PRINTER'S NO.  639

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

633

Session of

2011

  

  

INTRODUCED BY EICHELBERGER, ALLOWAY, BRUBAKER, WAUGH, EARLL AND WOZNIAK, FEBRUARY 23, 2011

  

  

REFERRED TO FINANCE, FEBRUARY 23, 2011  

  

  

  

AN ACT

  

1

Authorizing countywide implementation of sales, use, occupancy,

2

personal income or earned income and net profits taxes;

3

providing for the levying, assessment, collection and

4

distribution of such taxes among municipalities within a

5

county; requiring reduction of other taxes on real property

6

and individuals; and providing for the powers and duties of

7

the Department of Community and Economic Development, the

8

Department of Revenue and the State Treasurer.

9

TABLE OF CONTENTS

10

Chapter 1.  General Provisions

11

Section 101.  Short title.

12

Section 102.  Definitions.

13

Section 103.  Scope and limitations.

14

Section 104.  Home rule counties.

15

Section 105.  Certain rates of taxation limited.

16

Chapter 3.  Subjects of Taxation

17

Subchapter A.  Tax Authorization

18

Section 301.  General tax authorization.

19

Section 302.  Continuity of tax.

20

Section 303.  Election to participate under act.

21

Section 304.  Municipal input into participation.

 


1

Subchapter B.  County Sales and Use Tax

2

Section 311.  Construction.

3

Section 312.  Imposition.

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 and use tax funds.

9

Section 318.  Disbursements.

10

Subchapter C.  Personal Income Tax

11

Section 321.  Construction.

12

Section 322.  Personal income tax.

13

Section 323.  Collections.

14

Section 324.  Rules and regulations.

15

Section 325.  Procedure and administration.

16

Subchapter D.  Earned Income and Net Profits Tax

17

Section 331.  Earned income and net profits tax.

18

Section 332.  Collections.

19

Section 333.  Rules and regulations.

20

Section 334.  Procedure and administration.

21

Subchapters E through I (Reserved)

22

Chapter 5.  Credits, Exemptions and Deferrals

23

Subchapter A.  Credits and Exemptions

24

Section 501.  Credits.

25

Section 502.  Low-income tax provisions.

26

Section 503.  Regulations.

27

Subchapter B.  Real Estate Tax Deferral

28

Section 511.  Legislative intent.

29

Section 512.  Definitions.

30

Section 513.  Authority.

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1

Section 514.  Income eligibility.

2

Section 515.  Tax deferral.

3

Section 516.  Application procedure.

4

Section 517.  Contents of application.

5

Section 518.  Attachment and satisfaction of liens.

6

Subchapters C through J (Reserved)

7

Chapter 7.  Disposition and Use of Tax Revenues

8

Section 701.  Use of sales tax revenues.

9

Section 702.  Use of personal or earned income tax revenues.

10

Section 703.  Revenue limitation exceptions.

11

Section 704.  Methods of reducing real property tax.

12

Section 705.  Estimates of distributions and revenues.

13

Chapter 9.  Register for Certain Taxes

14

Section 901.  Definitions.

15

Section 902.  Register for taxes under this act.

16

Section 903.  Information for register.

17

Section 904.  Availability and effective period of register.

18

Section 905.  Effect of nonfiling.

19

Section 906.  Effect of chapter on liability of taxpayer.

20

Chapter 17.  Miscellaneous Provisions

21

Section 1701.  Effective date.

22

The General Assembly of the Commonwealth of Pennsylvania

23

hereby enacts as follows:

24

CHAPTER 1

25

GENERAL PROVISIONS

26

Section 101.  Short title.

27

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

28

Options - Local Decisions Act.

29

Section 102.  Definitions.

30

The following words and phrases when used in this act shall

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1

have the meanings given to them in this section unless the

2

context clearly indicates otherwise:

3

"Association."  As defined in section 301 of the act of March

4

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

5

"Board of county commissioners."  Includes the successor in

6

function to the board of county commissioners in a county which

7

has adopted a home rule charter under the former act of April

8

13, 1972 (P.L.184, No.62), known as the Home Rule Charter and

9

Optional Plans Law, but does not include the city council of a

10

city of the first class.

11

"Budgeted revenue."  The revenue from taxes actually levied

12

and assessed by a local government unit. The term does not

13

include revenue from:

14

(1)  Delinquent taxes.

15

(2)  Payments in lieu of taxes.

16

(3)  The real estate transfer tax.

17

(4)  The Public Utility Realty Tax, commonly known as

18

PURTA.

19

(5)  Interest or dividend earnings.

20

(6)  Federal or State grants, contracts or

21

appropriations.

22

(7)  Income generated from operations.

23

(8)  Any other source that is revenue not derived

24

directly from taxes levied and assessed by a local government

25

unit.

26

"Business."  As defined in section 301 of the act of March 4,

27

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

28

"Classes of income."  The classes of income set forth in

29

section 303 of the act of March 4, 1971 (P.L.6, No.2), known as

30

the Tax Reform Code of 1971.

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1

"Compensation."  As defined in section 301 of the act of

2

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

3

1971.

4

"County."  A county-level municipality within this

5

Commonwealth, regardless of classification. The term includes a

6

county which has adopted a home rule charter or optional plan of

7

government under the former act of April 13, 1972 (P.L.184,

8

No.62), known as the Home Rule Charter and Optional Plans Law.

9

The term does not include a county of the first or second class.

10

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

11

the tax is levied.

12

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

13

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

14

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

15

Act.

16

"Earned income."  The classes of income defined as earned

17

income in section 501 of the act of December 31, 1965 (P.L.1257,

18

No.511), known as The Local Tax Enabling Act.

19

"Employer."  As defined in section 301 of the act of March 4,

20

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

21

"Governing body."  The board of county commissioners,

22

including the successor in function to the board of county

23

commissioners in a county which has adopted a home rule charter

24

under the former act of April 13, 1972 (P.L.184, No.62), known

25

as the Home Rule Charter and Optional Plans Law, city council,

26

borough council, incorporated town council, board of township

27

commissioners, board of township supervisors, a governing

28

council of a home rule municipality or optional plan

29

municipality or a governing council of any similar general

30

purpose unit of government which may hereafter be created by

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1

statute.

2

"Home rule municipality."  A city, borough, incorporated town

3

or township which has adopted a home rule charter under the

4

former act of April 13, 1972 (P.L.184, No.62), known as the Home

5

Rule Charter and Optional Plans Law.

6

"Individual."  As defined in section 301 of the act of March

7

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

8

"Inverse per capita income."  A factor determined by dividing

9

the integer one by the per capita income of the municipality, as

10

determined by the most recent survey by the Department of

11

Commerce.

12

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

13

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

14

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

15

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

16

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

17

optional plan municipality, optional form municipality or

18

similar general purpose unit of government which may hereafter

19

be created by statute, except a city of the first or second

20

class.

21

"Net profits."  The classes of income defined as net profits

22

in section 501 of the act of December 31, 1965 (P.L.1257,

23

No.511), known as The Local Tax Enabling Act.

24

"Nonresident."  An individual domiciled outside the

25

municipality.

26

"Optional form municipality."  A city which has adopted an

27

optional form of government under the act of July 15, 1957

28

(P.L.901, No.399), known as the Optional Third Class City

29

Charter Law.

