PRIOR PRINTER'S NO. 2456

PRINTER'S NO.  2533

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1858

Session of

2009

  

  

INTRODUCED BY STURLA, McCALL AND EACHUS, JULY 15, 2009

  

  

AS REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, AUGUST 3, 2009   

  

  

  

AN ACT

  

1

Authorizing counties to impose sales, use and occupancy taxes;

<--

2

and providing for an optional sales and use tax for first

3

class cities, for the levying, assessment and collection of

4

taxes and for the powers and duties of the Department of

5

Community and Economic Development or any successor agency,

6

the Department of Revenue and the State Treasurer.

7

TABLE OF CONTENTS

8

Chapter 1.  General Provisions

9

Section 101.  Short title.

10

Section 102.  Definitions.

11

Section 103.  Scope.

12

Section 104.  Preemption.

13

Section 105.  Rates of taxation in home rule counties.

14

Chapter 3.  Subjects of Taxation

15

Subchapter A.  Tax Authorization

16

Section 301.  General tax authorization.

17

Section 302.  Continuity of tax.

18

Section 303.  Election to participate under act.

19

Section 304.  Local tax study commission.

20

Section 305.  Municipal sales, use and occupancy tax initiative.

 


1

Subchapter B.  County Sales, Use and Occupancy Tax

2

Section 311.  Construction.

3

Section 312.  Imposition of tax.

4

Section 313.  Situs.

5

Section 314.  Licenses.

6

Section 315.  Rules and regulations; collection costs.

7

Section 316.  Procedure and administration.

8

Section 317.  County sales, use and occupancy tax funds.

9

Section 318.  Disbursements.

10

Section 319.  Adoption of municipal ordinances.

11

Section 320.  Allocations.

12

Chapter 5.  Disposition of Tax Revenues

13

Section 501.  Sales, use and occupancy tax revenues.

14

Section 502.  Municipal collaborative efforts fund.

15

Section 503.  Supplemental appropriations for collaborative

16

services.

17

Section 504.  Revenue limitation exceptions.

18

Chapter 7.  Optional Sales and Use Tax for Cities of the First

19

Class

20

Section 701.  Definitions.

21

Section 702.  Construction.

22

Section 703.  Imposition.

23

Section 704.  Situs for imposition of tax.

24

Section 705.  Licenses.

25

Section 706.  Department.

26

Section 707.  Dedication and disbursement.

27

Section 708.  Municipal action.

28

Section 709.  Expiration.

29

Chapter 21.  Miscellaneous Provisions

30

Section 2101.  (Reserved).

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1

Section 2102.  Effective date.

2

Authorizing counties to impose sales, use and occupancy taxes;

<--

3

and providing for the levying, assessment and collection of

4

taxes and for the powers and duties of the Department of

5

Community and Economic Development or any successor agency,

6

the Department of Revenue and the State Treasurer.

7

TABLE OF CONTENTS

8

Chapter 1.  General Provisions

9

Section 101.  Short title.

10

Section 102.  Definitions.

11

Section 103.  Scope.

12

Section 104.  Preemption.

13

Section 105.  Rates of taxation in home rule counties.

14

Chapter 3.  Subjects of Taxation

15

Subchapter A.  Tax Authorization

16

Section 301.  General tax authorization.

17

Section 302.  Continuity of tax.

18

Section 303.  Election to participate under act.

19

Section 304.  (Reserved).

20

Section 305.  Municipal qualification and initiative.

21

Subchapter B.  County Sales, Use and Occupancy Tax

22

Section 311.  Construction.

23

Section 312.  Imposition of tax.

24

Section 313.  Situs.

25

Section 314.  Licenses.

26

Section 315.  Rules and regulations; collection costs.

27

Section 316.  Procedure.

28

Section 317.  County sales, use and occupancy tax funds.

29

Section 318.  Disbursements.

30

Section 319.  (Reserved).

31

Section 320.  Allocations.

32

Chapter 5.  Disposition of Tax Revenues

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1

Section 501.  Sales, use and occupancy tax revenues.

2

Chapter 21.  Miscellaneous Provisions

3

Section 2101.  Effective date.

4

The General Assembly of the Commonwealth of Pennsylvania

5

hereby enacts as follows:

6

CHAPTER 1

<--

7

GENERAL PROVISIONS

8

Section 101.  Short title.

9

This act shall be known and may be cited as the County and

10

Municipal Property Tax Relief and Collaborative Services Act.

11

Section 102.  Definitions.

12

The following words and phrases when used in this act shall

13

have the meanings given to them in this section unless the

14

context clearly indicates otherwise:

15

"Board of county commissioners."  Includes the successor in

16

function to the board of county commissioners in a county which

17

has adopted a home rule charter under the provisions 53 Pa.C.S.

18

Pt. III Subpt. E (relating to home rule and optional plan

19

government), but does not include the city council of a city of

20

the first class or the county council of a county of the second

21

class.

22

"County."  A county-level municipality within this

23

Commonwealth. The term includes a county which has adopted a

24

home rule charter or optional plan of government under the

25

provisions of 53 Pa.C.S. Pt. III Subpt. E (relating to home rule

26

and optional plan government). The term does not include a

27

county of the first class or a county of the second class.

28

"Current year."  The calendar year or fiscal year for which a

29

tax is levied.

30

"Department."  The Department of Revenue of the Commonwealth.

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1

"Domicile."  As defined in section 501 of the act of December

2

31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling

3

Act.

4

"Homestead."  As defined in 53 Pa.C.S. § 8401 (relating to

5

definitions).

6

"Local Tax Enabling Act."  The act of December 31, 1965

7

(P.L.1257, No.511), known as The Local Tax Enabling Act.

8

"Municipality."  A city of the second class A, city of the

9

third class, borough, incorporated town, township of the first

10

class, township of the second class, home rule municipality,

11

optional plan municipality, optional form municipality or

12

similar general purpose unit of government which may after the

13

effective date of this section be established by statute, except

14

a city of the first class or a city of the second class. Unless

15

the context clearly indicates otherwise, for the purposes of

16

this act, a municipality located in a county shall include

17

municipalities that are located entirely or partially in the

18

county.

19

"Nonqualified municipality."  A municipality that is not a

20

qualified municipality under this act.

21

"Nonresident."  An individual domiciled outside a

22

municipality.

23

"Ordinance."  Includes a resolution.

24

"Population."  The number of individuals residing in an area

25

as determined in the most recent Federal decennial census.

26

"Preceding year."  The calendar year or fiscal year before

27

the current year. 

28

"Qualified municipality."  A municipality that qualifies in

29

accordance with section 305(b) or 319.

30

"Succeeding year."  The calendar year or fiscal year

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1

following the current year.

2

"Tax Reform Code."  The act of March 4, 1971 (P.L.6, No.2),

3

known as the Tax Reform Code of 1971.

4

"Taxpayer."  An individual required under this act to file a

5

tax return or to pay a tax.

6

Section 103.  Scope.

7

It is the intent of this act to confer upon each county the

8

power to levy, assess and collect taxes upon the subjects of

9

taxation specified in this act.

10

Section 104.  Preemption.

11

No act of the General Assembly in effect prior to or after

12

the effective date of this section shall vacate or preempt any

13

ordinance passed or adopted under the authority of this act or

14

any other act providing authority for the imposition of a tax by

15

a county, unless the act of the General Assembly expressly

16

vacates or preempts the authority to pass or adopt the

17

ordinance.

18

Section 105.  Rates of taxation in home rule counties.

19

A county which has adopted a home rule charter or optional

20

plan of government under the provisions of 53 Pa.C.S. Pt. III

21

Subpt. E (relating to home rule and optional plan government)

22

may not fix the rate of taxation for the subjects of taxation

23

authorized under Chapter 3 in excess of the rates fixed in

24

Chapter 3.

25

CHAPTER 3

26

SUBJECTS OF TAXATION

27

SUBCHAPTER A

28

TAX AUTHORIZATION

29

Section 301.  General tax authorization.

30

(a)  General rule.--Subject to section 303 and except as

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1

provided in subsection (b), a county shall have the power and

2

may by ordinance levy and assess or provide for the levying and

3

assessment of taxes on the sale or use of tangible personal

4

property and services and the occupancy of a hotel room at a

5

rate of 1% for general revenue purposes as it shall determine on

6

any or all of the subjects of taxation set forth in this act

7

within the geographical limits of the county.

8

(b)  Exclusions.--No county which levies a tax authorized by

9

this act shall have any power or authority to levy, assess or

10

collect:

11

(1)  A tax based upon a flat rate or on a millage rate on

12

an assessed valuation of a particular trade, occupation or

13

profession, commonly known as an occupation tax.

14

(2)  A per capita, poll, residence or similar head tax.

15

(3)  The intangible personal property tax under the act

16

of June 17, 1913 (P.L.507, No.335), referred to as the

17

Intangible Personal Property Tax Law.

18

Section 302.  Continuity of tax.

19

A tax levied under the provisions of this act shall continue

20

in force on a calendar year basis without annual reenactment

21

unless the tax is subsequently repealed.

22

Section 303.  Election to participate under act.

