PRIOR PRINTER'S NOS. 400, 631, 1167 PRINTER'S NO. 2325
No. 390 Session of 1999
INTRODUCED BY CORMAN, HART, JUBELIRER, MELLOW, MADIGAN,
HELFRICK, WENGER, STAPLETON, BRIGHTBILL, WAUGH, RHOADES,
ROBBINS, MUSTO, O'PAKE, MOWERY, GERLACH, WHITE, COSTA, EARLL,
HOLL, CONTI, THOMPSON, BOSCOLA, LEMMOND AND SLOCUM,
FEBRUARY 12, 1999
SENATE AMENDMENTS TO HOUSE AMENDMENTS, NOVEMBER 21, 2000
AN ACT
1 Amending the act of December 31, 1965 (P.L.1257, No.511),
2 entitled "An act empowering cities of the second class,
3 cities of the second class A, cities of the third class,
4 boroughs, towns, townships of the first class, townships of
5 the second class, school districts of the second class,
6 school districts of the third class and school districts of
7 the fourth class including independent school districts, to
8 levy, assess, collect or to provide for the levying,
9 assessment and collection of certain taxes subject to maximum
10 limitations for general revenue purposes; authorizing the
11 establishment of bureaus and the appointment and compensation
12 of officers, agencies and employes to assess and collect such
13 taxes; providing for joint collection of certain taxes,
14 prescribing-certain definitions and other provisions for
15 taxes levied and assessed upon earned income, providing for
16 annual audits and for collection of delinquent taxes, and
17 permitting and requiring penalties to be imposed and
18 enforced, including penalties for disclosure of confidential
19 information, providing an appeal from the ordinance or
20 resolution levying such taxes to the court of quarter
21 sessions and to the Supreme Court and Superior Court,"
22 further providing for the imposition of an amusement or <--
23 admissions tax on certain convention centers and for
24 limitations on rates of specific taxes; providing for special
25 limitation on rates of taxes for certain amusements; and
26 further defining "net profits."
27 The General Assembly of the Commonwealth of Pennsylvania
28 hereby enacts as follows:
1 Section 1. Section 2 of the act of December 31, 1965 <--
2 (P.L.1257, No.511), known as The Local Tax Enabling Act, is
3 amended by adding a clause to read:
4 Section 2. Delegation of Taxing Powers and Restrictions
5 Thereon.--The duly constituted authorities of the following
6 political subdivisions, cities of the second class, cities of
7 the second class A, cities of the third class, boroughs, towns,
8 townships of the first class, townships of the second class,
9 school districts of the second class, school districts of the
10 third class, and school districts of the fourth class, in all
11 cases including independent school districts, may, in their
12 discretion, by ordinance or resolution, for general revenue
13 purposes, levy, assess and collect or provide for the levying,
14 assessment and collection of such taxes as they shall determine
15 on persons, transactions, occupations, privileges, subjects and
16 personal property within the limits of such political
17 subdivisions, and upon the transfer of real property, or of any
18 interest in real property, situate within the political
19 subdivision levying and assessing the tax, regardless of where
20 the instruments making the transfers are made, executed or
21 delivered or where the actual settlements on such transfer take
22 place. The taxing authority may provide that the transferee
23 shall remain liable for any unpaid realty transfer taxes imposed
24 by virtue of this act. Each local taxing authority may, by
25 ordinance or resolution, exempt any person whose total income
26 from all sources is less than five thousand dollars ($5,000) per
27 annum from the per capita or similar head tax, occupation tax
28 and occupational privilege tax, or earned income tax, or any
29 portion thereof, and may adopt regulations for the processing of
30 claims for exemptions. Such local authorities shall not have
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1 authority by virtue of this act:
2 * * *
3 (14) To levy, assess or collect an amusement tax or an
4 admissions tax on events occurring within a facility in a county
5 of the third class that meets all of the following criteria:
6 (i) the facility is owned and operated by a governing
7 authority established under the act of May 2, 1945 (P.L.382,
8 No.164), known as the "Municipality Authorities Act of 1945";
9 (ii) the facility is publicly funded in part by the county
10 hotel tax established under the act of December 27, 1994
11 (P.L.1375, No.162), known as the "Third Class County Convention
12 Center Authority Act," as provided in section 23(e) of that act;
13 and
14 (iii) the facility is located in a township which is a
15 township of the first class on the effective date of this
16 clause, and which has a population of less than nine thousand
17 five hundred persons.