30

"Optional plan municipality."  A city, borough, incorporated

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1

town or township which has adopted an optional plan of

2

government under the former act of April 13, 1972 (P.L.184,

3

No.62), known as the Home Rule Charter and Optional Plans Law.

4

"Ordinance."  Includes a resolution.

5

"Personal income."  The classes of income enumerated in

6

section 303 of the act of March 4, 1971 (P.L.6, No.2), known as

7

the Tax Reform Code of 1971, and upon which is imposed a

8

personal income tax by the Commonwealth.

9

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

10

the current year.

11

"Register."  The register provided for in Chapter 9.

12

"Resident individual."  An individual who is domiciled in a

13

municipality or county.

14

"School district."  A school district of the first class A,

15

second class, third class or fourth class, including any

16

independent school district.

17

"Succeeding year."  The calendar year or fiscal year

18

following the current year.

19

"Tax base."  The collective value of activities, property and

20

assets available for taxation.

21

"Tax officer."  The person, public employee or private agency

22

designated by a governing body to collect and administer the

23

taxes imposed under this act.

24

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

25

known as the Tax Reform Code of 1971.

26

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

27

tax return or to pay a tax.

28

Section 103.  Scope and limitations.

29

(a)  General rule.--Except as provided in subsections (b),

30

(c), (d) and (e), it is the intent of this act to confer upon

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1

each county the power to levy, assess and collect taxes upon the

2

subjects of taxation set forth in this act.

3

(b)  Real estate transfer taxes.--This act does not affect

4

the powers of a municipality or school district to levy, assess

5

and collect a real estate transfer tax, including any real

6

estate transfer tax levied under the authority of section

7

652.1(a)(4) of the act of March 10, 1949 (P.L.30, No.14), known

8

as the Public School Code of 1949.

9

(c)  Amusement taxes.--A municipality or school district

10

within a county which has elected to participate under section

11

303 and which has lawfully levied, assessed or collected or

12

provided for the levying, assessment or collection of an

13

amusement tax may continue to levy, assess and collect such tax

14

on such subjects upon which the tax was imposed at a rate not to

15

exceed the rate imposed by the municipality or school district

16

as of the effective date of this act. No new amusement taxes

17

shall be imposed by a municipality or school district within a

18

county which has elected to participate under this act.

19

(d)  Mercantile or business privilege taxes on gross

20

receipts.--Nothing in this act shall, either explicitly or

21

implicitly, permit a county, municipality or school district to

22

impose, expand the subjects of or increase the rate of any

23

mercantile or business privilege tax on gross receipts not

24

otherwise permitted prior to the effective date of this act, nor

25

shall any provision of this act affect the prohibitions on

26

business gross receipts taxes as set forth in section 301.1 of

27

the Local Tax Enabling Act, section 533 of the act of December

28

13, 1988 (P.L.1121, No.145), known as the Local Tax Reform Act,

29

the Tax Reform Code and any other relevant act.

30

(e)  Sign or sign privilege tax.--Any county or municipality

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1

which has on or before January 1, 2009, assessed, levied or

2

collected an annual sign tax or annual sign privilege tax or

3

provided for the levying, assessment or collection of such tax

4

may continue to levy, assess and collect such tax on such

5

subjects upon which the tax was imposed by the county or

6

municipality at a rate not to exceed the rate imposed by the

7

county or municipality as of January 1, 2009. A county or

8

municipality which does not assess, levy or collect an annual

9

sign tax or annual sign privilege tax as of January 1, 2009, may

10

not assess, levy or collect such tax. 

11

Section 104.  Home rule counties.

12

The governing body of a home rule county which desires to

13

participate under this act shall be subject to the requirements

14

of section 303. A home rule county shall not have the right or

15

authority to fix the rate of taxation for the subjects of

16

taxation authorized under Chapter 3 in excess of the rates fixed

17

in Chapter 3. Home rule counties which elect to participate

18

under the provisions of this act shall be subject to the

19

distribution provisions of sections 701 and 702.

20

Section 105.  Certain rates of taxation limited.

21

(a)  General rule.--If a municipality and school district

22

both impose an earned income tax on the same individual under

23

the Local Tax Enabling Act and the municipality and school

24

district are limited to, or have agreed upon, a division of the

25

tax rate in accordance with section 311 of the Local Tax

26

Enabling Act, then the municipality and school district which

27

continue to levy the income tax under the Local Tax Enabling Act

28

shall remain subject to that limitation or agreement.

29

(b)  Limitation.--In the event that a school district opts to

30

impose or increase an earned income tax under the Local Tax

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1

Enabling Act within a county that has elected to participate

2

under this act, the school district shall remain subject to the

3

provisions of section 311 of the Local Tax Enabling Act, or any

4

agreement pertaining to the division of the tax rate with

5

affected municipalities. 

6

CHAPTER 3

7

SUBJECTS OF TAXATION

8

SUBCHAPTER A

9

TAX AUTHORIZATION

10

Section 301.  General tax authorization.

11

(a)  General rule.--Subject to sections 303 and 304 and

12

except as provided in subsection (b), a county of the third

13

through eighth class shall have the power and may by ordinance

14

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

15

and collection of such taxes on the subjects specified in this

16

chapter for general revenue purposes as it shall determine on

17

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

18

within the geographical limits of the county.

19

(b)  Exclusions.--No county, or any municipality within the

20

county which levies a tax authorized by this act, shall have any

21

power or authority to levy, assess or collect:

22

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

23

an assessed valuation of a particular trade, occupation or

24

profession, commonly known as an occupation tax.

25

(2)  A tax at a set or flat rate upon persons employed

26

within the taxing district, commonly known as an occupational

27

privilege tax.

28

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

29

(4)  A new, or an increase in any existing, earned income

30

and net profits tax levied under the Local Tax Enabling Act.

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1

(5)  Any other tax authorized or permitted under the

2

Local Tax Enabling Act except a local services tax, an

3

amusement tax in effect prior to the effective date of this

4

act, or a mercantile or business privilege tax on gross

5

receipts, as modified by paragraph (7).

6

(6)  The intangible personal property tax under the act

7

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

8

Intangible Personal Property Tax Law.

9

(7)  Any mercantile or business privilege tax on gross

10

receipts, as limited by section 533 of the act of December

11

13, 1988 (P.L.1121, No.145), known as the Local Tax Reform

12

Act, after one year from the date of the election to

13

participate under this act pursuant to section 303.

14

Section 302.  Continuity of tax.

15

Every tax levied under the provisions of this act shall

16

continue in force on a calendar or fiscal year basis, as the

17

case may be, without annual reenactment unless the rate of tax

18

is lawfully increased or the tax is subsequently repealed.

19

Section 303.  Election to participate under act.

20

(a)  General rule.--The imposition of a tax under Subchapter

21

B, C or D shall only be done in accordance with this section.

22

(b)  Tax study commission.--Before any county, or

23

municipalities therein, seeks referendum approval for the levy,

24

assessment or collection of any tax under the authority of this

25

act, a local tax study commission shall be appointed in

26

accordance with the following provisions:

27

(1)  The local tax study commission shall consist of

28

members appointed by the governing body of the county in

29

consultation with municipal officials within the county. No

30

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

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1

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

2

county or a municipality therein. All members shall be

3

residents of the county. The local tax study commission shall

4

consist of seven members. Representatives on a local tax

5

study commission must reasonably reflect the socioeconomic,

6

age and occupational diversity of the county.