23

(a)  General rule.--A board of county commissioners which

24

elects to participate under the provisions of this act shall do

25

so by using the procedures specified in subsection (b) and in

26

accordance with the following provisions:

27

(1)  An election to participate under this act shall

28

remain in effect for a period of at least three full calendar

29

years.

30

(2)  A board of county commissioners after making an

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1

election to participate under this act may, after a period of

2

at least three full calendar years of participation, elect

3

under the provisions of subsection (c) to cease participation

4

under this act and levy, assess and collect the taxes

5

prohibited by section 301(b) to the extent otherwise provided

6

by law.

7

(b)  Ordinance.--Subject to the notice and public hearing

8

requirements of section 316(a), a board of county commissioners

9

may elect to participate under this act by adopting an ordinance

10

imposing the tax. The ordinance must be adopted no later than

11

September 1 preceding the calendar year when the tax will be

12

initially imposed.

13

(c)  Repeal.--Subject to the notice and public hearing

14

requirements of section 316(c), a board of county commissioners

15

may elect to cease participation under this act by adopting an

16

ordinance repealing the tax. The ordinance must be adopted no

17

later than September 1 preceding the calendar year when the tax

18

will be repealed.

19

Section 304.  Local tax study commission.

20

(a)  First-year implementation.--In considering whether to

21

levy, assess, collect or provide for the levy, assessment or

22

collection of any tax under this act, a board of county

23

commissioners may, by February 1 of the year preceding the

24

calendar year for which any such tax shall be levied, appoint a

25

local tax study commission in accordance with the following

26

provisions:

27

(1)  The local tax study commission shall consist of

28

five, seven or nine members appointed by the board of county

29

commissioners. One member of the local tax study commission

30

may be a member of the board of county commissioners. No

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1

member of the local tax study commission may be a relative,

2

by blood or marriage, of an official or employee of the

3

county. All members must be residents of the county.

4

Representatives on a local tax study commission should

5

reasonably reflect the socioeconomic, age and occupational

6

diversity of the county.

7

(2)  The board of county commissioners shall provide

8

necessary and reasonable staff to support the local tax study

9

commission.

10

(3)  The members of the local tax study commission shall

11

receive reimbursement only for necessary and reasonable

12

expenses in the discharge of their duties.

13

(4)  The local tax study commission shall study the

14

existing taxes levied, assessed and collected by the county

15

and determine if and how the tax policies of the county may

16

be strengthened or made more equitable by adopting for levy,

17

assessment and collection of a sales, use and occupancy tax

18

as provided for in this act. This study shall include, but

19

not be limited to, consideration of all of the following:

20

(i)  Historic rate and revenue provided by taxes

21

currently levied, assessed and collected by the county.

22

(ii)  The percentage of total revenues provided by

23

taxes currently levied, assessed and collected.

24

(iii)  The age, income, employment and property use

25

characteristics of the existing tax base.

26

(iv)  The projected revenues of any taxes currently

27

levied, assessed and collected.

28

(v)  The projected revenues of any taxes referred to

29

in this paragraph not currently levied, assessed and

30

collected by the county.

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1

(5)  Within 120 days of its appointment, the local tax

2

study commission shall make a nonbinding recommendation to

3

the board of county commissioners of the appropriate tax or

4

combination of taxes, identified in paragraph (4), to be

5

levied, assessed and collected commencing the next fiscal

6

year.

7

(6)  Upon appointment of the commission and except as

8

provided for in paragraph (8), no tax may be levied, assessed

9

or collected for the next fiscal year until receipt of the

10

recommendation of the local tax study commission.

11

(7)  No later than September 1 prior to the commencement

12

of the next fiscal year, the board of county commissioners

13

shall accept or reject the recommendation of the local tax

14

study commission or adopt any other appropriate tax or

15

combination of taxes for the county commencing the next

16

fiscal year as provided by this act and other applicable law.

17

(8)  If the local tax study commission fails to make a

18

nonbinding recommendation within 120 days of its appointment,

19

the board of county commissioners shall discharge the

20

appointed local tax study commission and appoint itself as

21

the local tax study commission. No later than September 1

22

prior to the commencement of the next fiscal year, the board

23

of county commissioners shall adopt the appropriate tax or

24

combination of taxes for the county commencing the next

25

fiscal year as provided by this act and other applicable law.

26

(9)  The local tax study commission shall publish or

27

cause to be published, within 30 days of making its

28

recommendation, a final report of its activities and

29

recommendations and shall deliver the final report to the

30

chief clerk of the county who shall supply copies to

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1

interested persons at their request.

2

(10)  Receipts are required for all reimbursable

3

expenses.

4

(11)  All the records, receipts, minutes of meetings and

5

written discussions of the local tax study commission shall,

6

upon its discharge, be turned over to the chief clerk of the

7

county for permanent safekeeping. The chief clerk shall make

8

such materials available for public inspection at any time

9

during regular business hours.

10

(12)  The local tax study commission shall be discharged

11

on the filing of its final report.

12

(b)  Effect.--A county that levies, assesses and collects or

13

provides for the levy, assessment or collection of any tax,

14

after having received the recommendations of a local tax study

15

commission and acted, shall continue to levy, assess and collect

16

the same tax or combination of taxes for a minimum of the next

17

three fiscal years.

18

(c)  Periodic review.--Beginning at least three fiscal years

19

after action by a board of county commissioners on the

20

recommendation of a tax study commission under this section, and

21

no more frequently than every three fiscal years thereafter, the

22

board of commissioners may appoint a local tax study commission

23

in the manner provided in subsection (a). The local tax study

24

commission appointed under this subsection shall be charged with

25

all of the same powers and duties provided for a local tax study

26

commission under subsection (a).

27

(d)  Construction.--Nothing in this section shall be

28

construed to preclude the board of county commissioners from

29

changing or altering the rates of any such tax or combination of

30

taxes if it deems necessary to the extent otherwise permitted by

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1

law.

2

Section 305.  Municipal sales, use and occupancy tax initiative.

3

(a)  General rule.—-After the first January 1 occurring at

4

least six months following the effective date of this section,

5

if the board of county commissioners of a county has not elected

6

to participate under this act, municipalities located in that

7

county may require, as provided in this section, the board of

8

county commissioners of the county to impose the sales, use and

9

occupancy tax as provided in section 312.

10

(b)  Procedure.--

11

(1)  If the board of county commissioners of a county has

12

not elected to participate under this act by the first

13

January 1 occurring at least six months following the

14

effective date of this section, the governing body of a

15

municipality located in that county may place before the

16

governing bodies of all the municipalities located in that

17

county the following question:

18

Do you favor the imposition of a county sales, use and

19

occupancy tax at the rate of 1% as provided in section

20

312 of the County and Municipal Property Tax Relief and

21

Collaborative Services Act?

22

(2)  Circulation of the question may begin no earlier

23

than January 1 of the year prior to the proposed year of

24

implementation, and the vote by the governing bodies of the

25

municipalities must conclude no later than June 1 of the year

26

prior to the proposed year of implementation.

27

(3)  Each governing body of a municipality voting in the

28

affirmative on the question shall certify its vote on the

29

question to the board of county commissioners. The governing

30

body of a municipality that is located in more than one

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1

county shall certify its vote on the question to the board of

2

county commissioners for each county where the municipality

3

is located.

4

(4)  The affirmative votes of the governing bodies of

5

municipalities whose combined population represents more than

6

60% of the population within the county shall be necessary

7

for the board of county commissioners to elect participation

8

under this act. The population of a municipality that is

9

located in more than one county shall be determined

10

separately for each county where the municipality is located

11

on the basis of the municipality’s population within each

12

county.

13

(5)  Upon receipt of certifications from municipalities

14

indicating approval of the question by municipalities whose

15

combined population represents more than 60% of the

16

population of the county, the board of county commissioners

17

of the county shall, for the next calendar year, elect to

18

participate under this act, pursuant to the procedures of

19

section 303.

20

(6)  A municipality is qualified to receive a

21

disbursement under section 318 if the municipality:

22

(i)  votes in the affirmative on the question under

23

this section; or

24

(ii)  qualifies in accordance with the provisions of

25

section 319.

26

SUBCHAPTER B

27

COUNTY SALES, USE AND OCCUPANCY TAX

28

Section 311.  Construction.

29

The tax imposed by the board of county commissioners under

30

this subchapter shall be in addition to any tax imposed by the

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1

Commonwealth under Article II of the Tax Reform Code. Except for

2

the differing situs provisions under section 313, the provisions

3

of Article II of the Tax Reform Code shall apply to the tax.

4

Section 312.  Imposition of tax.

5

(a)  Sales.--

6

(1)  The board of county commissioners may levy and

7

assess upon each separate sale at retail of tangible personal

8

property or services, as defined in Article II of the Tax

9

Reform Code, within the boundaries of the county, a tax on

10

the purchase price.

11

(2)  The tax shall be collected by the vendor from the

12

purchaser and shall be paid over to the Commonwealth as

13

provided in this subchapter.

