THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BARRAR, CALTAGIRONE, CLYMER, DENLINGER, FLECK, GABLER, GEIST, GINGRICH, GOODMAN, GROVE, HARHART, HESS, KAUFFMAN, M.K. KELLER, KILLION, PETRI, PYLE, RAPP, SCAVELLO, K. SMITH AND SWANGER, FEBRUARY 14, 2011

REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, FEBRUARY 14, 2011  

AN ACT

Amending the act of December 31, 1965 (P.L.1257, No.511),

entitled "An act empowering cities of the second class,

cities of the second class A, cities of the third class,

boroughs, towns, townships of the first class, townships of

the second class, school districts of the second class,

school districts of the third class and school districts of

the fourth class including independent school districts, to

levy, assess, collect or to provide for the levying,

assessment and collection of certain taxes subject to maximum

limitations for general revenue purposes; authorizing the

establishment of bureaus and the appointment and compensation

of officers, agencies and employes to assess and collect such

taxes; providing for joint collection of certain taxes,

prescribing certain definitions and other provisions for

taxes levied and assessed upon earned income, providing for

annual audits and for collection of delinquent taxes, and

permitting and requiring penalties to be imposed and

enforced, including penalties for disclosure of confidential

information, providing an appeal from the ordinance or

resolution levying such taxes to the court of quarter

sessions and to the Supreme Court and Superior Court,"

further providing for payment of tax to other political

subdivisions or states as credit or deduction and withholding

tax; and providing for local services tax credit.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 317 of the act of December 31, 1965

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

July 2, 2008 (P.L.197, No.32), is amended to read:

Section 317.  Payment of Tax to Other Political Subdivisions

or States as Credit or Deduction; Withholding Tax.--[Payment]

Except as provided in section 317.1, payment of any tax to any

political subdivision pursuant to an ordinance or resolution

passed or adopted prior to the effective date of this act shall

be credited to and allowed as a deduction from the liability of

taxpayers for any like tax respectively on salaries, wages,

commissions, other compensation or on net profits of businesses,

professions or other activities and for any income tax imposed

by any other political subdivision of this Commonwealth under

the authority of this chapter.

Payment of any tax on salaries, wages, commissions, other

compensation or on net profits of business, professions or other

activities to a political subdivision by residents thereof

pursuant to an ordinance or resolution passed or adopted under

the authority of this chapter shall be credited to and allowed

as a deduction from the liability of such persons for any other

like tax respectively on salaries, wages, commissions, other

compensation or on net profits of businesses, professions or

other activities imposed by any other political subdivision of

this Commonwealth under the authority of this chapter.

Payment of any tax on income to any political subdivision by

residents thereof pursuant to an ordinance or resolution passed

or adopted under the authority of this chapter shall, to the

extent that such income includes salaries, wages, commissions,

other compensation or net profits of businesses, professions or

other activities, but in such proportion as hereinafter set

forth, be credited to and allowed as a deduction from the

liability of such persons for any other tax on salaries, wages,

commissions, other compensation or on net profits of businesses,

professions, or other activities imposed by any other political

subdivision of this Commonwealth under the authority of this

chapter.

Payment of any tax on income to any state or to any political

subdivision thereof by residents thereof, pursuant to any State

or local law, may, at the discretion of the Pennsylvania

political subdivision imposing such tax, to the extent that such

income includes salaries, wages, commissions, or other

compensation or net profits of businesses, professions or other

activities but in such proportions as hereinafter set forth, be

credited to and allowed as a deduction from the liability of

such person for any other tax on salaries, wages, commissions,

other compensation or net profits of businesses, professions or

other activities imposed by any political subdivision of this

Commonwealth under the authority of this chapter, if residents

of the political subdivision in Pennsylvania receive credits and

deductions of a similar kind to a like degree from the tax on

income imposed by the other state or political subdivision

thereof.

Payment of any tax on income to any State other than

Pennsylvania or to any political subdivision located outside the

boundaries of this Commonwealth, by residents of a political

subdivision located in Pennsylvania shall, to the extent that

such income includes salaries, wages, commissions, or other

compensation or net profits of businesses, professions or other

activities but in such proportions as hereinafter set forth, be

credited to and allowed as a deduction from the liability of

such person for any other tax on salaries, wages, commissions,

other compensation or net profits of businesses, professions or

other activities imposed by any political subdivision of this

Commonwealth under the authority of this chapter.

Where a credit or a deduction is allowable in any of the

several cases hereinabove provided, it shall be allowed in

proportion to the concurrent periods for which taxes are imposed

by the other state or respective political subdivisions, but not

in excess of the amount previously paid for a concurrent period.

No credit or deduction shall be allowed against any tax on

earned income imposed under authority of this chapter to the

extent of the amount of credit or deduction taken for the same

period by the taxpayer against any income tax imposed by the

Commonwealth of Pennsylvania under section 314 of the act of

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

1971," on account of taxes imposed on income by other states or

by their political subdivisions.

Section 2.  The act is amended by adding a section to read:

Section 317.1.  Local Services Tax Credit.—-(a)  Payment of a

local services tax to a political subdivision pursuant to an

ordinance or resolution passed or adopted shall be credited to

and allowed as a deduction from the liability of a taxpayer for

a tax on earned income imposed by a political subdivision of

this Commonwealth.

(b)  This section shall only apply to taxpayers that are

residents of and are employed within the same political

subdivision imposing both the earned income tax and the local

services tax.

Section 3.  This act shall take effect immediately.