7

(2)  The governing body of the county shall provide

8

necessary and reasonable staff to support the local tax study

9

commission and shall reimburse the members of the local tax

10

study commission for necessary and reasonable expenses in the

11

discharge of their duties.

12

(3)  The local tax study commission shall study the

13

existing taxes levied, assessed and collected by the county

14

and the municipalities therein and the effect of any county

15

or municipal taxes imposed concurrently with a school

16

district and shall determine if and how the tax policies of

17

the county and its municipalities could be strengthened or

18

made more equitable by adopting for levy, assessment and

19

collection a different combination of any of the following

20

taxes: personal income tax, earned income and net profits

21

tax, real estate tax or sales and use tax at such levels and

22

in such combinations on permissible subjects of taxation as

23

do not exceed the limitations in this act. This study shall

24

include, but not be limited to, consideration of all of the

25

following:

26

(i)  Historic rate and revenue provided by taxes

27

currently levied, assessed and collected by the county

28

and the municipalities therein.

29

(ii)  The percentage of total revenues provided by

30

taxes currently levied, assessed and collected.

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1

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

2

characteristics of the existing tax base.

3

(iv)  The projected revenues of any taxes currently

4

levied, assessed and collected.

5

(v)  The projected revenues of any taxes referred to

6

in this paragraph not currently levied, assessed and

7

collected by the municipality or county.

8

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

9

study commission shall submit a nonbinding recommendation to

10

the county and its municipalities with regard to the

11

appropriate tax or combination of taxes, identified in

12

paragraph (3), to be levied, assessed and collected

13

commencing the next fiscal year. No later than 60 days after

14

submission of the recommendation, the governing body of the

15

county shall accept or reject the recommendation of the local

16

tax study commission.

17

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

18

nonbinding recommendation within 120 days of its appointment,

19

the governing body of the county shall discharge the

20

appointed local tax study commission and may appoint itself

21

as the local tax study commission or may propose the adoption

22

of a combination of taxes for the county and its

23

municipalities for the next fiscal year.

24

(6)  The local tax study commission shall publish or

25

cause to be published, concurrent with issuing its

26

recommendation, a final report of its activities and

27

recommendations and shall deliver the final report to the

28

governing bodies of the county and municipalities therein.

29

The local tax study commission shall be subject to 65 Pa.C.S.

30

Ch. 7 (relating to open meetings) and the act of February 14,

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1

2008 (P.L.6, No.3), known as the Right-to-Know Law.

2

(7)  Receipts are required for all reimbursable expenses

3

under paragraph (2).

4

(8)  All the records, receipts, tapes, minutes of

5

meetings and written discussions of the local tax study

6

commission shall, upon its discharge, be turned over to the

7

secretary or chief clerk of the county for permanent

8

safekeeping. The secretary or chief clerk shall make such

9

materials available for public inspection at any time during

10

regular business hours.

11

(9)  The local tax study commission shall be discharged

12

upon the filing of its final report.

13

(c)  Public referendum requirements to participate under

14

act.--Subject to the notice and public hearing requirements of

15

section 316(a), 325(a) or 334, whichever is applicable, a

16

governing body may elect to participate under this act by

17

obtaining the approval of the electorate of the affected county

18

and its municipalities in a public referendum at only the

19

municipal or general primary election preceding the calendar

20

year or fiscal year when the taxes will be initially imposed.

21

The referendum question must state the initial rate of the

22

proposed tax, the reason for the tax and the amount of proposed

23

revenue growth, if any, in the fiscal year of transition to the

24

tax system authorized under this act, expressed as a percent

25

increase over the prior year's budgeted revenue. Any increase in

26

revenues between the transition year and the prior year's

27

budgeted revenue shall not exceed 2%. The governing body must

28

frame the question in clear language that is readily

29

understandable by the layperson. For the purpose of

30

illustration, a referendum question could be framed as follows:

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1

Do you favor the imposition of an X% (name of tax) to be used

2

to replace certain existing local taxes and to make

3

reductions in real property taxes by means of a homestead

4

exemption in the amount of Y?

5

A nonlegal interpretative statement must accompany the question

6

in accordance with section 201.1 of the Pennsylvania Election

7

Code, that includes the following: the initial rate of the tax

8

or taxes to be imposed and the maximum allowable rate of the tax

9

or taxes imposed under this act; the estimated revenues to be

10

derived from the initial rate of the tax or taxes imposed under

11

this act in the fiscal year of transition to the tax system

12

authorized under this act; the estimated tax savings from the

13

reduction in real property taxes and the elimination of certain

14

existing taxes under this act; the identification of the

15

existing taxes to be eliminated under this act; the method or

16

methods to be used to reduce real property taxes; the class or

17

classes of real property for which real property taxes would be

18

reduced; and the estimated amount of real property tax reduction

19

by class, expressed as an average percent reduction by class, if

20

applicable. If a referendum under this section fails to win

21

majority approval of the electorate, a county or municipality

22

shall not be required to seek the approval of the electorate as

23

a prerequisite to an increase in the rate of any tax which the

24

governing body of the affected county or municipality is already

25

authorized to levy and increase under any other act.

26

Section 304.  Municipal input into participation.

27

(a)  Decision to participate.--After the first January 1

28

occurring at least six months following the effective date of

29

this section, if the board of county commissioners of a county

30

has not elected to participate under this act, municipalities

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1

located in that county may require, as provided in this section,

2

the board of county commissioners of the county to establish a

3

local tax study commission under section 303. The affirmative

4

votes of the governing bodies of municipalities whose combined

5

population represents more than 60% of the population within the

6

county shall be necessary to require the board of county

7

commissioners to elect participation under this act. The

8

population of a municipality that is located in more than one

9

county shall be determined separately for each county where the

10

municipality is located on the basis of the municipality's

11

population within each county.

12

(b)  Decision not to participate.--If the board of county

13

commissioners of a county has elected to participate under this

14

act, municipalities located in that county may, at any time

15

prior to a final vote by the county commissioners under section

16

303(b)(4) or (5), submit a resolution passed by the

17

municipality's governing body to the board of county

18

commissioners of the county indicating the municipality's desire

19

to reject participation under this act. If the county receives

20

duly passed resolutions from municipalities whose combined

21

population represents 60% of the county's population, a county

22

shall reject participation and no referendum shall be placed

23

before the electorate.

24

(c)  Procedure.--

25

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

26

affirmative on the question shall certify its vote on the

27

question to the board of county commissioners. The governing

28

body of a municipality that is located in more than one

29

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

30

county commissioners for each county where the municipality

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1

is located.

2

(2)  The affirmative votes of the governing bodies of

3

municipalities whose combined population represents more than

4

60% of the population within the county shall be necessary

5

for the board of county commissioners to be required to elect

6

or reject participation under this act. The population of a

7

municipality that is located in more than one county shall be

8

determined separately for each county where the municipality

9

is located on the basis of the municipality's population

10

within each county.

11

(3)  Immediately upon receipt of certifications

12

indicating the approval of resolutions by municipalities

13

whose combined population represents more than 60% of the

14

population of the county, the board of county commissioners

15

of the county shall either elect to participate and initiate

16

the procedures under section 303 or reject participation

17

under this section, in accordance with the decision contained

18

in those resolutions which represent more than 60% of the

19

population of the county.