14

(b)  Use.--

15

(1)  In any county within which the tax authorized in

16

subsection (a) is imposed, there shall be levied, assessed

17

and collected upon the use, within the county, of tangible

18

personal property purchased at retail and on services

19

purchased at retail, as defined in Article II of the Tax

20

Reform Code, a tax on the purchase price.

21

(2)  The tax shall be paid over to the Commonwealth by

22

the person who makes the use.

23

(3)  The use tax imposed under this subchapter shall not

24

be paid over to the Commonwealth by any person who has paid

25

the tax imposed by subsection (a) or has paid the tax imposed

26

by this subsection to the vendor with respect to the use.

27

(c)  Occupancy.--

28

(1)  In any county within which a tax authorized by

29

subsection (a) is imposed, there shall be levied, assessed

30

and collected an excise tax on the rent upon every occupancy

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1

of a room or rooms in a hotel in the county.

2

(2)  The tax shall be collected by the operator or owner

3

from the occupant and paid over to the Commonwealth.

4

(d)  Rate and uniformity.--The tax authorized by subsections

5

(a), (b) and (c) shall be imposed at a rate of 1% and shall be

6

uniform.

7

(e)  Computation.--The tax imposed under this section shall

8

be computed in the manner set forth in section 503(e)(2) of the

9

act of June 5, 1991 (P.L.9, No.6), known as the Pennsylvania

10

Intergovernmental Cooperation Authority Act for Cities of the

11

First Class.

12

Section 313.  Situs.

13

The situs of sales at retail or uses of motor vehicles,

14

aircraft, motorcraft and utility services shall be determined in

15

the manner specified by section 504 of the act of June 5, 1991

16

(P.L.9, No.6), known as the Pennsylvania Intergovernmental

17

Cooperation Authority Act for Cities of the First Class and by

18

Article II-A of the Tax Reform Code.

19

Section 314.  Licenses.

20

A license for the collection of the tax imposed by this

21

subchapter shall be issued in the same manner as is provided for

22

in section 505 of the act of June 5, 1991 (P.L.9, No.6), known

23

as the Pennsylvania Intergovernmental Cooperation Authority Act

24

for Cities of the First Class. Licensees shall be entitled to

25

the same discount as provided in section 227 of the Tax Reform

26

Code.

27

Section 315.  Rules and regulations; collection costs.

28

(a)  Regulations.--Rules and regulations shall be applicable

29

to the taxes imposed under section 312 in the same manner as is

30

provided for in section 506(1) and (2) of the act of June 5,

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1

1991 (P.L.9, No.6), known as the Pennsylvania Intergovernmental

2

Cooperation Authority Act for Cities of the First Class.

3

(b)  Administrative costs.--

4

(1)  The department may retain a sum equal to 1% of the

5

revenues collected under this subchapter for its

6

administrative costs.

7

(2)  When the annual operating budget for the department

8

is submitted to the General Assembly, the department shall

9

also submit to the chairman and minority chairman of the

10

Appropriations Committee of the Senate and to the chairman

11

and minority chairman of the Appropriations Committee of the

12

House of Representatives the actual sums retained for costs

13

of collection in the preceding fiscal year, together with all

14

supporting details.

15

Section 316.  Procedure and administration.

16

(a)  Ordinance.--

17

(1)  A county desiring to impose the tax authorized by

18

section 312 shall give at least 60 days' written notice to

19

each municipality in the county of its intent to impose the

20

tax and shall adopt an ordinance after the expiration of 60

21

days after the date of the notice. The notice and ordinance

22

shall state the tax rate and refer to this subchapter. The

23

ordinance shall authorize the imposition of the tax on all

24

subjects provided for in section 312.

25

(2)  Prior to adopting an ordinance imposing the tax

26

under section 312, the board of county commissioners shall

27

give public notice of its intent to adopt the ordinance in

28

the manner provided by section 306 of the Local Tax Enabling

29

Act and shall conduct at least one public hearing regarding

30

the proposed adoption of the ordinance.

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1

(3)  The board of county commissioners may waive the

2

requirement for a public hearing if the ordinance will be

3

adopted pursuant to the provisions of section 305.

4

(b)  Notification to department.--A certified copy of the

5

county ordinance shall be delivered to the department by

6

September 1 of the year prior to the effective date of the

7

ordinance. The county ordinance shall become effective on the

8

January 1 following delivery of the certified copy to the

9

department.

10

(c)  Repeal.--

11

(1)  A county, having enacted the tax authorized by

12

section 312 and desiring to repeal the tax, shall give at

13

least 60 days' written notice to every municipality located

14

in the county of its intent to repeal the tax and shall adopt

15

an ordinance after the expiration of 60 days after the date

16

of the notice. The ordinance shall authorize the repeal of

17

the tax on all subject under section 312.

18

(2)  Prior to adopting an ordinance repealing the tax

19

imposed under section 312, the board of county commissioners

20

shall give public notice of its intent to repeal the

21

ordinance in the manner provided by section 506 of the Local

22

Tax Enabling Act and shall conduct at least one public

23

hearing regarding the proposed repeal of the ordinance.

24

(d)  Delivery of repeal ordinance.--The board of county

25

commissioners shall deliver a certified copy of a repeal

26

ordinance to the department by September 1 of the year prior to

27

the effective date of the repeal.

28

Section 317.  County sales, use and occupancy tax funds.

29

(a)  Funds established in State Treasury.--There is hereby

30

established in the State Treasury for each county imposing the

- 17 -

 


1

tax under section 312 a county sales, use and occupancy tax fund

2

in the name of each county. The State Treasurer shall be

3

custodian of the funds which shall be subject to the provisions

4

of law applicable to funds listed in section 302 of the act of

5

April 9, 1929 (P.L.343, No.176), known as The Fiscal Code.

6

(b)  Deposits into funds.--

7

(1)  The tax imposed under section 312 shall be received

8

by the department and paid to the State Treasurer and, along

9

with interest and penalties, less any collection costs

10

allowed under this subchapter and any refunds and credits

11

paid, shall be credited to the respective fund not less

12

frequently than every two weeks.

13

(2)  During any period prior to the credit of moneys to

14

each such fund, interest earned on moneys received by the

15

department and paid to the State Treasurer under this

16

subchapter shall be deposited into the respective fund. 

17

(c)  Lapsing and interfund transfers prohibited.--All moneys

18

in each respective fund, including, but not limited to, moneys

19

credited to the fund under this section, prior year encumbrances

20

and the interest earned thereon, shall not lapse or be

21

transferred to any other fund, but shall remain in the

22

respective fund.

23

(d)  Investment.--Pending their disbursement, moneys received

24

on behalf of or deposited into each respective fund shall be

25

invested or reinvested as are other moneys in the custody of the

26

State Treasurer in the manner provided by law. All earnings

27

received from the investment or reinvestment of the moneys shall

28

be credited to the respective fund.

29

Section 318.  Disbursements.

30

(a)  General rule.--On or before the tenth day of every

- 18 -

 


1

month, the State Treasurer shall make disbursements as provided

2

in this section.

3

(b)  Disbursement to counties.--

4

(1)  The State Treasurer shall disburse to a county

5

imposing the tax under section 312 an amount of money equal

6

to 50% of the tax deposited in the respective county sales,

7

use and occupancy tax fund for deposit into the county

8

general fund for disposition as provided under section

9

501(a).

10

(2)  The State Treasurer shall disburse to a county, in

11

addition to its share under paragraph (1), an amount of money

12

equal to the amount allocated to all of the nonqualified

13

municipalities as provided in this section.

14

(c)  Allocation to municipalities.--The State Treasurer shall

15

allocate to the municipalities located in the county an amount

16

of money equal to 40% of the tax deposited in the respective

17

county sales, use and occupancy tax fund, which shall be

18

apportioned to all of the municipalities located in that county

19

as computed under section 320(a).

20

(d)  Disbursement to municipalities.--

21

(1)  The amount apportioned to each qualified

22

municipality shall be disbursed to the qualified municipality

23

for deposit into the municipal general fund for disposition

24

as provided in section 501(b).

25

(2)  The amount apportioned to each nonqualified

26

municipality shall be disbursed to the county as provided in

27

subsection (b)(2) for deposit into the county general fund

28

for disposition as provided under section 501(a).

29

(e)  Disbursement to municipal collaborative efforts fund.--

30

The State Treasurer shall disburse to the municipal

- 19 -

 


1

collaborative efforts fund established by the county under

2

section 502 an amount of money equal to 10% of the tax deposited

3

in the respective county sales, use and occupancy tax fund.

4

(f)  Penalty.--If disbursements are not made on or before the

5

tenth day of each month, a 5% penalty shall be added thereto

6

plus an additional 1% late charge per month delayed, along with

7

interest and penalties accruing under section 317. Payment of

8

penalties and late charges under this subsection shall be made

9

from the General Fund of the Commonwealth into the county sales,

10

use and occupancy tax fund established under section 317.

11

Section 319.  Adoption of municipal ordinances.

12

(a)  Initial year qualification.--A municipality is qualified

13

to receive a disbursement under section 318 if, prior to

14

enactment of the county ordinance, the municipality:

15

(1)  Adopts a municipal ordinance containing the

16

statement:

17

We strongly urge the county to enact a county sales, use

18

and occupancy tax and intend to accept disbursements of

19

the sales, use and occupancy tax collected.