18 Section 2. Section 8 introductory paragraph, (6), (9), (10)
19 and (11) of the act, amended or added October 11, 1984 (P.L.885,
20 No.172) and July 9, 1987 (P.L.203, No.30), are amended and the
21 section is amended by adding a clause to read:
22 Section 8. Limitations on Rates of Specific Taxes.--No taxes
23 levied under the provisions of this act or 53 Pa.C.S. § 8402(c)
24 (relating to scope and limitations) shall be levied by any
25 political subdivision on the following subjects exceeding the
26 rates specified in this section:
27 * * *
28 (6) On admissions to places of amusement, athletic events
29 and the like, and on motion picture theatres in cities of the
30 second class, ten percent in cities of the second class and in
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1 all other political subdivisions the rates specified in section
2 8.1.
3 * * *
4 (9) On admissions to ski facilities, ten percent in cities
5 of the second class and in all other political subdivisions the
6 rates specified in section 8.1. The tax base upon which the tax
7 shall be levied shall not exceed forty percent of the cost of
8 the lift ticket. The lift ticket shall include all costs of
9 admissions to the ski facility.
10 (10) On admissions to golf courses, ten percent in cities of
11 the second class and in all other political subdivisions the
12 rates specified in section 8.1. The tax base upon which the tax
13 shall be levied shall not exceed forty percent of the greens
14 fee. The greens fee shall include all costs of admissions to the
15 golf course.
16 (11) On admissions to bowling alleys or bowling lanes, ten
17 percent in cities of the second class and in all other political
18 subdivisions the rates specified in section 8.1. The tax base
19 upon which the tax shall be levied shall not exceed forty
20 percent of the charge imposed upon a patron for the sale of
21 admission to or the privilege of admission to a bowling alley or
22 bowling lane to engage in one or more games of bowling.
23 (12) On admissions to automobile racing facilities, ten
24 percent in cities of the second class and in all other political
25 subdivisions the rates specified in section 8.1. The tax base
26 upon which the tax shall be levied shall not exceed forty
27 percent of the cost of admission to an automobile racing
28 facility.
29 * * *
30 Section 3. The act is amended by adding sections to read:
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1 Section 8.1. Special Limitations on Rates of Taxes for
2 Certain Amusements.--(a) (1) A municipality that levies,
3 assesses and collects an amusement or admissions tax under this
4 act and in conformity with 53 Pa.C.S. § 8402(c) (relating to
5 scope and limitations) for the activities set forth in section
6 8(6), (9), (10), (11) and (12) on or before the effective date
7 of this section may levy, assess and collect that tax at a rate
8 not to exceed four percent subject to the reduction period
9 provided for in clause (2).
10 (2) A municipality that is subject to clause (1) and that
11 collects a rate of tax in excess of the amount provided for in
12 clause (1) on the effective date of this section shall reduce
13 that rate to the rate provided for in clause (1) over a period
14 of four years beginning January 1, 2001, in equal annual
15 increments.
16 (b) A municipality that:
17 (1) does not levy, assess and collect an amusement or
18 admissions tax under this act and in conformity with 53 Pa.C.S.
19 § 8402(c) for the activities set forth in section 8(6), (9),
20 (10), (11) and (12) on or before the effective date of this
21 section; and
22 (2) enacts an ordinance to levy, assess and collect such tax
23 after the effective date of this section in accordance with law;
24 may levy, assess and collect that tax at a rate not to exceed
25 four percent.
26 (c) (1) Subject to the provisions of clauses (2) and (3), a
27 school district shall have no authority to levy an amusement or
28 admissions tax after June 30, 1997.
29 (2) A school district that levies, assesses and collects an
30 amusement or admissions tax under this act in conformity with 53
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1 Pa.C.S. § 8402(c) (relating to amusements and admissions tax),
2 on or before June 30, 1997, may levy, assess and collect that
3 tax for a period of four years from July 1, 2001, subject to the
4 reductions under clause (3) of this subsection.
5 (3) Any school district which levies, assesses and collects
6 an amusement or admissions tax under clause (2) shall phase out
7 that tax over a four-year period beginning July 1, 2001, by
8 reducing the rate of tax in equal installments.