20

SUBCHAPTER B

21

COUNTY SALES AND USE TAX

22

Section 311.  Construction.

23

The tax imposed by the governing body of a county under this

24

subchapter shall be in lieu of imposing taxes under sections 322

25

and 331 and in addition to any tax imposed by the Commonwealth

26

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

27

provisions under section 313, the provisions of Article II of

28

the Tax Reform Code shall apply to the tax.

29

Section 312.  Imposition.

30

(a)  Sales.--The governing body of a county of the third

- 17 -

 


1

through eighth class may levy and assess upon each separate sale

2

at retail of tangible personal property or services, as defined

3

in Article II of the Tax Reform Code, within the boundaries of

4

the county, a tax on the purchase price. The tax shall be

5

collected by the vendor from the purchaser and shall be paid

6

over to the Commonwealth as provided in this subchapter. The

7

sales tax shall not be paid to the Commonwealth by any person

8

who has paid the tax imposed under Chapter 5 of the act of June

9

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

10

Intergovernmental Cooperation Authority Act for Cities of the

11

First Class, or subdivision (e) of Article XXXI-B of the act of

12

July 28, 1953 (P.L.723, No.230), known as the Second Class

13

County Code, equal to or greater than the tax imposed under this

14

subsection.

15

(b)  Use.--In any county, except for a county of the first or

16

second class, within which the tax authorized in subsection (a)

17

is imposed, there shall be levied, assessed and collected upon

18

the use, within the county, of tangible personal property

19

purchased at retail and on services purchased at retail, as

20

defined in Article II of the Tax Reform Code, a tax on the

21

purchase price. The tax shall be paid over to the Commonwealth

22

by the person who makes the use. The use tax imposed under this

23

subchapter shall not be paid over to the Commonwealth by any

24

person who has paid the tax imposed under:

25

(1)  Subsection (a).

26

(2)  This subsection to the vendor with respect to the

27

use.

28

(3)  Chapter 5 of the Pennsylvania Intergovernmental

29

Cooperation Authority Act for Cities of the First Class,

30

equal to or greater than the tax imposed under either

- 18 -

 


1

subsection (a) or this subsection.

2

(4)  Subdivision (e) of Article XXXI-B of the Second

3

Class County Code equal to or greater than the tax imposed

4

under either subsection (a) or this subsection.

5

(c)  Occupancy.--In any county within which a tax authorized

6

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

7

and collected an excise tax on the rent upon every occupancy of

8

a room or rooms in a hotel in the county. The tax shall be

9

collected by the operator or owner from the occupant and paid

10

over to the Commonwealth.

11

(d)  Rate and uniformity.--

12

(1)  The tax authorized by subsections (a), (b) and (c)

13

shall be imposed at a rate not to exceed 1%.

14

(2)  The tax imposed by subsections (a), (b) and (c)

15

shall be uniform.

16

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

17

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

18

Pennsylvania Intergovernmental Cooperation Authority Act for

19

Cities of the First Class.

20

Section 313.  Situs.

21

(a)  General rule.--Except as provided in subsection (b), the

22

situs of sales at retail or uses, including leases, of motor

23

vehicles, aircraft, motorcraft and utility services shall be

24

determined in the manner specified by section 504 of the act of

25

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

26

Intergovernmental Cooperation Authority Act for Cities of the

27

First Class, as well as the Tax Reform Code of 1971.

28

(b)  Premium cable and telecommunications services.--The sale

29

or use of premium cable or telecommunications service shall be

30

deemed to occur at the address in the county where the customer

- 19 -

 


1

receives the bill for service. This subsection shall determine

2

the situs of premium cable service for the purpose of all county

3

sales taxes, including those imposed under Chapter 5 of the

4

Pennsylvania Intergovernmental Cooperation Authority Act for

5

Cities of the First Class and under subdivision (e) of Article

6

XXXI-B of the act of July 28, 1953 (P.L.723, No.230), known as

7

the Second Class County Code.

8

Section 314.  Licenses.

9

A license for the collection of the tax imposed by this

10

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

11

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

12

as the Pennsylvania Intergovernmental Cooperation Authority Act

13

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

14

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

15

Code.

16

Section 315.  Rules and regulations; collection costs.

17

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

18

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

19

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

20

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

21

Cooperation Authority Act for Cities of the First Class.

22

(b)  Administrative costs.--The department, to cover its

23

costs of administration, shall be entitled to retain a sum equal

24

to the costs of administration. When the annual operating budget

25

for the department is submitted to the General Assembly, the

26

department shall also submit to the chairman and minority

27

chairman of the Appropriations Committee of the Senate and to

28

the chairman and minority chairman of the Appropriations

29

Committee of the House of Representatives a report of the actual

30

sums retained for costs of collection in the preceding fiscal

- 20 -

 


1

year, together with all supporting details.

2

Section 316.  Procedure and administration.

3

(a)  Ordinance.--Any county authorized to impose the tax

4

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

5

every municipality and school district located in the county of

6

its intent to impose the tax and shall adopt an ordinance after

7

the expiration of 60 days after the date of such notice. The

8

notice and an ordinance shall state the tax rate and refer to

9

this subchapter. The ordinance shall authorize the imposition of

10

all taxes provided for in section 312. Prior to adopting an

11

ordinance imposing the tax authorized by section 312, the

12

governing body of the county shall give public notice of its

13

intent to adopt the ordinance in the manner provided by section

14

306 of the Local Tax Enabling Act and shall conduct at least one

15

public hearing regarding the proposed adoption of the ordinance.

16

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

17

county ordinance shall be delivered to the department by

18

September 1 of the year prior to the effective date thereof. The

19

county ordinance shall become effective on January 1 of the

20

following year.

21

(c)  Delivery of repeal ordinance.--A certified copy of any

22

repeal ordinance shall be delivered to the department at least

23

30 days prior to the effective date of the repeal.

24

Section 317.  County sales and use tax funds.

25

There is created for each county levying the tax under

26

section 312 the (proper name) County Sales and Use Tax Fund. The

27

State Treasurer shall be custodian of the funds which shall be

28

subject to the provisions of law applicable to funds listed in

29

section 302 of the act of April 9, 1929 (P.L.343, No.176), known

30

as The Fiscal Code. Taxes imposed under section 312 shall be

- 21 -

 


1

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

2

along with interest and penalties, less any collection costs

3

allowed under this subchapter and any refunds and credits paid,

4

shall be credited to the funds not less frequently than every

5

two weeks. During any period prior to the credit of moneys to

6

the funds, interest earned on moneys received by the department

7

and paid to the State Treasurer under this subchapter shall be

8

deposited into the funds. All moneys in the funds, including,

9

but not limited to, moneys credited to the funds under this

10

section, prior year encumbrances and the interest earned

11

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

12

but shall remain in the funds. Pending their disbursement,

13

moneys received on behalf of or deposited into the funds shall

14

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

15

the State Treasurer in the manner provided by law. All earnings

16

received from the investment or reinvestment of the moneys shall

17

be credited to the respective funds. The Auditor General shall

18

periodically audit the records of the department relative to its

19

duties under this section and shall furnish the results of such

20

audit to any county levying the sales and use tax under section

21

312 and to any municipality within the county upon its request.