20

(2)  Delivers a certified copy of the municipal ordinance

21

to the board of county commissioners on or before the

22

enactment of the county ordinance. A municipality that is

23

located in more than one county shall deliver a certified

24

copy to the board of county commissioners for each county

25

where the municipality is located.

26

(b)  Subsequent year qualification.--A municipality is

27

qualified to receive a disbursement under section 318 if, prior

28

to October 1 of any year after the year of initial imposition of

29

the tax by a county, the municipality meets the following

30

requirements:

- 20 -

 


1

(1)  Adopts a municipal ordinance containing the

2

statement:

3

We support the enactment by the county of the county

4

sales, use and occupancy tax and strongly urge its

5

continuation and intend to accept disbursements of the

6

sales, use and occupancy tax collected.

7

(2)  Delivers a certified copy of the municipal ordinance

8

to the board of county commissioners on or before the

9

enactment of the county ordinance by October 15 of the year

10

in which the ordinance is enacted. A municipality that is

11

located in more than one county shall deliver a certified

12

copy to the board of county commissioners for each county

13

where the municipality is located.

14

(c)  Nonqualification.--Notwithstanding the provisions of

15

subsection (b), a municipality shall not qualify to receive a

16

disbursement under section 318 earlier than 36 months after the

17

initial date of imposition of the tax unless the municipality:

18

(1)  enacts an ordinance in accordance with the

19

provisions of subsection (a); or

20

(2)  votes in the affirmative to the question in

21

accordance with the provisions of section 305.

22

Section 320.  Allocations.

23

(a)  Allocations to municipalities.--The State Treasurer

24

shall compute allocations to municipalities in the following

25

manner:

26

(1)  Fifty percent of the money allocated to

27

municipalities in the county shall be distributed pro rata

28

based on the weighted tax revenues for each municipality

29

located in the county as a percentage of the total weighted

30

tax revenues of all municipalities located in the county. For

- 21 -

 


1

municipalities located in more than one county, the weighted

2

tax revenues for the county shall be prorated based upon the

3

population of the municipality in each county divided by the

4

total population of the municipality.

5

(2)  Fifty percent of the money allocated to

6

municipalities in the county shall be distributed pro rata

7

based on the population of each municipality located in the

8

county as a percentage of the sum of the population of all

9

municipalities located in the county. For municipalities

10

located in more than one county, the population of the county

11

shall be determined separately for each county where the

12

municipality is located on the basis of the municipality’s

13

population within each county.

14

(b)  Calculation of weighted tax revenues.--Calculations of

15

weighted tax revenues shall be made by the Department of

16

Community and Economic Development or any successor agency and

17

certified to the State Treasurer based upon information reported

18

to the Department of Community and Economic Development or any

19

successor agency, subject to review, verification and approval

20

by the Department of Community and Economic Development or any

21

successor agency.

22

(c)  Definitions.--As used in this section, the following

23

words and phrases shall have the meanings given to them in this

24

subsection:

25

"Per capita market value."  The total market value of all

26

real property divided by population as determined by the most

27

recent decennial census.

28

"Total tax revenues."  Real property tax revenues, revenues

29

received by levy of a tax under the Local Tax Enabling Act,

30

revenues received by levy of a tax under this act and revenues

- 22 -

 


1

received by levy of a tax under the act of August 9, 1955

2

(P.L.323, No.130), known as The County Code, the act of June 23,

3

1931 (P.L.932, No.317), known as The Third Class City Code, the

4

act of February 1, 1966 (1965 P.L.1656, No.581), known as The

5

Borough Code, the act of June 24, 1931 (P.L.1206, No.331), known

6

as the First Class Township Code, and the act of May 1, 1933

7

(P.L.103, No.69), known as The Second Class Township Code, as

8

applicable to the municipality.

9

"Weighted tax revenues."  Total tax revenues from all sources

10

of a municipality divided by the per capita market value of the

11

municipality.

12

CHAPTER 5

13

DISPOSITION OF TAX REVENUES

14

Section 501.  Sales, use and occupancy tax revenues.

15

(a)  Counties.--

16

(1)  In the first year of implementation of the tax under

17

section 312, no less than 60% of any additional revenues

18

received by a county from the tax shall be used to offset the

19

revenues lost as a result of the prohibition against

20

imposition of the taxes enumerated in section 301(b) and then

21

to reduce the county real property tax, first by means of a

22

homestead exclusion and then, if the maximum homestead

23

exclusion has been attained, by means of reduction in the

24

property tax millage rate.

25

(2)  Revenues received and retained by a county from the

26

tax under section 312 shall be expended for public purposes

27

authorized by statutes governing counties.

28

(b)  Municipalities.--

29

(1)  In the first year of implementation of the taxes

30

under section 312, no less than 60% of any additional

- 23 -

 


1

revenues received by a qualified municipality from the tax

2

shall be used for the following, separately or in

3

combination:

4

(i)  To offset the municipal real property tax, first

5

by means of a homestead exclusion and then, if the

6

maximum homestead exclusion has been attained, by means

7

of reduction in the property tax millage rate.

8

(ii)  To offset lost municipal revenue based on the

9

value of real property in the municipality that has been

10

exempted from real property taxation pursuant to law.

11

(2)  If, in the first year of implementation, 60% of the

12

amount of revenues received by a qualified municipality

13

exceeds the sum of the amount of offsets available under

14

paragraph (1) for that year, then that excess revenue shall

15

be used for the following, separately or in combination:

16

(i)  To offset any other municipal tax or fee.

17

(ii)  To make a supplemental appropriation in

18

accordance with section 503.

19

(3)  Revenues received and retained by a qualified

20

municipality from the taxes under section 312 shall be

21

expended for public purposes of health, safety and welfare as

22

provided in the municipality’s governing statutes.

23

Section 502.  Municipal collaborative efforts program.

24

(a)  Fund established.--There is hereby established in each

25

county levying the tax under section 312 a municipal

26

collaborative efforts fund.

27

(b)  Deposits.--Payments received under section 318(e) shall

28

be deposited in the municipal collaborative efforts fund of the

29

county for use as specified in this section.

30

(c)  Municipal collaborative efforts board.--

- 24 -

 


1

(1)  Upon levy of the taxes under section 312 by a

2

county, a municipal collaborative efforts board will be

3

established within the county.

4

(2)  The municipal collaborative efforts board shall

5

award grants for the provision of municipal collaborative

6

efforts within the county that meet criteria established by

7

the municipal collaborative efforts board.

8

(3)  All of the members of the municipal collaborative

9

efforts board must be elected officials from qualified

10

municipalities in the county.

11

(4)  The municipal collaborative efforts board shall be

12

comprised of no fewer than three voting members and one

13

nonvoting member, and no more than seven voting members and

14

one nonvoting member. The municipal collaborative efforts

15

board shall include at least one representative from each

16

class of municipality located in the county; provided that

17

the class of municipality consists of at least one qualified

18

municipality. The number of representatives from each class

19

of municipality located in the county shall be in reasonable

20

proportion to the number of municipalities within each class

21

of municipality in the county.

22

(5)  The board of county commissioners shall appoint

23

members to the municipal collaborative efforts board from

24

nominations made by resolution of the qualified

25

municipalities in the county. Prior to appointment, the board

26

of county commissioners shall submit the nominees to councils

27

of governments and county associations of municipalities

28

existing in the county, if any, for review and comment.

29

(6)  Members shall serve a two-year term and may be

30

nominated for successive terms. Vacancies shall be filled by

- 25 -

 


1

the board of county commissioners for the balance of the

2

unexpired term, and any appointment made shall be from the

3

same class of qualified municipality. Initial appointments

4

shall be made within 60 days of a county levying the taxes

5

under section 312, and vacancies shall be filled within 60

6

days of their occurrence from nominees submitted by

7

municipalities of the class for which the vacancy exists.

8

(7)  Within 30 days of appointment, and on the first

9

Monday after the first day of January of each year following,

10

the municipal collaborative efforts board shall organize.

11

(8)  No more than 10% of the annual payments received

12

under section 318(e) may be used by the municipal

13

collaborative efforts board for administrative purposes.

14

(9)  The municipal collaborative efforts board shall

15

adopt standard rules of parliamentary procedure and shall

16

adopt such other rules and regulations necessary for conduct

17

of the business of the municipal collaborative efforts board.

18

The Department of Community and Economic Development shall

19

develop sample rules and regulations and other guidance

20

materials.

21

(d)  Disbursements.--

22

(1)  Disbursement of funds shall be made to one or more

23

qualified municipalities or groups of qualified

24

municipalities organized under 53 Pa.C.S. Ch. 23 Subch. A

25

(relating to intergovernmental cooperation) or operating

26

under other contractual agreement, for the purpose of

27

providing municipal collaborative efforts.

28

(2)  Nonqualified municipalities shall be ineligible for

29

funds under this section unless the funding is pursuant to an

30

agreement under 53 Pa.C.S. Ch. 23 Subch. A in which the

- 26 -

 


1

majority of participating municipalities are qualified

2

municipalities or pursuant to other contractual agreement in

3

which the majority of participating municipalities are

4

qualified municipalities.

