Trial Engrossment of Amendment A08927 to Senate Bill 0653 P.N. 1905, Regular Session 2017-2018

HOUSE AMENDED

A08927

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

653

Session of

2017

INTRODUCED BY BROWNE, BOSCOLA, FOLMER, McGARRIGLE, BARTOLOTTA,

SCAVELLO, REGAN, EICHELBERGER, WILLIAMS, LAUGHLIN, MARTIN,

WAGNER AND SCHWANK, MAY 24, 2017

AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF

REPRESENTATIVES, AS AMENDED, JUNE 21, 2018

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," in

local taxes, further providing for collection; in

consolidated collection of local income taxes, further

providing for tax collection committees, for declaration and

payment of income taxes and for powers and duties of tax

officer; in collection of delinquent taxes, further providing

for costs of collection; and making a related editorial

change.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 313(a), Chapter 5 heading and section

505(a), (a.1), (b), (c), (j) and (l) of the act of December 31,

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

are amended to read:

Section 1. Section 313(a) and Chapter 5 of the act of

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

Enabling Act, are amended to read:

Section 313. Collection of Taxes.--(a) Administrative

Personnel; Joint Agreements.--

(1) Except as provided in section 506 and subject to the

provisions of section 509, any political subdivision is hereby

authorized to provide by ordinance or resolution for the

creation or designation of tax bureaus or the appointment and

compensation of a political subdivision, public employe, tax

bureau or public or private agency for the assessment and

collection of taxes imposed under authority of this chapter.

Each ordinance or resolution under this section authorizing a

political subdivision, public employe, tax bureau or public or

private agency to act in the capacity and with the authority of

a tax collector shall continue in force without annual

reauthorization unless otherwise repealed or revoked by the

political subdivision or unless otherwise provided by this act.

(2) Except as provided in section 506 and subject to the

provisions of section 509, political subdivisions imposing taxes

under authority of this chapter are authorized to make joint

agreements for the collection of such taxes or any of them. The

same political subdivision, tax bureau or public or private

agency may be employed by two or more political subdivisions to

collect any taxes imposed by them under authority of this

A08927 - 2 -

chapter.

* * *

CHAPTER 5

CONSOLIDATED COLLECTION OF LOCAL [INCOME] TAXES

Section 1.1. Sections 502(c)(2) and (3) and (e) and 505(a),

(a.1), (b), (c), (j) and (l) of the act, amended May 4, 2018

(P.L.102, No.18), are amended to read:

Section 502. Declaration and payment of income taxes.

* * *

subsections (a)(2) and (d), taxpayers shall declare and pay

income taxes as follows:

* * *

(2) (i) Every taxpayer making net profits resulting in

a tax liability of $200 or more shall, by April 15 of the

current year, make and file with the resident tax officer

a declaration of the taxpayer's estimated net profits

during the period beginning January 1 and ending December

31 of the current year, and shall pay to the resident tax

officer in four equal quarterly installments the tax due

on the estimated net profits. The first installment shall

be paid at the time of filing the declaration, and the

other installments shall be paid on or before July 15 of

the current year, October 15 of the current year and

January 15 of the succeeding year, respectively. For a

declaration of an estimated tax on net profits resulting

in a tax liability that is less than $200, a taxpayer may

remit one lump sum payment to the resident tax officer

without penalty and shall not be required to file

quarterly estimates.

A08927 - 3 -

(ii) Any taxpayer who first anticipates any net

profit resulting in a tax liability of $200 or more after

April 15 of the current year shall make and file the

declaration required on or before July 15 of the current

year, October 15 of the current year or January 15 of the

succeeding year, whichever date next follows the date on

which the taxpayer first anticipates such net profit, and

shall pay to the resident tax officer in equal

installments the tax due on or before the quarterly

payment dates that remain after the filing of the

declaration.

(iii) Every taxpayer shall, on or before April 15 of

the succeeding year, make and file with the resident tax

officer a final return showing the amount of net profits

resulting in a tax liability of $200 or more that was

earned or received based on the method of accounting used

by the taxpayer during the period beginning January 1 of

the current year, and ending December 31 of the current

year, the total amount of tax due on the net profits and

the total amount of tax paid. At the time of filing the

final return, the taxpayer shall pay to the resident tax

officer the balance of tax due or shall make demand for

refund or credit in the case of overpayment. Any taxpayer

may, in lieu of paying the fourth quarterly installment

of the estimated tax, elect to make and file with the

resident tax officer on or before January 31 of the

succeeding year, the final return.