22

Section 318.  Disbursements.

23

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

24

month, the State Treasurer shall make the disbursements on

25

behalf of the county imposing the tax out of the moneys which

26

are, as of the last day of the previous month, contained in the

27

respective county sales and use tax fund.

28

(b)  Disbursement to counties.--The State Treasurer shall

29

disburse to a county imposing the tax authorized under section

30

312 an amount of money equal to 50% of the tax collected in that

- 22 -

 


1

county and remitted to the department and deposited in the

2

respective county sales and use tax fund. The county shall

3

deposit the revenue from the respective county sales and use tax

4

fund into the county general fund for disposition as provided

5

under section 701(a).

6

(c)  Disbursement to municipalities.--The State Treasurer

7

shall, at the same time, disburse to the municipalities 50% of

8

the tax collected in their respective counties as provided in

9

subsection (d). Each municipality's portion shall be deposited

10

in the municipal general fund for disposition as provided in

11

section 701(b).

12

(d)  Allocation to municipalities.--The money allocated to

13

municipalities in the county shall be distributed pro rata based

14

on the population of each municipality located in the county as

15

a percentage of the sum of the population of all municipalities

16

located in the county. For municipalities located in more than

17

one county, the population shall be determined separately for

18

each county where the municipality is located on the basis of

19

the municipality's population within each county.

20

SUBCHAPTER C

21

PERSONAL INCOME TAX

22

Section 321.  Construction.

23

The tax imposed in a county under this subchapter shall be in

24

lieu of imposing taxes under sections 312 and 331, and in

25

addition to any tax imposed by the Commonwealth under Article

26

III of the Tax Reform Code. In addition to the provisions in

27

sections 501, 502 and 503, the provisions of Article III of the

28

Tax Reform Code shall apply to the tax.

29

Section 322.  Personal income tax.

30

Upon approval by referendum under this act, a county shall

- 23 -

 


1

have the power to levy, assess and collect a tax on the personal

2

income of resident individuals of the county up to a maximum

3

rate of 1.5%, in increments of 0.25 of 1%.

4

Section 323.  Collections.

5

Any county imposing a tax under section 322 shall designate

6

either the tax officer under the Local Tax Enabling Act or the

7

Department of Revenue as the collector of the countywide

8

personal income tax. In the performance of the tax collection

9

duties under this subchapter, the designated tax officer shall

10

have all the same powers, rights, responsibilities and duties

11

for the collection of the taxes which may be imposed under the

12

Local Tax Enabling Act or otherwise by law.

13

Section 324.  Rules and regulations.

14

Taxes imposed under section 322 will be subject to the rules

15

and regulations adopted by the department under Article III of

16

the Tax Reform Code.

17

Section 325.  Procedure and administration.

18

(a)  Ordinance.--The governing body of the county, in order

19

to impose the tax authorized by section 322, shall adopt an

20

ordinance which shall refer to this subchapter. Prior to

21

adopting an ordinance imposing the tax authorized by section

22

322, the governing body shall give public notice of its intent

23

to adopt the ordinance in the manner provided in section 316,

24

and shall conduct at least one public hearing regarding the

25

proposed adoption of the ordinance.

26

(b)  Delivery.--A certified copy of the ordinance imposing

27

the tax shall be delivered to the department no later than 90

28

days prior to the effective date of the ordinance.

29

(c)  Delivery of repeal ordinance.--A certified copy of any

30

repeal ordinance shall be delivered to the department at least

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1

30 days prior to the effective date of the repeal.

2

SUBCHAPTER D

3

EARNED INCOME AND NET PROFITS TAX

4

Section 331.  Earned income and net profits tax.

5

If approved by referendum, and in lieu of imposing the taxes

6

under sections 312 and 322, a county shall have the power to

7

levy, assess and collect a tax on the earned income and net

8

profits of resident individuals of the municipality up to a

9

maximum rate of 1.5%, in increments of 0.25 of 1%. Any county

10

which imposes a tax under this subsection shall not impose any

11

tax under section 322.

12

Section 332.  Collections.

13

Any county imposing a tax under section 331 shall designate

14

the tax officer who is appointed under the Local Tax Enabling

15

Act as the collector of the earned income and net profits tax.

16

In the performance of the tax collection duties under this

17

subchapter, the designated tax officer shall have all the same

18

powers, rights, responsibilities and duties for the collection

19

of the taxes which may be imposed under the Local Tax Enabling

20

Act or otherwise by law.

21

Section 333.  Rules and regulations.

22

Taxes imposed under section 331 shall be subject to the rules

23

and regulations under the Local Tax Enabling Act.

24

Section 334.  Procedure and administration.

25

The governing body of the county, in order to impose the tax

26

authorized by section 331, shall adopt an ordinance which shall

27

refer to this subchapter. Prior to adopting an ordinance

28

imposing the tax authorized by section 331, the governing body

29

shall give public notice of its intent to adopt the ordinance in

30

the manner provided by section 306 of the Local Tax Enabling

- 25 -

 


1

Act, and shall conduct at least one public hearing regarding the

2

proposed adoption of the ordinance.

3

SUBCHAPTERS E THROUGH I (RESERVED)

4

CHAPTER 5

5

CREDITS, EXEMPTIONS AND DEFERRALS

6

SUBCHAPTER A

7

CREDITS AND EXEMPTIONS

8

Section 501.  Credits.

9

The provisions of section 317 of the Local Tax Enabling Act

10

shall be used to determine any credits under the provisions of

11

this act for any taxes imposed under section 322 on the earned

12

income portion of the personal income tax or section 331.

13

Section 502.  Low-income tax provisions.

14

The provisions of section 304 of the Tax Reform Code shall be

15

applied in any county which levies a tax under section 322 or

16

331.

17

Section 503.  Regulations.

18

Each county shall adopt regulations for the processing of

19

claims under sections 501 and 502.

20

SUBCHAPTER B

21

REAL ESTATE TAX DEFERRAL

22

Section 511.  Legislative intent.

23

In order to provide additional relief to residential property

24

owners facing tax increases caused by changes in the millage

25

rate, assessment rates or method or by a countywide

26

reassessment, it is the intent of the General Assembly to create

27

a program which will allow counties and municipalities to defer

28

the increased portion of real property taxes when certain

29

conditions are met.

30

Section 512.  Definitions.

- 26 -

 


1

The following words and phrases when used in this subchapter

2

shall have the meanings given to them in this section unless the

3

context clearly indicates otherwise:

4

"Base payment."  The amount of property tax paid by an

5

applicant in the base year.

6

"Base year."  The tax year preceding the first tax year for

7

which a taxing authority implements the provisions of this

8

subchapter or the tax year immediately preceding an applicant's

9

entry into the tax deferral program.

10

"Claimant."  A person who qualifies as a claimant under the

11

provisions of the former act of March 11, 1971 (P.L.104, No.3),

12

known as the Senior Citizens Rebate and Assistance Act, whether

13

or not a claim is filed under that act and whose household

14

income does not exceed the limit provided for in section 515.

15

"Homestead."  Real property which qualifies as a homestead

16

under the provisions of the former act of March 11, 1971

17

(P.L.104, No.3), known as the Senior Citizens Rebate and

18

Assistance Act, except real property which is rented or leased

19

to a claimant.

