to imposition) an amount of money equal to 50% of 26 the tax collected in that county and remitted to the department 27 and deposited in the respective county sales and use tax fund. 28 The county shall deposit the revenue from the respective county 29 sales and use tax fund into the county general fund for 30 disposition as provided under section 8731 (relating to 20010S0819B0951 - 28 -
1 disposition of sales tax revenues). 2 (c) Disbursement to municipalities.--The State Treasurer 3 shall, at the same time, disburse to the municipalities 25% of 4 the tax collected in their respective counties as provided in 5 section 8730 (relating to qualified municipalities and school 6 districts). Each municipality's portion shall be deposited in 7 the municipal general fund for disposition as provided in 8 section 8731. 9 (d) Disbursement to school districts.--The State Treasurer 10 shall, at the same time, disburse to the school districts 25% of 11 the tax collected in their respective counties as provided in 12 section 8730. Each school district's portion shall be deposited 13 in the school district's general fund for disposition as 14 provided in section 8731. 15 § 8729. Adoption of municipal resolutions and school district 16 petitions. 17 (a) General rule.--No municipality shall be entitled to a 18 disbursement under section 8728(c) (relating to disbursements) 19 and no school district shall be entitled to a disbursement under 20 section 8728(d) unless one of the following applies: 21 (1) Prior to enactment of the county ordinance, it 22 adopts a municipal resolution or a school district petition 23 containing the statement: 24 We strongly urge the county to enact a county sales 25 and use tax and intend to accept disbursements of the 26 sales and use taxes collected. 27 Any municipality which does not enact a resolution and any 28 school district which does not enact a petition in compliance 29 with this paragraph shall not be entitled to and shall not 30 receive any distribution from funds collected during the 20010S0819B0951 - 29 -
1 first 24 months immediately following the initial date of 2 imposition of such tax. 3 (2) Prior to October 1 of any year after the enactment 4 of the county resolution, it adopts a municipal resolution or 5 a school district petition containing the statement: 6 We support the enactment by the county of the county 7 sales and use tax and strongly urge its continuation 8 and intend to accept disbursements of the sales and 9 use taxes collected. 10 (b) Delivery.--A certified copy of the municipal resolution 11 or the school district petition shall be delivered to the county 12 commissioners, the department and the State Treasurer on or 13 before the enactment of the county resolution or October 15 of 14 any year thereafter, as the case may be. 15 § 8730. Qualified municipalities and school districts. 16 (a) General rule.-- 17 (1) The State Treasurer shall distribute, on a weighted 18 formula basis, to each municipality that qualifies under 19 subsection (c) the appropriate percentage of revenues 20 received from the county sales and use tax. 21 (2) The State Treasurer shall distribute to each school 22 district that qualifies under subsection (c) a portion of the 23 total disbursement to school districts which is equal to the 24 total disbursement to school districts multiplied by the 25 ratio of average daily membership of the school district 26 divided by the sum of the average daily membership of all 27 school districts in the county. For the purposes of this 28 section, "average daily membership" shall mean "average daily 29 membership" as defined by the act of March 10, 1949 (P.L.30, 30 No.14), known as the Public School Code of 1949. For school 20010S0819B0951 - 30 -
1 districts located in more than one county, the average daily 2 membership shall be multiplied by a factor calculated by 3 dividing the square mileage of the school district located in 4 the county by the total square mileage of the school 5 district. 6 (b) Retention by county.--If a municipality or school 7 district fails to meet the requirements of subsection (c), its 8 disbursement shall be included in the disbursement to the county 9 under section 8728 (relating to disbursements). 10 (c) Qualifications.--Municipalities and school districts 11 qualified to receive disbursements under this section are 12 municipalities and school districts located within the county 13 which adopt in a timely fashion the resolution or petition 14 required under section 8729 (relating to adoption of municipal 15 resolutions and school district petitions). 16 § 8731. Disposition of sales tax revenues. 17 (a) Counties.--In the fiscal year of implementation, each 18 county that imposes a sales and use tax under this chapter shall 19 use all revenues from the tax first to offset any lost revenue 20 to the county from the taxes prohibited under section 8701(b) 21 (relating to general tax authorization) in an amount equal to 22 the revenue the county collected from the prohibited taxes in 23 the immediately preceding fiscal year; second, to provide for an 24 increase in budgeted revenues over the preceding fiscal year in 25 accordance with the amount specified in the referendum question 26 approved by the voters under section 8703 (relating to adoption 27 of referendum); and third, to reduce the county real property 28 tax in the following order: 29 (1) By means of an exclusion for homestead property 30 pursuant to section 8583 (relating to exclusion for homestead 20010S0819B0951 - 31 -