(iv) The department, in consultation with the

Department of Revenue, shall provide by regulation for

the filing of adjusted declarations of estimated net

A08927 - 4 -

profits and for the payments of the estimated tax in

cases where a taxpayer who has filed the declaration

required under this subsection anticipates additional net

profits not previously declared or has overestimated

anticipated net profits.

(v) Every taxpayer who discontinues business prior

to December 31 of the current year, shall, within 30 days

after the discontinuance of business, file a final return

as required under this paragraph and pay the tax due.

(3) Every taxpayer who receives any other taxable income

not subject to withholding under section 512(3) resulting in

a tax liability of $200 or more shall make and file with the

resident tax officer a quarterly return on or before April 15

of the current year, July 15 of the current year, October 15

of the current year, and January 15 of the succeeding year,

setting forth the aggregate amount of taxable income not

subject to withholding by the taxpayer during the three-month

periods ending March 31 of the current year, June 30 of the

current year, September 30 of the current year, and December

31 of the current year, respectively, and subject to income

tax, together with such other information as the department

may require. Every taxpayer [filing] that is required to file

a return shall, at the time of filing the return, pay to the

resident tax officer the amount of income tax due. The

department shall establish criteria under which the tax

officer may waive the quarterly return and payment of the

income tax and permit a taxpayer to file the receipt of

taxable income on the taxpayer's annual return and pay the

income tax due on or before April 15 of the succeeding year.

* * *

A08927 - 5 -

(e) Restrictions.--In administering the provisions of this

section, no political subdivision, tax collection committee or

tax officer may:

(1) Prohibit a taxpayer from filing any return or

declaration required under this section in person or by first

class mail.

(2) Prohibit a taxpayer from filing any local income tax

return form, estimated tax return form or other form related

to any filing required under this section that has been

posted by the department on its publicly accessible Internet

website.

(3) Impose a penalty for failing to timely file a

quarterly estimated tax return for which no payment of

estimated tax was due, as shown in the taxpayer's annual

income tax return.

(4) Impose a penalty on a taxpayer unless it has issued

a letter that notifies the taxpayer that the taxpayer is

required to take corrective action within 30 days and failure

to take corrective action will result in a penalty being

imposed on the taxpayer.

(5) Require a taxpayer to file a local tax return

indicating that the taxpayer earned zero income or does not

owe any local tax to the local taxing jurisdiction if the

taxpayer met the local income tax exemption requirements and

was not required to file a local income tax return in the

preceding year.

Section 505. Tax collection committees.

(a) General rule.--Subject to the provisions of subsection

(m) and section 509(k), each tax collection district shall be

governed by a tax collection committee constituted and operated

A08927 - 6 -

as set forth in this section. Meetings of the tax collection

committee shall be conducted under 65 Pa.C.S. Ch. 7 (relating to

open meetings) and the act of June 21, 1957 (P.L.390, No.212),

referred to as the Right-to-Know Law.

(a.1) Duties.--A tax collection committee has the following

duties:

(1) To keep records of all votes and other actions taken

by the tax collection committee.

(2) To appoint and oversee a tax officer for the tax

collection district as provided in section 507(a).

(3) To set the compensation of the tax officer under

section 507(c).

(4) To require, hold, set and review the tax officer's

bond required by section 509(d).

(5) To establish the manner and extent of financing of

the tax collection committee.

(6) To adopt, amend and repeal bylaws for the management

of its affairs consistent with subsection (f) and regulations

under section 508.

(7) To adopt, amend and repeal policies and procedures

consistent with the regulations under section 508 for the

administration of [income] taxes under section 509 within the

tax collection district. The procedures shall supersede any

contrary resolutions or ordinances adopted by a political

subdivision. This authority shall not be construed to permit

a tax collection committee to change the rate or subject of

any tax.

* * *

(b) Delegates.--

(1) The governing body of each political subdivision

A08927 - 7 -

within a tax collection district that imposed an income tax

prior to July 1, 2009, shall appoint one voting delegate and

one or more alternates to represent the political subdivision

on the tax collection committee by September 15, 2009. The

governing body of each political subdivision that after June

30, 2009, imposes [an income] a tax [for the first time]

under section 509 shall appoint one voting delegate and one

or more alternates to represent the political subdivision on

the tax collection committee. A voting delegate or alternate

shall serve at the pleasure of the governing body of the

political subdivision.