20

"Household income."  All income as defined in the former act

21

of March 11, 1971 (P.L.104, No.3), known as the Senior Citizens

22

Rebate and Assistance Act, received by the claimant and by the

23

claimant's spouse while residing in the homestead during the

24

calendar year for which a tax deferral is claimed.

25

"Increases in property taxes."  An increase in the property

26

tax above the base payment, resulting from a millage increase, a

27

change in the assessment ratio or method or any other reason.

28

"Taxing authority."  A county, city, borough, town or

29

township in a county that has elected to participate under this

30

act in accordance with section 303.

- 27 -

 


1

Section 513.  Authority.

2

All taxing authorities shall have the power and authority to

3

grant annual tax deferrals in the manner provided in this

4

subchapter.

5

Section 514.  Income eligibility.

6

(a)  First year of enactment.--During the first calendar year

7

this subchapter takes effect, a claimant shall be eligible for a

8

tax deferral if the claimant has a household income of $15,000

9

or less.

10

(b)  Subsequent years.--The amount of household income

11

provided for in subsection (a) shall be increased by $500 each

12

calendar year following the calendar year this subchapter takes

13

effect.

14

Section 515.  Tax deferral.

15

(a)  Amount.--An annual real estate tax deferral granted

16

under this subchapter shall equal the increase in real property

17

taxes in excess of the claimant's base payment.

18

(b)  Prohibition.─No tax deferrals shall be granted if the

19

total amount of deferred taxes, plus the total amount of all

20

other unsatisfied liens on the homestead of the claimant,

21

exceeds 85% of the market value of the homestead or if the

22

outstanding principal on any and all mortgages on the homestead

23

exceeds 70% of the market value of the homestead. Market value

24

shall equal assessed value divided by the common level ratio as

25

most recently determined by the State Tax Equalization Board for

26

the county in which the property is located.

27

Section 516.  Application procedure.

28

(a)  Initial application.--Any person eligible for a tax

29

deferral under this subchapter may apply annually to the taxing

30

authority. In the initial year of application, the following

- 28 -

 


1

information shall be provided in the manner required by the

2

taxing authority:

3

(1)  A statement of request for the tax deferral.

4

(2)  A certification that the applicant or the applicant

5

and his or her spouse jointly are the owners in fee simple

6

and residents of the property upon which the real property

7

taxes are imposed.

8

(3)  A certification that the applicant's residence is

9

adequately insured under a homeowner's policy to the extent

10

of all outstanding liens.

11

(4)  Receipts showing timely payment of the immediately

12

preceding year's nondeferred real property tax liability.

13

(5)  Proof of income eligibility under section 514.

14

(b)  Subsequent years.--After the initial entry into the

15

program, a claimant shall remain eligible for tax deferral in

16

subsequent years so long as the claimant continues to meet the

17

eligibility requirements of this subchapter.

18

Section 517.  Contents of application.

19

Any application for a tax deferral distributed to persons

20

shall contain the following:

21

(1)  A statement that the tax deferral granted under this

22

subchapter is provided in exchange for a lien against the

23

homestead of the applicant.

24

(2)  An explanation of the manner in which the deferred

25

taxes shall become due, payable and delinquent and include,

26

at a minimum, the consequences of noncompliance with the

27

provisions of this subchapter.

28

Section 518.  Attachment and satisfaction of liens.

29

(a)  Nature of lien.--All taxes deferred under this

30

subchapter shall constitute a prior lien on the homestead of the

- 29 -

 


1

claimant in favor of the taxing authority and shall attach as of

2

the date and in the same manner as other liens for taxes. The

3

deferred taxes shall be collected as other liens for taxes, but

4

the deferred taxes shall be due, payable and delinquent only as

5

provided in subsection (b), and no interest shall be collected

6

on the lien.

7

(b)  Payment.--

8

(1)  All or part of the deferred taxes may at any time be

9

paid to the taxing authority.

10

(2)  In the event that the deferred taxes are not paid by

11

the claimant or the claimant's spouse during his or her

12

lifetime or during their continued ownership of the property,

13

the deferred taxes shall be paid either:

14

(i)  prior to the conveyance of the property to any

15

third party; or

16

(ii)  prior to the passing of the legal or equitable

17

title, either by will or by statute, to the heirs of the

18

claimant or the claimant's spouse.

19

(3)  The surviving spouse of a claimant shall not be

20

required to pay the deferred taxes by reason of his or her

21

acquisition of the property due to death of the claimant as

22

long as the surviving spouse maintains his or her residence

23

in the property. The surviving spouse may continue to

24

participate in the tax deferral program in subsequent years

25

provided he or she is eligible under the provisions of this

26

subchapter.

27

SUBCHAPTERS C THROUGH J (RESERVED)

28

CHAPTER 7

29

DISPOSITION AND USE OF TAX REVENUES

30

Section 701.  Use of sales tax revenues.

- 30 -

 


1

(a)  Counties.--

2

(1)  In the fiscal year of implementation, each county

3

that imposes a sales and use tax under this act shall use all

4

revenues from the tax first to offset any lost revenue to the

5

county from the taxes prohibited under section 301(b) in an

6

amount equal to the revenue the county collected from the

7

prohibited taxes in the immediately preceding fiscal year and

8

then to reduce the county real property tax by means of:

9

(i)  The universal exemption or the homestead

10

exemption.

11

(ii)  A reduction in the millage rate.

12

(iii)  A rent and tax rebate program modeled after

13

the Commonwealth's Property Tax and Rent Rebate Program.

14

(iv)  Any combination of the options under the

15

foregoing subparagraphs.

16

(2)  Reductions under paragraph (1) shall be done in

17

accordance with section 704.

18

(3)  The department shall provide to each county that

19

imposes a sales and use tax an estimate of the total dollar

20

amount of revenue that the county can expect to receive from

21

the county's share of the 1% county sales and use tax for the

22

fiscal year of implementation. The department may charge the

23

county for the actual costs of calculating the requested

24

estimates. Guidelines concerning the costs shall be published

25

in the Pennsylvania Bulletin. In the event the actual amount

26

of sales and use tax revenue received by a county is less

27

than the estimate of sales and use tax revenue provided by

28

the department, the county may increase its real property tax

29

millage rate to the level necessary to offset any shortfall

30

resulting from an overestimation of sales and use tax

- 31 -

 


1

revenue, as certified by the department, in the fiscal year

2

of implementation.

3

(b)  Municipalities.--

4

(1)  All sales and use tax revenues received by any

5

municipality shall be first used to offset any lost revenue

6

from the taxes prohibited under section 301(b), and then used

7

to reduce the municipal real property tax by means of:

8

(i)  The universal exemption or the homestead

9

exemption.

10

(ii)  A reduction in the millage rate.

11

(iii)  A rent and tax rebate program modeled after

12

the Commonwealth's Property Tax and Rent Rebate Program.

13

(iv)  Any combination of the options under the

14

foregoing subparagraphs.

15

(2)  Reductions under paragraph (1) shall be done in

16

accordance with section 704.

17

(3)  In the event the actual amount of sales and use tax

18

revenue received by a municipality is less than the estimate

19

of sales and use tax revenue provided by the department, the

20

municipality may increase its real property tax millage rate

21

to the level necessary to offset any shortfall resulting from

22

an overestimation of sales and use tax revenue, as certified

23

by the department, in the fiscal year of implementation.