1 property). 2 (2) By means of a reduction in the millage rate after 3 the limit on the exclusion for homestead property has been 4 reached under section 8586 (relating to limitations). 5 The department shall provide to each county that imposes a sales 6 and use tax an estimate of the total dollar amount of revenue 7 that the county can expect to receive from the county's share of 8 the 1% county sales and use tax for the fiscal year of 9 implementation. The department may charge the county for the 10 actual costs of calculating the requested estimates. Guidelines 11 concerning the costs shall be published in the Pennsylvania 12 Bulletin. In the event the actual amount of sales and use tax 13 revenue received by a county is less than the estimate of sales 14 and use tax revenue provided by the department, the county may 15 increase its real property tax millage rate to the level 16 necessary to offset any shortfall resulting from an 17 overestimation of sales and use tax revenue, as certified by the 18 department, in the fiscal year of implementation. The increase 19 shall not be subject to the provisions of section 8704(a) 20 (relating to public referendum requirements for increasing 21 property taxes previously reduced). 22 (b) Municipalities and school districts.-- 23 (1) All sales and use tax revenues received by any 24 municipality or school district which has elected to 25 participate under sections 8703 and 8729 (relating to 26 adoption of municipal resolutions and school district 27 petitions) shall be used to reduce the municipal real 28 property tax or the school district real property tax, 29 respectively: 30 (i) By means of an exclusion for homestead property 20010S0819B0951 - 32 -
1 pursuant to section 8583. 2 (ii) By means of a reduction in the millage rate 3 after the limit on the exclusion for homestead property 4 has been reached under section 8586. 5 (2) A municipality or school district which has elected 6 to proceed only under section 8729 shall use the sales and 7 use tax revenues received to reduce or eliminate the real 8 property tax or any taxes prohibited under section 8701(b). 9 SUBCHAPTER D 10 PERSONAL INCOME TAX 11 Sec. 12 8741. Construction. 13 8742. Local personal income tax. 14 8743. Collections. 15 8744. Rules and regulations. 16 8745. Procedure and administration. 17 8746. Credits. 18 8747. Local personal income tax exemption. 19 8748. Regulations. 20 8749. Disposition of income tax revenue. 21 § 8741. Construction. 22 The tax imposed by the governing body of a municipality or 23 school district under this subchapter shall be in addition to 24 any tax imposed by the Commonwealth under Article III of the Tax 25 Reform Code. Except for the differing provisions under sections 26 8746 (relating to credits) and 8747 (relating to local personal 27 income tax exemption), the provisions of Article III of the Tax 28 Reform Code shall apply to the tax. 29 § 8742. Local personal income tax. 30 (a) Municipalities.--In lieu of imposing the tax under 20010S0819B0951 - 33 -
1 section 8711 (relating to earned income and net profit tax), a 2 municipality shall have the power to levy, assess and collect a 3 local tax on the personal income of resident individuals of the 4 municipality up to a maximum rate of 1.5%. The local personal 5 income tax may be levied at a rate of 1.0%, 1.25% or 1.5%. 6 (b) School districts.--In lieu of imposing the tax under 7 section 8711, a school district shall have the power to levy, 8 assess and collect a local tax on personal income of resident 9 individuals of the school district up to a maximum rate of 1.5%, 10 The local personal income tax may be levied at a rate of 1.0%, 11 1.25% or 1.5%. 12 § 8743. Collections. 13 Any municipality or school district imposing a tax under 14 section 8742 (relating to local personal income tax) shall 15 designate the tax officer who is appointed under section 10 of 16 the Local Tax Enabling Act, or otherwise by law, as the 17 collector of the municipality or school district local personal 18 income tax. In the performance of the tax collection duties 19 under this subchapter, the designated tax officer shall have all 20 the same powers, rights, responsibilities and duties for the 21 collection of the taxes which may be imposed under the Local Tax 22 Enabling Act, Subchapter C of Chapter 84 (relating to local 23 taxpayers bill of rights) or as otherwise provided by law. 24 § 8744. Rules and regulations. 25 Taxes imposed under section 8742 (relating to local personal 26 income tax) are subject to the rules and regulations adopted by 27 the department pursuant to Article III of the Tax Reform Code. 28 § 8745. Procedure and administration. 29 The governing body of the municipality or school district, in 30 order to impose the tax authorized by section 8742 (relating to 20010S0819B0951 - 34 -