5

(e)  Audit.--Following the close of the fiscal year, the

6

municipal collaborative efforts board shall provide for an

7

examination of its financial records and the financial records

8

of its fund by a certified public accountant in accordance with

9

generally accepted government auditing standards. The municipal

10

collaborative efforts board may require any recipient of funds

11

under this section to provide to the municipal collaborative

12

efforts board an audit of the use of those funds in accordance

13

with generally accepted government auditing standards.

14

(f)  Definition.--For the purposes of this section, the term

15

"qualified municipality" shall have the same meaning given in

16

section 102, except that for municipal collaborative efforts

17

provided by agreement for municipalities in more than one

18

county, the term shall include municipalities qualified in

19

another county.

20

Section 503.  Supplemental appropriations for collaborative

21

services.

22

A county or municipality may appropriate and transfer by

23

contract a portion of its receipts of disbursements under this

24

act to one or more other counties or municipalities or groups of

25

municipalities organized under 53 Pa.C.S. Ch. 23 Subch. A

26

(relating to intergovernmental cooperation), for the purpose of

27

providing governmental services on behalf of that county or

28

municipality.

29

Section 504.  Revenue limitation exceptions.

30

(a)  Waiver.--A board of county commissioners or the

- 27 -

 


1

governing body of a municipality may waive the limitations

2

relating to the reduction or elimination of taxes in sections

3

501, but only to the degree necessary, in the following cases:

4

(1)  If an increase in local expenditures is necessary to

5

respond to or recover from an emergency or disaster declared

6

by the Governor.

7

(2)  If the political subdivision is required to

8

implement a court decision.

9

(3)  To pay interest and principal on any indebtedness

10

incurred under the provisions of 53 Pa.C.S. Pt. VII Subpt. B

11

(relating to indebtedness and borrowing).

12

(4)  To pay increases in pension fund requirements which

13

are in excess of the annual average increase over the

14

immediately preceding five fiscal years.

15

(5)  To respond to a county or municipality declared to

16

be distressed under the act of July 10, 1987 (P.L.246,

17

No.47), known as the Municipalities Financial Recovery Act.

18

(6)  To increase revenues when actual revenues decline

19

from the immediately preceding year, but only to the extent

20

of the revenue decline.

21

(7)  If the increase does not exceed the limitations on

22

millage rates for real property under the act of August 9,

23

1955 (P.L.323, No.130), known as The County Code, the act of

24

June 23, 1931 (P.L.932, No.317), known as The Third Class

25

City Code, the act of February 1, 1966 (1965 P.L.1656,

26

No.581), known as The Borough Code, the act of June 24, 1931

27

(P.L.1206, No.331), known as the First Class Township Code,

28

and the act of May 1, 1933 (P.L.103, No.69), known as The

29

Second Class Township Code.

30

(8)  (i)  To respond to a Federal or State statute,

- 28 -

 


1

regulation or order adding to or significantly altering

2

responsibilities and duties or requiring expenditure of

3

funds to the extent not funded by the Federal Government

4

or State government.

5

(ii)  This paragraph shall apply only to a Federal or

6

State statute, regulation or order taking effect after

7

the effective date of this section.

8

(9)  To increase revenue equal to the percentage increase

9

in the Statewide average weekly wage from the immediately

10

preceding year or 5%, whichever is less.

11

(b)  Appeal.--

12

(1)  A person aggrieved by a waiver of limitations

13

pursuant to this section may appeal to the court of common

14

pleas in the judicial district in which the county or

15

municipality is located.

16

(2)  The following shall apply to any proceedings

17

instituted under this subsection:

18

(i)  The county or municipality that is subject of

19

the appeal must show by clear and convincing evidence the

20

necessity to claim the waiver of limitations.

21

(ii)  The county or municipality must show by clear

22

and convincing evidence that there are no assets or other

23

feasible alternatives available to the county or

24

municipality.

25

(iii)  A person shall have standing as a party to a

26

proceeding under this subsection as long as the person

27

resides within or pays real property taxes to the taxing

28

jurisdiction of the county or municipality that is

29

subject of the appeal.

30

CHAPTER 7

- 29 -

 


1

OPTIONAL SALES AND USE TAX FOR CITIES OF THE FIRST CLASS

2

Section 701.  Definitions.

3

(a)  Article II of Tax Reform Code.--The definitions in

4

section 201 of the act of March 4, 1971 (P.L.6, No.2), known as

5

the Tax Reform Code of 1971, apply to this chapter.

6

(b)  Specific.--The following words and phrases when used in

7

this chapter shall have the meanings given to them in this

8

subsection unless the context clearly indicates otherwise:

9

"City."  A city of the first class.

10

"Fund."  The Local Sales and Use Tax Fund.

11

Section 702.  Construction.

12

(a)  Additional tax.--The tax imposed by a city under this

13

chapter shall be in addition to any tax imposed:

14

(1)  by the Commonwealth under Article II of the act of

15

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

16

1971; or

17

(2)  by a city under the act of June 5, 1991 (P.L.9,

18

No.6), known as the Pennsylvania Intergovernmental

19

Cooperation Authority Act for Cities of the First Class.

20

(b)  Article II of Tax Reform Code.--Except for the differing

21

situs provisions under section 704, section 202-A and Article II

22

of the Tax Reform Code of 1971 applies to this chapter.

23

Section 703.  Imposition.

24

(a)  Sales.--

25

(1)  The governing body of a city may levy, assess and

26

collect, upon each separate sale at retail of tangible

27

personal property or services within the city, a tax on the

28

purchase price.

29

(2)  The tax shall be collected by the vendor from the

30

purchaser and shall be paid over to the Commonwealth as

- 30 -

 


1

provided in this chapter.

2

(b)  Use.--

3

(1)  If a city imposes the tax under subsection (a), the

4

governing body of the city shall levy, assess and collect,

5

upon the use within the city of tangible personal property

6

purchased at retail and of services purchased at retail, a

7

tax on the purchase price.

8

(2)  Except as set forth in paragraph (3), the tax shall

9

be paid over to the Commonwealth by the person that makes the

10

use.

11

(3)  The tax shall not be paid over to the Commonwealth

12

by a person that, with respect to the same taxable subject:

13

(i)  has paid the tax under subsection (a); or

14

(ii)  has paid the tax imposed by this subsection to

15

the vendor.

16

(c)  Rate and uniformity.--The rate of the tax authorized by

17

this section shall be 1%.

18

(d)  Computation.--The tax under this section shall be

19

computed as follows:

20

(1)  If the purchase price is 50¢ or less, no tax shall

21

be collected.

22

(2)  If the purchase price is 51¢ or more but less than

23

$1.51, 1¢ shall be collected.

24

(3)  If the purchase price is $1.51 or more but less than

25

$2.51, 2¢ shall be collected.

26

(4)  If the purchase price is $2.51 or more but less than

27

$3.51, 3¢ shall be collected.

28

(5)  If the purchase price is $3.51 or more but less than

29

$4.51, 4¢ shall be collected.

30

(6)  If the purchase price is $4.51 or more but less than

- 31 -

 


1

$5.51, 5¢ shall be collected.

2

(7)  If the purchase price is $5.51 or more but less than

3

$6.51, 6¢ shall be collected.

4

(8)  If the purchase price is $6.51 or more but less than

5

$7.51, 7¢ shall be collected.

6

(9)  If the purchase price is $7.51 or more but less than

7

$8.51, 8¢ shall be collected.

8

(10)  If the purchase price is $8.51 or more but less

9

than $9.51, 9¢ shall be collected.

10

(11)  If the purchase price is $9.51 or more but less

11

than $10.01, 10¢ shall be collected.

12

(12)  If the purchase price is more than $10, 1% of each

13

$10 purchase price plus the above bracket charges upon any

14

fractional part of a $10 increment shall be collected.

15

Section 704.  Situs for imposition of tax.

16

(a)  Situs for retail sales.--Except as otherwise set forth

17

in this section, a sale at retail shall be deemed to be

18

consummated at the place of business of the retailer. If a

19

retailer has more than one place of business in this

20

Commonwealth which participates in the sale, the sale shall be

21

deemed to be consummated at the place of business of the

22

retailer where the initial order for the tangible personal

23

property is taken, even though the order must be forwarded

24

elsewhere for acceptance, approval of credit, shipment or

25

billing. A sale by a retailer's employee shall be deemed to be

26

consummated at the place of business from which that employee

27

works.

28

(b)  Out-of-State delivery.--Subsection (a) does not apply if

29

the tangible personal property sold is delivered by the retailer

30

to:

- 32 -

 


1

(1)  an out-of-State destination;

2

(2)  a common carrier for delivery to an out-of-State

3

destination; or

4

(3)  the United States Post Office for delivery to an

5

out-of-State destination.

6

(c)  Situs for vehicle, aircraft and motorcraft sales.--

7

(1)  This subsection applies to all of the following:

8

(i)  A mobile home, motor vehicle, semitrailer or

9

trailer, as defined in 75 Pa.C.S. § 102 (relating to

10

definitions).