24

Section 702.  Use of personal or earned income tax revenues.

25

(a)  Counties.--

26

(1)  For the fiscal year of implementation of a newly

27

imposed income tax, all revenues received by a county shall

28

first be used to offset any lost revenue to the county from

29

the taxes prohibited under section 301(b) in an amount equal

30

to the revenue the county collected from the prohibited taxes

- 32 -

 


1

in the immediately preceding fiscal year and then to reduce

2

the municipal real property tax by means of:

3

(i)  The universal exemption or the homestead

4

exemption.

5

(ii)  A reduction in the millage rate.

6

(iii)  A rent and tax rebate program modeled after

7

the Commonwealth's Property Tax and Rent Rebate Program.

8

(iv)  Any combination of the options under the

9

foregoing subparagraphs.

10

(2)  Reductions under paragraph (1) shall be done in

11

accordance with section 704.

12

(b)  Municipalities.--The disposition of revenue from an

13

income tax or an increase in the rate of an income tax imposed

14

by municipalities under the authority of this act shall occur in

15

the following manner:

16

(1)  In a municipality which currently does not impose an

17

income tax, all revenues received by the municipality shall

18

first be used to offset any lost revenue to the municipality

19

from the taxes prohibited under section 301(b) in an amount

20

equal to the revenue the municipality collected from the

21

prohibited taxes in the immediately preceding fiscal year and

22

then to reduce the municipality's real property tax by means

23

of:

24

(i)  The universal exemption or the homestead

25

exemption.

26

(ii)  A reduction in the millage rate.

27

(iii)  A rent and tax rebate program modeled after

28

the Commonwealth's Property Tax and Rent Rebate Program.

29

(iv)  Any combination of the options under the

30

foregoing subparagraphs.

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1

(2)  Reductions under paragraph (1) shall be done in

2

accordance with section 704.

3

(3)  In municipalities which currently impose an earned

4

income tax, all revenues received by the municipality in

5

excess of current revenue, including the existing earned

6

income tax, shall first be used to offset lost revenue from

7

the taxes prohibited under section 301(b), and then to reduce

8

the municipality's real property tax by means of:

9

(i)  The universal exemption or the homestead

10

exemption.

11

(ii)  A reduction in the millage rate.

12

(iii)  A rent and tax rebate program modeled after

13

the Commonwealth's Property Tax and Rent Rebate Program.

14

(iv)  Any combination of the options under the

15

foregoing subparagraphs.

16

(4)  Reductions under paragraph (1) shall be done in

17

accordance with section 704.

18

(c)  Revenue estimates of department.--The department shall

19

provide to each taxing jurisdiction that imposes an income tax

20

under this act an estimate of the total dollar amount of revenue

21

that the taxing jurisdiction can expect to receive from an

22

income tax for the fiscal year of implementation. The department

23

may charge the taxing jurisdiction for the actual costs of

24

calculating the requested estimates. Guidelines concerning the

25

costs shall be published in the Pennsylvania Bulletin. In the

26

event the actual dollar amount of income tax revenue received by

27

a taxing jurisdiction is less than the estimate of income tax

28

revenue provided by the department, the taxing jurisdiction may

29

increase its real property tax millage rate to the level

30

necessary to offset any shortfall resulting from an

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1

overestimation of income tax revenue, as certified by the

2

department, in the fiscal year of implementation.

3

Section 703.  Revenue limitation exceptions.

4

(a)  Exceptions listed.--The limitations in sections 312, 322

5

and 331 may not be waived, except in the following cases:

6

(1)  To respond to or recover from an emergency or

7

disaster declared under 35 Pa.C.S. Pt. V (relating to

8

emergency management services), for the duration of the

9

emergency or duration of the disaster or for the costs of the

10

recovery from the emergency or disaster.

11

(2)  To implement a court order or an administrative

12

decision of a Federal or State agency. In instances where the

13

tax increase is necessary to respond to a court order or an

14

administrative decision of a Federal or State agency

15

requiring a temporary increase in local expenditures, the

16

rate increase shall be rescinded following fulfillment of the

17

court decision.

18

(3)  To respond to a Federal or State statute, regulation

19

or order adding to or significantly altering responsibilities

20

and duties or requiring expenditure of county or local funds

21

to the extent not funded by the Federal or State Government.

22

This provision shall apply only to a Federal or State

23

statute, regulation or order taking effect after the

24

effective date of this act.

25

(b)  Court action.--Prior to any waiver under subsection (a),

26

approval is required by the court of common pleas in the

27

judicial district in which the governing body is located. The

28

following shall apply to any proceedings instituted under this

29

subsection:

30

(1)  The governing body must prove by clear and

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1

convincing evidence the necessity for the waiver.

2

(2)  The court may retain continuing jurisdiction in

3

these cases and may, on its own motion or on petition of an

4

interested party, revoke approval for the waiver.

5

(c)  Distressed municipality or county.--This section shall

6

not be construed to prohibit any municipality or county declared

7

distressed under the act of July 10, 1987 (P.L.246, No.47),

8

known as the Municipalities Financial Recovery Act, from

9

petitioning the court of common pleas for a tax increase in

10

accordance with section 123(c) of the Municipalities Financial

11

Recovery Act.

12

(d)  Standing.--Any taxpayer or business shall have standing

13

as a party to a proceeding under this section as long as the

14

taxpayer or business resides within or pays real property taxes

15

to the taxing jurisdiction of the governing body instituting the

16

action.

17

Section 704.  Methods of reducing real property tax.

18

(a)  General rule.--Any county or municipality that levies or

19

receives revenue from a county sales and use tax or an income

20

tax under the provisions of this act may achieve the required

21

reduction of the real property tax by exercising one or any

22

combination of the options contained in the following

23

paragraphs:

24

(1)  The taxing jurisdiction may exclude from taxation by

25

means of the homestead exemption a fixed amount of the

26

assessed value of each homestead property in the taxing

27

jurisdiction within the limits, if any, imposed by Article

28

VIII of the Constitution of Pennsylvania, as provided in

29

subsection (b). The property tax shall be levied at the same

30

millage rate as levied by the taxing jurisdiction for the

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1

fiscal year immediately preceding the year of implementation

2

of the sales and use tax or income tax, as appropriate,

3

imposed under this act.

4

(2)  The taxing jurisdiction may exclude from taxation by

5

means of the universal exemption a fixed amount of the

6

assessed value of each property in the taxing jurisdiction

7

within the limits, if any, imposed by Article VIII of the

8

Constitution of Pennsylvania. The property tax shall be

9

levied at the same millage rate as levied by the taxing

10

jurisdiction for the fiscal year immediately preceding the

11

year of implementation of the sales and use tax or income

12

tax, as appropriate, imposed under this act.

13

(3)  The taxing jurisdiction may reduce the millage rate

14

of the real property tax generally to the same rate on all

15

taxable real property. The reduction in millage rate shall be

16

calculated based on the millage rate levied by the taxing

17

jurisdiction for the fiscal year immediately preceding the

18

year of implementation of the sales and use tax or income

19

tax, as appropriate, imposed under this act.