1 local personal income tax), shall adopt an ordinance or 2 resolution which shall refer to this subchapter. Prior to 3 adopting an ordinance or resolution imposing the tax authorized 4 by section 8742, the governing body shall give public notice of 5 its intent to adopt the ordinance in the manner provided by 6 section 4 of the Local Tax Enabling Act and shall conduct at 7 least one public hearing regarding the proposed adoption of the 8 ordinance. 9 § 8746. Credits. 10 (a) General rule.--The provisions of section 14 of the Local 11 Tax Enabling Act shall be used to determine any credits under 12 the provisions of this chapter for any taxes imposed under 13 section 8742 (relating to local personal income tax) on the 14 earned income portion of the personal income tax. 15 (b) State tax credit.--A credit against personal income tax 16 due to the Commonwealth under section 302 of the Tax Reform Code 17 shall be granted to all nonresidents of a city of the first 18 class who are subject to a tax imposed by a city of the first 19 class pursuant to the act of August 5, 1932 (Sp.Sess., P.L.45, 20 No.45), referred to as the Sterling Act. The credit shall equal 21 0.2756% of salaries, wages, commissions, compensation or other 22 income received for work done or services performed within a 23 city of the first class. The Secretary of Revenue shall 24 promulgate such regulations and forms as are necessary to 25 implement the provisions of this subsection. This section shall 26 only apply to residents of municipalities and school districts 27 which impose the tax under this subchapter. A governing body of 28 a school district in a county of the second class A shall, and a 29 governing body of a school district in a county of the third 30 class may, include in the referendum question under section 8703 20010S0819B0951 - 35 -
1 (relating to adoption of referendum) language asking whether the 2 credit against the personal income tax in this subsection should 3 be provided to the nonresident taxpayer in the city of the first 4 class or the school district in which the taxpayer resides for 5 the purpose of making additional tax reductions in the same 6 manner as section 8749 (relating to disposition of income tax 7 revenue). Should any court of competent jurisdiction determine 8 that this subsection is unconstitutional, the provisions of this 9 subsection shall be void and no credit shall be expanded or 10 extended in any way by any court. 11 § 8747. Local personal income tax exemption. 12 A municipality or school district that imposes a local 13 personal income tax under this chapter may exempt from the 14 payment of that tax any person whose total income from all 15 sources is less than $7,500. 16 § 8748. Regulations. 17 A municipality or school district may adopt regulations for 18 the processing of claims for credits and exemptions under 19 sections 8746 (relating to credits) and 8747 (relating to local 20 personal income tax exemption). 21 § 8749. Disposition of income tax revenue. 22 (a) Municipalities.--The disposition of revenue from an 23 income tax or an increase in the rate of an income tax imposed 24 by a municipality under the authority of this subchapter shall 25 occur in the following manner: 26 (1) For the fiscal year of implementation of a newly 27 imposed income tax, all revenues received by a municipality 28 shall first be used to offset any lost revenue to the 29 municipality from the taxes prohibited under section 8701(b) 30 (relating to general tax authorization) in an amount equal to 20010S0819B0951 - 36 -
1 the revenue the municipality collected from the prohibited 2 taxes in the immediately preceding fiscal year; second, to 3 provide for an increase in budgeted revenues over the 4 preceding fiscal year in accordance with the amount specified 5 in the referendum question approved by the voters under 6 section 8703 (relating to adoption of referendum); and third, 7 to reduce the municipal real property tax in the following 8 order: 9 (i) By means of an exclusion for homestead property 10 pursuant to section 8583 (relating to exclusion for 11 homestead property). 12 (ii) By means of a reduction in the millage rate 13 after the limit on the exclusion for homestead property 14 has been reached under section 8586 (relating to 15 exclusion for homestead property). 16 (2) For the fiscal year of implementation of an increase 17 in the rate of income tax, all revenues received by a 18 municipality in excess of current revenue plus the percentage 19 increase in the Statewide average weekly wage shall be used 20 to reduce the municipal real property tax in the following 21 order: 22 (i) By means of an exclusion for homestead property 23 pursuant to section 8583. 24 (ii) By means of reduction in the millage rate after 25 the limit on the exclusion for homestead property has 26 been reached under section 8586 (relating to exclusion 27 for homestead property). 28 (b) Second through fourth class school districts.--The 29 disposition of revenue from an income tax or an increase in the 30 rate of an income tax imposed by school districts of the second 20010S0819B0951 - 37 -
1 through fourth class under the authority of this subchapter 2 shall occur in the following manner: 3 (1) For the fiscal year of implementation of a newly 4 imposed income tax, all revenues received by a school 5 district of the second through fourth class shall first be 6 used to offset any lost revenue to the school district from 7 the taxes prohibited under section 8701(b) in an amount equal 8 to the revenue the school district collected from the 9 prohibited taxes in the immediately preceding fiscal year; 10 second, to provide for an increase in budgeted revenues over 11 the preceding fiscal year in accordance with the amount 12 specified in the referendum question approved by the voters 13 under section 8703; and third, to reduce the school district 14 real property tax in the following order: 15 (i) By means of an exclusion for homestead property 16 pursuant to section 8583. 