11

(ii)  Any aircraft, motorboat or similar item of

12

tangible personal property required under either Federal

13

or state law to be registered or licensed.

14

(2)  The sale at retail or use of an item listed in

15

paragraph (1) shall be deemed to have been completed or used

16

at the address of the purchaser or user.

17

(3)  The tax due on an item listed in paragraph (1) shall

18

be paid by the purchaser or user:

19

(i)  to the Department of Transportation at the time

20

of making application for the issuance of a certificate

21

of title; or

22

(ii)  if licensing by the Department of

23

Transportation is not required or obtained, to the

24

department.

25

(d)  Situs for utility services.--

26

(1)  The sale or use of steam, natural and manufactured

27

gas and electricity shall be deemed to occur at the service

28

address in the city where the meter which registers the

29

service is located, without regard to where the services are

30

rendered.

- 33 -

 


1

(2)  The sale or use of telephone service shall be deemed

2

to occur at the address where the telephone equipment is

3

located and to which the telephone number is assigned.

4

(3)  The sale or use of telegraph services shall be

5

deemed to occur where the telegraph originated.

6

Section 705.  Licenses.

7

(a)  Issuance and renewal.--

8

(1)  The license issued under Article II of act of March

9

4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,

10

or a separate license may be issued by the department for the

11

collection and reporting of the taxes imposed by section 703.

12

(2)  The license is subject to renewal periodically as

13

required by the department in regulations but in no event

14

more frequently than once within a five-year period.

15

(3)  No fee shall be charged for either a license or any

16

renewal.

17

(b)  Assignment.--The license shall be nonassignable.

18

(c)  Liability.--Failure of a person to obtain a license

19

shall not relieve the person of liability to pay the taxes

20

imposed by this chapter.

21

Section 706.  Department.

22

(a)  Administration.--The department has the following powers

23

and duties to administer this chapter:

24

(1)  Promulgate regulations.

25

(2)  Enforce this chapter and regulations under this

26

chapter and subsection (b).

27

(b)  Existing regulations.--The regulations promulgated under

28

section 270 of the act of March 4, 1971 (P.L.6, No.2), known as

29

the Tax Reform Code of 1971, shall be applicable to the taxes

30

imposed by section 703 insofar as the regulations are consistent

- 34 -

 


1

with section 703.

2

(c)  Administrative costs.--The department shall use the

3

money to cover cost of administration of the tax under Chapter 5

4

of the act of June 5, 1991 (P.L.9, No.6), known as the

5

Pennsylvania Intergovernmental Cooperation Authority Act for

6

Cities of the First Class, to cover the cost of administration

7

of the tax authorized by this chapter; and the department shall

8

not retain any additional amounts for the costs of collection of

9

the tax authorized by this chapter.

10

Section 707.  Dedication and disbursement.

11

(a)  Fund.--

12

(1)  At least every two weeks, the department shall pay

13

to the State Treasurer the money from the tax, interest and

14

penalties, minus refunds and credits, under this chapter.

15

(2)  The State Treasurer shall credit the money under

16

paragraph (1) to the fund. During any period prior to the

17

credit of money, interest earned on money shall be deposited

18

into the fund.

19

(3)  Money in the fund under paragraph (2) shall be the

20

property of the city and shall be distributed as provided in

21

this section.

22

(4)  Pending disbursement to the city, money in the fund

23

under paragraph (2) shall be invested as is other money in

24

the custody of the State Treasurer in the manner provided by

25

law. All earnings received from the investment or deposit of

26

the money shall be credited to the fund.

27

(5)  Money in the fund under paragraph (2):

28

(i)  shall not lapse at the end of any fiscal year;

29

(ii)  shall not be transferred to any other fund; and

30

(iii)  shall be used exclusively as provided in this

- 35 -

 


1

section.

2

(b)  Disbursement.--By the 10th day of the month, the State

3

Treasurer shall disburse to the city the total amount of money

4

which is, as of the last day of the previous month, contained in

5

the fund under subsection (a)(2).

6

Section 708.  Municipal action.

7

(a)  Adoption of ordinance.--If a city desires to impose the

8

tax under section 703, the governing body of the city must adopt

9

an ordinance stating the tax rate. The effective date of the

10

ordinance must be:

11

(1)  at least 30 days after adoption; and

12

(2)  on the first day of a month.

13

(b)  Notification to department.--A certified copy of a city

14

ordinance imposing the tax authorized by section 703 shall be

15

delivered to the department within ten days after the adoption

16

of the ordinance.

17

(c)  Copy of repeal ordinance.--A certified copy of a repeal

18

ordinance shall be delivered to the department at least 30 days

19

prior to the effective date of the repeal.

20

Section 709.  Expiration.

21

This chapter shall expire July 1, 2014. Notwithstanding the

22

expiration of this chapter, tax imposed under section 703 on

23

sales or uses occurring before July 1, 2014, shall be subject to

24

section 707.

25

CHAPTER 21

26

MISCELLANEOUS PROVISIONS

27

Section 2101.  (Reserved).

28

Section 2102.  Effective date.

29

This act shall take effect immediately.

30

CHAPTER 1

<--

- 36 -

 


1

GENERAL PROVISIONS

2

Section 101.  Short title.

3

This act shall be known and may be cited as the County and

4

Municipal Property Tax Relief Act.

5

Section 102.  Definitions.

6

The following words and phrases when used in this act shall

7

have the meanings given to them in this section unless the

8

context clearly indicates otherwise:

9

"Board of county commissioners."  Includes the successor in

10

function to the board of county commissioners in a county which

11

has adopted a home rule charter under the provisions 53 Pa.C.S.

12

Pt. III Subpt. E (relating to home rule and optional plan

13

government), but does not include the city council of a city of

14

the first class or the county council of a county of the second

15

class.

16

"County."  A county-level municipality within this

17

Commonwealth. The term includes a county which has adopted a

18

home rule charter or optional plan of government under the

19

provisions of 53 Pa.C.S. Pt. III Subpt. E (relating to home rule

20

and optional plan government). The term does not include a

21

county of the first class or a county of the second class.

22

"Department."  The Department of Revenue of the Commonwealth.

23

"Fund."  The County Sales, Use and Occupancy Tax Fund.

24

"Homestead."  As defined in 53 Pa.C.S. § 8401 (relating to

25

definitions).

26

"Local Tax Enabling Act."  The act of December 31, 1965

27

(P.L.1257, No.511), known as The Local Tax Enabling Act.

28

"Municipality."  A city of the second class A, city of the

29

third class, borough, incorporated town, township of the first

30

class, township of the second class, home rule municipality,

- 37 -

 


1

optional plan municipality, optional form municipality or

2

similar general purpose unit of government which may after the

3

effective date of this section be established by statute. Unless

4

the context clearly indicates otherwise, for the purposes of

5

this act, a municipality located in a county shall include

6

municipalities that are located entirely or partially in the

7

county. The term shall not include a city of the first class, a

8

city of the second class or a municipality located in a county

9

of the second class.

10

"Nonqualified municipality."  A municipality that is not

11

qualified under section 305 to receive disbursements under

12

section 318.

13

"PICAA."  The act of June 5, 1991 (P.L.9, No.6), known as the

14

Pennsylvania Intergovernmental Cooperation Authority Act for

15

Cities of the First Class.

16

"Population."  The number of individuals residing in an area

17

as determined in the most recent Federal decennial census.

18

"Qualified municipality."  A municipality that is qualified

19

under section 305 to receive disbursements under section 318.

20

"Tax exempt real property."  Real property that is exempt

21

from the payment of local real property taxes and owned by one

22

of the following:

23

(1)  The Federal Government or an instrumentality of the

24

Federal Government.

25

(2)  The Commonwealth or an instrumentality of the

26

Commonwealth.

27

(3)  A political subdivision other than the municipality

28

in which the property is located.

29

(4)  An entity that has been granted exemption from real

30

property taxation pursuant to the authority vested in the

- 38 -

 


1

General Assembly under section 2(a)(i), (ii), (iv) or (v) of

2

Article VIII of the Constitution of Pennsylvania.

3

(5)  A local authority as defined in 1 Pa.C.S. § 1991

4

(relating to definitions).

5

"Tax Reform Code."  The act of March 4, 1971 (P.L.6, No.2),

6

known as the Tax Reform Code of 1971.

7

Section 103.  Scope.

8

It is the intent of this act to confer upon each county the

9

power to levy, assess and collect taxes upon the subjects of

10

taxation specified in this act.

11

Section 104.  Preemption.

12

No act of the General Assembly in effect prior to or after

13

the effective date of this section shall be deemed to vacate or

14

preempt any ordinance passed or adopted under the authority of

15

this act or any other act providing authority for the imposition

16

of a tax by a county, unless the act of the General Assembly

17

expressly vacates or preempts the authority to pass or adopt the

18

ordinance.

19

Section 105.  Rates of taxation in home rule counties.

20

A county which has adopted a home rule charter or optional

21

plan of government under the provisions of 53 Pa.C.S. Pt. III

22

Subpt. E (relating to home rule and optional plan government)

23

may not fix the rate of taxation for the subjects of taxation

24

authorized under Chapter 3 in excess of the rates fixed in

25

Chapter 3.