(2) The governing body of each political subdivision

within a tax collection district that prior to July 1, 2009,

does not impose an income tax may appoint one nonvoting

delegate and one or more alternates to represent the

political subdivision on the tax collection committee. If,

after June 30, 2009, the political subdivision imposes [an

income] a tax under section 509, the nonvoting delegate shall

become a voting delegate to represent the political

subdivision on the tax collection committee.

* * *

(1) Only a delegate appointed by the governing body of a

political subdivision may represent a political subdivision

at a tax collection committee meeting. If a delegate cannot

be present for a tax collection committee meeting, the

alternate appointed under this section may represent the

political subdivision. Each delegate or alternate shall be

entitled to vote upon any action authorized or required of

the tax collection committee under this chapter.

A08927 - 8 -

(2) For the first meeting of the tax collection

committee, actions of the tax collection committee shall be

determined by a majority vote of those delegates present.

Votes shall be weighted among the governing bodies of the

member political subdivisions according to the following

formula: 50% shall be allocated according to the proportional

population of each political subdivision in proportion to the

population of each tax collection district as determined by

the most recent Federal decennial census data and 50% shall

be weighted in direct proportion to [income] tax revenues

collected in each political subdivision, based on each

political subdivision's most recent annual financial report

submitted to the department or the Department of Education.

For subsequent meetings, votes shall be taken in accordance

with this paragraph unless the bylaws provide otherwise.

(3) No later than September 1, 2009, the department

shall calculate the weighted vote for each political

subdivision within each tax collection district based on the

formula specified in paragraph (2). By July 1 of the year

following the first meeting, and of each year thereafter,

each tax collection committee shall recalculate the weighted

vote unless the bylaws provide for a more frequent

recalculation.

(4) If a political subdivision within the tax collection

district imposes [an income] a tax under section 509 for the

first time, the tax collection committee shall recalculate

the weighted vote or other method of voting under the bylaws.

* * *

(j) Appeals board.--

(1) By June 1, 2010, each tax collection committee shall

A08927 - 9 -

establish an appeals board comprised of a minimum of three

delegates or, in the case of a tax collection committee

established pursuant to subsection (m), a minimum of three

residents of the county.

(2) A determination of the tax officer relating to the

assessment, collection, refund, withholding, remittance or

distribution of [income] taxes enacted under this act may be

appealed to the appeals board by a taxpayer, employer,

political subdivision or another tax collection district. An

appeals board established under this section shall be the

appropriate venue for any appeal of the following:

(i) Any tax provided for under this act, except a

tax upon the transfer of real property or an interest in

real property.

(ii) A tax levied on payroll amounts generated as a

result of business activity as authorized by this act or

any other act.

(3) All appeals, other than those brought under

subsection (k), shall be conducted in a manner consistent

with 53 Pa.C.S. §§ 8431 (relating to petitions), 8432

(relating to practice and procedure), 8433 (relating to

decisions), 8434 (relating to appeals) and 8435 (relating to

equitable and legal principles to apply).

(3.1) When an appeal is filed in the manner prescribed

by a tax collection committee, a copy of the appeal shall be

concurrently filed with the taxing jurisdiction named in the

appeal.

(4) A tax collection committee may enter into an

agreement with another tax collection committee to establish

a joint appeals board.

A08927 - 10 -

(5) No member of an appeals board or joint appeals board

may be a tax officer or an employee, agent or attorney for a

tax officer.

(6) An appeals board appointed pursuant to this section

shall constitute a joint local tax appeals board as provided

for in 53 Pa.C.S. § 8430 (relating to administrative appeals)

for purposes of taxes collected under the supervision of the

appointing tax collection committee.

* * *

(l) Annual budget required.--

(1) Each tax collection committee shall adopt an annual

budget providing for compensation of the tax officer and

other expenses of operating the tax collection district.

(2) The expenses of operating the tax collection

district shall be shared among and paid by all political

subdivisions within the tax collection district that are

represented by voting delegates on the tax collection

committee and shall be weighted in direct proportion to

[income] tax revenues collected in each participating

political subdivision based on the political subdivision's

most recent annual audit report required under this section.