17 (ii) By means of a reduction in the millage rate 18 after the limit on the exclusion for homestead property 19 has been reached under section 8586. 20 (2) For the fiscal year of implementation of an increase 21 in the rate of income tax, all revenues received by a school 22 district in excess of current revenue plus the percentage 23 increase in the Statewide average weekly wage shall be used 24 to reduce the school district of the second through fourth 25 class real property tax in the following order: 26 (i) By means of an exclusion for homestead property 27 pursuant to section 8583. 28 (ii) By means of a reduction in the millage rate 29 after the limit on the exclusion for homestead property 30 has been reached under section 8586. 20010S0819B0951 - 38 -
1 (c) School district of the first class A.--The disposition 2 of revenue from an income tax imposed by a school district of 3 the first class A under the authority of this chapter shall 4 occur as follows: for the fiscal year of implementation of a 5 newly imposed income tax, all revenues received by a school 6 district of the first class A in excess of current revenue plus 7 the percentage increase in the Statewide average weekly wage 8 shall be used first to offset any lost revenue to the school 9 district from the taxes prohibited under section 8701(b) in an 10 amount equal to the revenue the school district collected from 11 the prohibited taxes in the immediately preceding fiscal year; 12 second, to offset revenues to be paid to the school district by 13 the city of the second class pursuant to section 3173-B of the 14 act of July 28, 1953 (P.L.723, No.230), known as the Second 15 Class County Code; and third, to reduce the school district real 16 property tax in the following order: 17 (1) By means of an exclusion for homestead property 18 pursuant to section 8583. 19 (2) By means of a reduction in the millage rate after 20 the limit on the exclusion for homestead property has been 21 reached under section 8586. 22 (d) Revenue estimates of department.--The department shall 23 provide to each taxing jurisdiction that imposes an income tax 24 under this chapter an estimate of the total dollar amount of 25 revenue that the taxing jurisdiction can expect to receive from 26 an income tax for the fiscal year of implementation. The 27 department may charge the taxing jurisdiction for the actual 28 costs of calculating the requested estimates. Guidelines 29 concerning the costs shall be published in the Pennsylvania 30 Bulletin. In the event the actual dollar amount of income tax 20010S0819B0951 - 39 -
1 revenue received by a taxing jurisdiction is less than the 2 estimate of income tax revenue provided by the department, the 3 taxing jurisdiction may increase its real property tax millage 4 rate to the level necessary to offset any shortfall resulting 5 from an overestimation of income tax revenue, as certified by 6 the department, in the fiscal year of implementation. The 7 increase shall not be subject to the provisions of section 8 8704(a) (relating to public referendum requirements for 9 increasing property taxes previously reduced). 10 Section 4. Sections 8912, 8913 and 8915 of Title 53 are 11 amended to read: 12 § 8912. Register for taxes. 13 (a) General rule.--The department shall maintain an official 14 continuing register supplemented annually of all local earned 15 income and net profits, county sales and use and local personal 16 income taxes levied under Chapter 87 (relating to other subjects 17 of taxation). 18 (b) Contents of register.--The register shall list: 19 (1) The counties, municipalities and school districts 20 levying local earned income and net profits tax, county sales 21 and use tax and local personal income tax. 22 (2) The rate of tax as stated in the resolution levying 23 the tax. 24 (3) The rate on taxpayers. 25 (4) The name and address of the official responsible for 26 administering the collection of the tax and from whom 27 information, forms and copies of regulations are available. 28 § 8913. Information for register. 29 Information for the register shall be furnished by the 30 county, municipality or school district to the department as 20010S0819B0951 - 40 -
1 prescribed by the department. The information must be received
2 by the department no later than July 15 of each year to show new
3 tax enactments, repeals and changes. Failure to comply with the
4 filing date may result in the omission of the tax levy from the
5 register for that year. Failure of the department to receive
6 information of taxes continued without change may be construed
7 by the department to mean that the information contained in the
8 previous register remains in force.
9 § 8915. Effect of nonfiling.
10 Employers shall not be required by any ordinance to withhold
11 from the compensation of their employees any local earned income
12 and net profits tax or local personal income tax imposed under
13 Chapter 87 (relating to other subjects of taxation) which is not
14 listed in the register or to make reports of compensation in
15 connection with taxes not so listed. If the register is not
16 available by August 15, the register of the previous year shall
17 continue to be effective for an additional period of not more
18 than one year.
19 Section 5. This act shall take effect January 1, 2002.
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