9 (4) Nothing in this section shall be construed to authorize
10 a school district to collect an aggregate sum of amusement or
11 admissions taxes in excess of the amount collected by the school
12 district for the fiscal year ending in 1997.
13 (d) This section shall not apply to a city of the second
14 class.
15 Section 8.2. Reimbursement For Customary and Ordinary
16 Expenses.--(a) A municipality that levies an amusement or
17 admissions tax pursuant to this act may request and collect
18 reimbursement from the owner or operator of a facility under a
19 duty to collect or remit an amusement or admissions tax if the
20 cost of the customary and ordinary services that are provided by
21 the municipality and that are directly associated with the
22 operation of that facility are not offset by the amount of all
23 local taxes collected with respect to the ownership and
24 operation of that facility.
25 (b) The amount of reimbursement collected by the
26 municipality shall not exceed the cost of the customary and
27 ordinary services provided by the municipality, reduced by the
28 amount of all local taxes collected from the owner or operator
29 of the facility. The services for which the municipality may
30 collect reimbursement shall be limited to the customary and
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1 ordinary services that are directly resulting from the operation
2 of that facility within the fiscal year. The local taxes
3 collected from the owner or operator of the facility shall be
4 the taxes collected within the fiscal year by or on behalf of
5 the municipality from the owner or operator of that facility
6 with respect to the ownership and operation of that facility.
7 Prior to collecting any reimbursement, the municipality shall
8 provide to the owner or operator of the facility a list of the
9 customary and ordinary services for which reimbursement is
10 claimed, an estimate of the cost of those services and a listing
11 by type of the amount of local taxes collected with respect to
12 the ownership and operation of that facility.
13 (c) Any dispute regarding the amount of reimbursement to be
14 collected under this section shall be resolved by filing a
15 petition for adjudication in the court of common pleas in the
16 judicial district in which the facility is located.
17 Section 4. The definition of "net profits" in section 13 of
18 the act is amended to read:
19 SECTION 1. THE DEFINITION OF "NET PROFITS" IN SECTION 13 OF <--
20 THE ACT OF DECEMBER 31, 1965 (P.L.1257, NO.511), KNOWN AS THE
21 LOCAL TAX ENABLING ACT, IS AMENDED TO READ:
22 Section 13. Earned Income Taxes.--On and after the effective
23 date of this act the remaining provisions of this section shall
24 be included in or construed to be a part of each tax levied and
25 assessed upon earned income by any political subdivision levying
26 and assessing such tax pursuant to this act. The definitions
27 contained in this section shall be exclusive for any tax upon
28 earned income and net profits levied and assessed pursuant to
29 this act, and shall not be altered or changed by any political
30 subdivision levying and assessing such tax.
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1 I. Definitions
2 * * *
3 "Net profits." The net income from the operation of a
4 business, profession, or other activity, except corporations,
5 after provision for all costs and expenses incurred in the
6 conduct thereof, determined either on a cash or accrual basis in
7 accordance with the accounting system used in such business,
8 profession, or other activity, but without deduction of taxes
9 based on income. For taxpayers engaged in the business,
10 profession or activity of farming, the term shall not include:
11 (1) any interest earnings generated from any monetary
12 accounts or investment instruments of the farming business;
13 (2) any gain on the sale of farm machinery;
14 (3) any gain on the sale of livestock held twelve months or
15 more for draft, breeding or dairy purposes; and
16 (4) any gain on the sale of other capital assets of the
17 farm.
18 * * *
19 Section 5 2. The amendment of "net profits" in section 13 of <--
20 the act shall be retroactive to January 1, 1998 2000. <--
21 Section 6. This act shall apply as follows: <--
22 (1) The addition of section 2(14) of the act shall apply
23 to the tax years beginning on or after January 1, 1999.
24 (2) The amendment or addition of sections 8(6), (9),
25 (10) and (11) and 8.1 and 8.2 of the act shall apply to the
26 tax years beginning on or after January 1, 2000.
27 (3) The addition of section 8(12) of the act shall apply
28 to the tax years beginning on or after January 1, 2001.
29 (4) The amendment of "net profits" in section 13 of the
30 SECTION 3. THE AMENDMENT OF THE DEFINITION OF "NET PROFITS" <--
19990S0390B2325 - 8 -
1 IN SECTION 13 OF THE act shall apply to the tax years beginning
2 on or after January 1, 1998 2000. <--
3 Section 7 4. This act shall take effect immediately. <--
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