* * *

Section 2. Section 509(k) of the act is amended and the

section is amended by adding a subsection to read:

Section 509. Powers and duties of tax officer.

* * *

(k) Collection.--In addition to the powers and duties

enumerated in this section, a tax officer:

(1) no later than January 1, 2020, shall collect each

THE LOCAL SERVICES tax which is authorized under section

A08927 - 11 -

301.1 except a tax upon the transfer of real property or an

interest in real property and a tax levied on payroll amounts

generated as a result of business activity as authorized by

this act or any other act ; and

(2) when designated by the tax collection committee, [a

tax officer] may collect other taxes levied pursuant to [this

act,] the act of June 27, 2006 (1st Sp.Sess., P.L.1873,

No.1), known as the Taxpayer Relief Act, or other statutory

law[.], except taxes excluded from collection under paragraph

(1).

(k.1) Exception.--Notwithstanding subsection (k), a

political subdivision may retain its tax collection authority

over a mercantile or business privilege tax by resolution

adopted not less than 90 days prior to the effective date of

subsection (k)(1).

(K.1) EXCEPTION.--

(1) THE TAX COLLECTION COMMITTEE SHALL NOTIFY IN WRITING

EVERY POLITICAL SUBDIVISION AND THE ELECTED TAX COLLECTOR

WITHIN THE POLITICAL SUBDIVISION'S JURISDICTION 120 DAYS

PRIOR TO JANUARY 1, 2020, THAT THE POLITICAL SUBDIVISION MAY

RETAIN THE POLITICAL SUBDIVISION'S TAX COLLECTION AUTHORITY

OVER A LOCAL SERVICES TAX, BY ADOPTING A RESOLUTION NOT LESS

THAN 90 DAYS PRIOR TO THE EFFECTIVE DATE OF THIS SUBSECTION.

(2) IF AT ANYTIME AFTER A TAX OFFICER BEGINS COLLECTING

A LOCAL SERVICES TAX AS AUTHORIZED BY SUBSECTION (K)(1) ON

BEHALF OF A POLITICAL SUBDIVISION, AND THE POLITICAL

SUBDIVISION WISHES TO REGAIN THE POLITICAL SUBDIVISION'S

AUTHORITY TO COLLECT A LOCAL SERVICES TAX, THE POLITICAL

SUBDIVISION SHALL PASS A RESOLUTION NOT LESS THAN 90 DAYS

BEFORE JANUARY 1 OF THE FOLLOWING YEAR INFORMING THE TAX

A08927 - 12 -

COLLECTION COMMITTEE OF THE POLITICAL SUBDIVISION'S INTENT TO

RESUME COLLECTION OF THE LOCAL SERVICES TAX.

(3) IF AT ANY TIME A POLITICAL SUBDIVISION HAS OPTED OUT

OF HAVING THE TAX OFFICER COLLECT THE LOCAL SERVICES TAX AS

AUTHORIZED BY SUBSECTION (K)(1), AND THE POLITICAL

SUBDIVISION WISHES TO DELEGATE THE POLITICAL SUBDIVISION'S

AUTHORITY TO COLLECT THE LOCAL SERVICES TAX AS AUTHORIZED BY

SUBSECTION (K)(1), THE POLITICAL SUBDIVISION SHALL PASS A

RESOLUTION NOT LESS THAN 90 DAYS BEFORE JANUARY 1 OF THE

FOLLOWING YEAR INFORMING THE TAX COLLECTION COMMITTEE THAT

THE POLITICAL SUBDIVISION DELEGATES COLLECTION AUTHORITY OF

THE LOCAL SERVICES TAX TO THE TAX COLLECTION COMMITTEE.

Section 3. Section 707 heading of the act is amended to

read:

Section 707. Costs of Collection of Delinquent Per Capita,

Occupation, Occupational Privilege, Emergency and Municipal

Services, Local Services [and], Income and Payroll Taxes.--* * *

Section 4. Nothing in this act shall be construed to

terminate or modify the terms of a contract in effect on the

effective date of this section for the term of that contract

unless otherwise agreed to in writing by the parties to the

contract.

Section 5. This act shall take effect January 1, 2020, or

immediately, whichever is later.

A08927 - 13 -