20

(4)  The taxing jurisdiction may reduce the millage rate

21

of the real property tax generally to the same rate on all

22

taxable real property in combination with either the

23

homestead exemption as provided under paragraph (1) or the

24

universal exemption as provided under paragraph (2). The

25

reduction in the real property millage rate shall be

26

calculated based on the millage rate levied by the taxing

27

jurisdiction for the fiscal year immediately preceding the

28

year of implementation of the sales and use tax or income

29

tax, as appropriate, imposed under this act.

30

(b)  Limitations.--

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1

(1)  Any taxing jurisdiction which elects to reduce the

2

real property tax by means of the homestead exemption shall

3

reduce the assessed value of each homestead in the taxing

4

jurisdiction by a fixed amount established by its governing

5

body up to the maximum limits contained in section 2(b) of

6

Article VIII of the Constitution of Pennsylvania.

7

(2)  After a countywide revision of assessments within a

8

county or municipality which has established a homestead

9

exemption, the governing body of the taxing jurisdiction

10

shall adjust the amount of the homestead exemption as

11

follows:

12

(i)  if the county changes its assessment base by

13

applying a change in the established predetermined ratio,

14

the homestead exemption shall be adjusted by the percent

15

change between the existing predetermined ratio and the

16

newly established predetermined ratio; or

17

(ii)  if the county performs a countywide revision of

18

assessments by revaluing all properties and applying an

19

established predetermined ratio, the homestead exemption

20

shall be adjusted by dividing the homestead exemption for

21

the year preceding the countywide revision of assessments

22

by the common level ratio and multiplying the quotient of

23

that calculation by the newly established predetermined

24

ratio.

25

(3)  If after reducing the real property tax by means of

26

either the homestead exemption or the universal exemption

27

there are any revenues remaining from a sales and use tax or

28

income tax imposed under this act, the remaining revenues

29

shall be used to further reduce the real property tax by

30

means of a uniform reduction in the millage rate.

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1

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

2

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

3

subsection:

4

"Common level ratio."  The ratio of assessed value to current

5

market value used generally in the county as last determined by

6

the State Tax Equalization Board under the act of June 27, 1947

7

(P.L.1046, No.447), referred to as the State Tax Equalization

8

Board Law.

9

"Established predetermined ratio."  The ratio of assessed

10

value to market value established by the board of county

11

commissioners and uniformly applied in determining assessed

12

value in any year.

13

"Homestead."  A dwelling, and as much of the land surrounding

14

it as is reasonably necessary for the use of a dwelling as a

15

home, occupied as the principal dwelling place by the owner or

16

owners thereof. The term also includes premises occupied by

17

reason of ownership by individuals as defined in section 301 of

18

the Tax Reform Code. The term also includes premises occupied by

19

reason of ownership in a cooperative housing corporation, mobile

20

homes which are assessed as realty for local property tax

21

purposes and the land, if owned by the person claiming the

22

homestead property exemption upon which the mobile home is

23

situated, and other similar living accommodations, as well as

24

part of a multidwelling or multipurpose building and a part of

25

the land on which it is built. The term also includes premises

26

occupied by reason of ownership of a dwelling located on land

27

owned by a nonprofit incorporated association of which the

28

person claiming the homestead property exemption is a member, if

29

the person is required to pay a pro rata share of the property

30

taxes levied against the association's land. As used in this

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1

subsection, the term "owner" includes a person in possession

2

under a contract of sale, deed of trust, life estate, joint

3

tenancy or tenancy in common or by reason of statutes of descent

4

or distribution.

5

Section 705.  Estimates of distributions and revenues.

6

(a)  General rule.--Estimates and proposed tax rates utilized

7

by a county, municipality or local study commission shall be

8

formulated so that in the fiscal year of implementation, the

9

total budgeted revenues of a county or municipality, including

10

the funds distributed under section 318, do not exceed the total

11

budgeted revenues in the prior fiscal year. Increases in the tax

12

base which occur as a natural result of social or economic

13

factors such as increases in property values, population, retail

14

sales or other taxable activities, and not as a result of

15

changes in rates of taxation, may be excluded from the

16

formulation.

17

(b)  Refund of excess.--If, in the fiscal year of

18

implementation, revenues from the taxes authorized by this act

19

cause the total budgeted revenues of a county or municipality,

20

including funds distributed under section 318, to exceed the

21

budgeted revenues of the prior fiscal year by more than 2%, the

22

county or municipality shall return such excess to the taxpayers

23

and adjust its tax rates to comply with subsection (a) in the

24

next fiscal year.

25

(c)  Use of excess.--If, in the fiscal year of

26

implementation, a county's or municipality's total budgeted

27

revenues do not exceed the prior fiscal year's budgeted revenues

28

by more than 2%, any excess shall be used to retire debt or

29

pension obligations of the government entity.

30

CHAPTER 9

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1

REGISTER FOR CERTAIN TAXES

2

Section 901.  Definitions.

3

The following words and phrases when used in this chapter

4

shall have the meanings given to them in this section unless the

5

context clearly indicates otherwise:

6

"Department."  The Department of Community and Economic

7

Development of the Commonwealth.

8

Section 902.  Register for taxes under this act.

9

(a)  General rule.--It shall be the duty of the department to

10

have available an official continuing register supplemented

11

annually of all sales and use, personal income, earned income

12

and net profits and municipal service taxes levied under this

13

act.

14

(b)  Contents of register.--The register and its supplements

15

shall list:

16

(1)  The counties or municipalities levying personal

17

income tax, earned income and net profits tax or sales and

18

use tax under this act.

19

(2)  The rate of tax as stated in the ordinance levying

20

the tax.

21

(3)  The rate on taxpayers.

22

(4)  The name and address of the tax officer responsible

23

for administering the collection of the tax and from whom

24

information, forms for reporting and copies of rules and

25

regulations are available.

26

Section 903.  Information for register.

27

Information for the register shall be furnished by the chief

28

clerk or secretary of each county or municipality to the

29

department in such manner and on such forms as the department

30

may prescribe. The information must be received by the

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1

department no later than July 15 of each year following the

2

first year of imposition to show new tax enactments, repeals and

3

changes. Failure to comply with this date for filing may result

4

in the omission of the tax levy from the register for that year.

5

Failure of the department to receive information of taxes

6

continued without change may be construed by the department to

7

mean that the information contained in the previous register

8

remains in force.

9

Section 904.  Availability and effective period of register.

10

The department shall have the register, with such annual

11

supplements as may be required by new tax enactments, repeals or

12

changes, available upon request no later than August 15 of each

13

year. The effective period for each register shall be from July

14

1 of the year in which it is issued to June 30 of the following

15

year.

16

Section 905.  Effect of nonfiling.

17

Employers shall not be required by any ordinance to withhold

18

from the compensation of their employees any personal income tax

19

or earned income and net profits tax imposed under the

20

provisions of this act which is not listed in the register or to

21

make reports of compensation in connection with taxes not so

22

listed. If the register is not available by August 15, the

23

register of the previous year shall continue temporarily in

24

effect for an additional period of not more than one year.

25

Section 906.  Effect of chapter on liability of taxpayer.

26

The provisions of this chapter shall not affect the liability

27

of any taxpayer for taxes lawfully imposed under this act.

28

CHAPTER 17

29

MISCELLANEOUS PROVISIONS

30

Section 1701.  Effective date.

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1

This act shall take effect immediately.

- 43 -