26

CHAPTER 3

27

SUBJECTS OF TAXATION

28

SUBCHAPTER A

29

TAX AUTHORIZATION

30

Section 301.  General tax authorization.

- 39 -

 


1

A county shall have the power and may by ordinance levy and

2

assess or provide for the levying and assessment of taxes on the

3

sale or use of tangible personal property and services and the

4

occupancy of a hotel room at a rate of 1% within the

5

geographical limits of the county, subject to the provisions of

6

this act.

7

Section 302.  Continuity of tax.

8

A tax levied under the provisions of this act shall continue

9

in force on a fiscal year basis without annual reenactment until

10

the tax is subsequently repealed.

11

Section 303.  Election to participate under act.

12

A board of county commissioners may elect to participate

13

under this act by adopting an ordinance imposing the tax under

14

the procedures set forth in section 316.

15

Section 304.  (Reserved).

16

Section 305.  Municipal qualification and initiative.

17

(a)  Initial year of implementation.--

18

(1)  The governing body of a municipality desiring to

19

qualify for disbursements under section 318 beginning in the

20

first fiscal year following the effective date of this

21

section shall, on or before November 30, 2009, do all of the

22

following:

23

(i)  Adopt a resolution containing the following

24

statement:

25

We strongly urge the county to enact a county sales,

26

use and occupancy tax and intend to accept

27

disbursements of the sales, use and occupancy tax

28

collected.

29

(ii)  Deliver a certified copy of the resolution to

30

the board of county commissioners for the county in which

- 40 -

 


1

the municipality is located. If the municipality is

2

located in more than one county, the governing body shall

3

deliver a certified copy to the board of county

4

commissioners for each county where the municipality is

5

located.

6

(2)  Within 30 days following receipt of certified

7

resolutions from municipalities whose combined population

8

represents more than 60% of the population of the county, the

9

board of county commissioners of the county shall commence

10

the procedures under section 316 for imposing the tax under

11

section 312; however, the written notice to municipalities

12

under section 316(a) must be made 15 days prior to adoption

13

of the ordinance. The population of a municipality that is

14

located in more than one county shall be determined

15

separately for each county where the municipality is located

16

on the basis of the municipality's population within each

17

county.

18

(3)  The tax shall be imposed as of the date occurring 90

19

days following the adoption of the ordinance.

20

(4)  A municipality located in a county where the tax is

21

imposed during the first fiscal year following the effective

22

date of this section whose governing body does not adopt and

23

deliver to the board of county commissioners a resolution

24

under paragraph (1) shall not be qualified to receive

25

disbursements under section 318 for the first three fiscal

26

years following the effective date of this section.

27

(b)  Implementation in subsequent years.--

28

(1)  A municipality located in a county where the tax is

29

not imposed in the first fiscal year following the effective

30

date of this section desiring to qualify for disbursements

- 41 -

 


1

under section 318 shall follow the procedures under

2

subsection (a), except with respect to adoption by November

3

30, 2009, prior to the enactment by the county of an

4

ordinance under section 316 in any subsequent fiscal year. In

5

that event, the municipality shall be qualified to receive

6

disbursements under section 318 for all subsequent fiscal

7

years that the tax is in effect. The requirements of

8

subsection (a)(1) must be met by June 30 for the imposition

9

of the tax by the county for the subsequent fiscal year.

10

(2)  A municipality located in a county where the tax has

11

been imposed and that has not followed the procedures under

12

subsection (a)(1) or (b)(1) may only qualify for

13

disbursements under section 318 in the fourth or any

14

subsequent fiscal year following imposition of the tax, and

15

for all fiscal years thereafter, if it does all of the

16

following by September 1 of the fiscal year prior to the

17

first fiscal year in which the municipality will be qualified

18

to receive disbursement:

19

(i)  Adopts a resolution containing the following

20

statement:

21

We support the enactment by the county of the county

22

sales, use and occupancy tax, strongly urge its

23

continuation and intend to accept disbursements of

24

the sales, use and occupancy tax collected.

25

(ii)  Delivers a certified copy of the resolution to

26

the board of county commissioners for the county in which

27

the municipality is located. If the municipality is

28

located in more than one county, the governing body shall

29

deliver a certified copy to the board of county

30

commissioners for each county where the municipality is

- 42 -

 


1

located.

2

(c)  No limitation on counties.—-Nothing in this section

3

shall prohibit the board of commissioners of a county from

4

electing to participate under this act under the procedures set

5

forth in section 316 without having received certified

6

resolutions from municipalities under subsection (a) or (b).

7

SUBCHAPTER B

8

COUNTY SALES, USE AND OCCUPANCY TAX

9

Section 311.  Construction.

10

The tax imposed by the board of county commissioners under

11

this 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 313, the provisions

14

of Article II of the Tax Reform Code shall apply to the tax.

15

Section 312.  Imposition of tax.

16

(a)  Sales.--

17

(1)  The board of county commissioners may levy and

18

assess upon each separate sale at retail of tangible personal

19

property or services, as defined in Article II of the Tax

20

Reform Code, within the boundaries of the county, a tax on

21

the purchase price.

22

(2)  The tax shall be collected by the vendor from the

23

purchaser and shall be paid over to the Commonwealth as

24

provided in this subchapter.

25

(b)  Use.--

26

(1)  In any county within which the tax authorized in

27

subsection (a) is imposed, there shall be levied, assessed

28

and collected upon the use, within the county, of tangible

29

personal property purchased at retail and on services

30

purchased at retail, as defined in Article II of the Tax

- 43 -

 


1

Reform Code, a tax on the purchase price.

2

(2)  The tax shall be paid over to the Commonwealth by

3

the person who makes the use.

4

(3)  The use tax imposed under this subchapter shall not

5

be paid over to the Commonwealth by any person who has paid

6

the tax imposed by subsection (a) or has paid the tax imposed

7

by this subsection to the vendor with respect to the use.

8

(c)  Occupancy.--

9

(1)  In any county within which a tax authorized by

10

subsection (a) is imposed, there shall be levied, assessed

11

and collected an excise tax on the rent upon every occupancy

12

of a room or rooms in a hotel in the county.

13

(2)  The tax shall be collected by the operator or owner

14

from the occupant and paid over to the Commonwealth.

15

(d)  Rate and uniformity.--The tax authorized by subsections

16

(a), (b) and (c) shall be imposed at a rate of 1% and shall be

17

uniform.

18

(e)  Computation.--The tax imposed under this section shall

19

be computed in the manner set forth in section 503(e)(2) of

20

PICAA.

21

Section 313.  Situs.

22

The situs of sales at retail or uses shall be determined in

23

the manner specified by section 504 of PICAA and by Article II-A

24

of the Tax Reform Code.

25

Section 314.  Licenses.

26

The license issued pursuant to Article II of the Tax Reform

27

Code or a separate license for the collection of the tax imposed

28

by this subchapter may be issued by the department in the same

29

manner as is provided for in section 505 of PICAA. Licensees

30

shall be entitled to the same discount as provided in section

- 44 -

 


1

227 of the Tax Reform Code.

2

Section 315.  Rules and regulations; collection costs.

3

(a)  Regulations.--The rules and regulations promulgated

4

under section 270 of the Tax Reform Code shall be applicable to

5

the taxes imposed under section 312 insofar as such rules and

6

regulations are consistent with section 312.

7

(b)  Administration and costs.--

8

(1)  The department shall administer and enforce the

9

provisions of this subchapter. The department may promulgate

10

and enforce regulations consistent with the provisions of

11

this subchapter relating to anything pertaining to the

12

administration and enforcement of this subchapter. The

13

department may prescribe the extent to which a regulation

14

shall be applied without retroactive effect.

15

(2)  To cover their respective costs of administration,

16

the department and the Treasury Department shall be entitled

17

to retain a sum equal to costs of collection, but no more

18

than 1% and .5%, respectively, of the revenues collected

19

under this subchapter. The department shall inform the

20

counties participating under this act in writing monthly of

21

the sum retained and the costs of collection reimbursed. When

22

the annual operating budgets for the department and the

23

Treasury Department are submitted to the General Assembly,

24

each agency shall also submit to the chairman and minority

25

chairman of the Appropriations Committee of the Senate and to

26

the chairman and minority chairman of the Appropriations

27

Committee of the House of Representatives the actual sums

28

retained for costs of collection in the preceding fiscal

29

year, together with all supporting details.

30

Section 316.  Procedure.

- 45 -

 


1

(a)  Ordinance.--

2

(1)  A county desiring to impose the tax authorized by

3

section 312 shall give at least 45 days' written notice to

4

each municipality in the county of its intent to impose the

5

tax. The notice and ordinance shall state the tax rate and

6

refer to this subchapter. The ordinance shall authorize the

7

imposition of the tax on all subjects provided for in section

8

312.

9

(2)  Prior to adopting an ordinance imposing the tax

10

under section 312, the board of county commissioners shall

11

give public notice of its intent to adopt the ordinance in

12

the manner provided by section 306 of the Local Tax Enabling

13

Act and shall conduct at least one public hearing regarding

14

the proposed adoption of the ordinance.

15

(3)  The board of county commissioners may waive the

16

requirement for a public hearing if the ordinance will be

17

adopted pursuant to the provisions of section 305.

18

(4)  Except as provided in paragraph (5), an ordinance

19

adopted under this section shall be adopted by September 1

20

and the tax shall be imposed as of January 1 of the following

21

fiscal year.

22

(5)  Notwithstanding paragraph (4), a county desiring to

23

impose the tax in the first fiscal year following the

24

effective date of this section may adopt an ordinance under

25

this section by November 30, 2009. If this paragraph applies,

26

the tax shall be imposed as of the date occurring 90 days

27

following the adoption of the ordinance.

28

(b)  Notification to department.--Certified copies of the

29

county ordinance shall be delivered to the department and the

30

municipalities within 15 days following adoption of the

- 46 -

 


1

ordinance.

2

(c)  Repeal.--

3

(1)  No earlier than the end of the fifth fiscal year

4

following imposition of the tax authorized by section 312, a

5

county may repeal the tax. In that event, the county shall

6

give at least 30 days' written notice to every municipality

7

located in the county of its intent to repeal the tax. The

8

ordinance shall authorize the repeal of the tax on all

9

subjects provided for in section 312.

10

(2)  Prior to adopting an ordinance repealing the tax

11

imposed under section 312, the board of county commissioners

12

shall give public notice of its intent to repeal the

13

ordinance in the manner provided by section 306 of the Local

14

Tax Enabling Act for the adoption of ordinances and shall

15

conduct at least one public hearing regarding the proposed

16

repeal of the ordinance.

17

(d)  Delivery of repeal ordinance.--The board of county

18

commissioners shall deliver certified copies of a repeal

19

ordinance to the department and the municipalities within the

20

county by September 1 of the year prior to the effective date of

21

the repeal.

22

Section 317.  County Sales, Use and Occupancy Tax Fund.

23

(a)  Fund established in State Treasury.--There is hereby

24

established in the State Treasury a County Sales, Use and

25

Occupancy Tax Fund. The State Treasurer shall be custodian of

26

the fund which shall be subject to the provisions of law

27

applicable to funds listed in section 302 of the act of April 9,

28

1929 (P.L.343, No.176), known as The Fiscal Code. Subaccounts

29

shall be established within the fund for each county

30

participating under this act.

- 47 -

 


1

(b)  Deposits into fund.--

2

(1)  The tax imposed under section 312 shall be received

3

by the department and paid to the State Treasurer and, along

4

with interest and penalties, less any collection costs

5

allowed under this subchapter and any refunds and credits

6

paid, shall be credited to the respective counties'

7

subaccounts not less frequently than every two weeks.

8

(2)  During any period prior to the credit of money to

9

each such subaccount, interest earned on money received by

10

the department and paid to the State Treasurer under this

11

subchapter shall be credited to the respective subaccount. 

12

(c)  Lapsing and interfund transfers prohibited.--All money

13

in the fund and credited to the subaccounts, including, but not

14

limited to, money credited to the subaccounts under this

15

section, prior year encumbrances and the interest earned

16

thereon, shall not lapse or be transferred to any other fund or

17

subaccount, but shall remain in the fund and credited to the

18

respective subaccounts as provided in this chapter.

19

(d)  Investment.--Pending their disbursement, money received

20

on behalf of or deposited into the fund shall be invested or

21

reinvested as are other money in the custody of the State

22

Treasurer in the manner provided by law. All earnings received

23

from the investment or reinvestment of the money shall be

24

credited to the fund.

25

Section 318.  Disbursements.

26

(a)  General rule.--On or before the tenth business day

27

following receipt from the department of the necessary

28

calculations, the State Treasurer shall make disbursements as

29

provided in this section.

30

(b)  Disbursement to counties.--

- 48 -

 


1

(1)  The State Treasurer shall disburse to a county

2

imposing the tax under section 312 an amount of money equal

3

to 50% of the tax deposited in the fund credited to the

4

county's subaccount. The money shall be deposited into the

5

county general fund for disposition as provided under section

6

501(a).

7

(2)  The State Treasurer shall disburse to a county, in

8

addition to its share under paragraph (1), an amount of money

9

equal to the amount allocated under section 320 to all of the

10

nonqualified municipalities. The money shall be deposited

11

into the county general fund for disposition as provided

12

under section 501(a).

13

(c)  Disbursement to municipalities.--The remaining 50% of

14

the tax deposited into the fund shall be disbursed to each

15

qualified municipality in the amounts allocated under section

16

320(a). The money disbursed shall be deposited into the

17

municipal general fund for disposition as provided in section

18

501(b).

19

Section 319.  (Reserved).

20

Section 320.  Allocations.

21

(a)  Allocations to municipalities.--The department shall

22

compute allocations of the sums to be disbursed to

23

municipalities under section 318(c) in the following manner:

24

(1)  Fifty percent shall be allocated pro rata based on

25

the weighted tax revenues for each municipality located in

26

the county as a percentage of the total weighted tax revenues

27

of all municipalities located in the county. For

28

municipalities located in more than one county, the weighted

29

tax revenues for the county shall be prorated based upon the

30

population of the municipality in each county divided by the

- 49 -

 


1

total population of the municipality.

2

(2)  Fifty percent shall be allocated pro rata based on

3

the population of each municipality located in the county as

4

a percentage of the sum of the population of all

5

municipalities located in the county. For municipalities

6

located in more than one county, the population of the county

7

shall be determined separately for each county where the

8

municipality is located on the basis of the municipality's

9

population within each county.

10

(b)  Calculation of weighted tax revenues.--Calculations of

11

weighted tax revenues shall be made by the Department of

12

Community and Economic Development or any successor agency and

13

certified to the department based upon information reported to

14

the Department of Community and Economic Development or any

15

successor agency, subject to review, verification and approval

16

by the Department of Community and Economic Development or any

17

successor agency.

18

(c)  Definitions.--As used in this section, the following

19

words and phrases shall have the meanings given to them in this

20

subsection:

21

"Per capita market value."  The total market value of all

22

real property divided by population as determined by the most

23

recent decennial census.

24

"Total tax revenues."  Real property tax revenues, revenues

25

received by levy of a tax under the Local Tax Enabling Act,

26

revenues received by levy of a tax under this act and revenues

27

received by levy of a tax under the act of June 23, 1931

28

(P.L.932, No.317), known as The Third Class City Code, the act

29

of February 1, 1966 (1965 P.L.1656, No.581), known as The

30

Borough Code, the act of June 24, 1931 (P.L.1206, No.331), known

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1

as The First Class Township Code, and the act of May 1, 1933

2

(P.L.103, No.69), known as The Second Class Township Code, as

3

applicable to the municipality.

4

"Weighted tax revenues."  Total tax revenues of a

5

municipality from all sources divided by the per capita market

6

value of the municipality.

7

CHAPTER 5

8

DISPOSITION OF TAX REVENUES

9

Section 501.  Sales, use and occupancy tax revenues.

10

(a)  Counties.--

11

(1)  No less than 50% of any revenues estimated to be

12

received by a county from the tax in a fiscal year shall be

13

used to reduce, or maintain the reduction of, the county real

14

property tax, first by means of a homestead exclusion and

15

then, if the maximum homestead exclusion has been attained,

16

by means of reduction in the property tax millage rate.

17

(2)  The remaining 50% of revenues received by a county

18

from the tax in the fiscal year and any revenues received in

19

excess of the estimated revenues needed under paragraph (1)

20

shall be expended for public purposes authorized by law.

21

(b)  Municipalities.--

22

(1)  No less than 50% of any revenues estimated to be

23

received by a qualified municipality from the tax in a fiscal

24

year shall be used for either, or a combination of, the

25

following:

26

(i)  To reduce, or maintain the reduction of, the

27

municipal real property tax, first by means of a

28

homestead exclusion and then, if the maximum homestead

29

exclusion has been attained, by means of reduction in the

30

property tax millage rate.

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1

(ii)  To replace lost revenue as a result of the

2

existence of tax exempt real property within the

3

municipality in the immediately preceding fiscal year.

4

The value of tax exempt real property shall be calculated

5

by dividing the base year market value of the subject

6

property by the common level ratio as calculated annually

7

for the county where the municipality is located by the

8

State Tax Equalization Board. The base year market value

9

of each tax exempt property in the municipality shall be

10

updated with each countywide reassessment.

11

(2)  If the amount of revenues estimated to be received

12

by a qualified municipality in a fiscal year under paragraph

13

(1) exceeds the amount needed to reduce the municipal real

14

property tax under paragraph (1)(i) or replace lost revenue

15

under paragraph (1)(ii) in that fiscal year, the excess

16

revenue shall be used to reduce any other municipal tax.

17

(3)  The remaining 50% of revenues received by a

18

qualified municipality from the tax in a fiscal year and any

19

revenues received in excess of the estimated revenues needed

20

under paragraphs (1) and (2) shall be expended for any public

21

purpose as provided by law.

22

CHAPTER 21

23

MISCELLANEOUS PROVISIONS

24

Section 2101.  Effective date.

25

This act shall take effect immediately.

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