H1600B2811A05522 MSP:DM 01/28/08 #90 A05522
AMENDMENTS TO HOUSE BILL NO. 1600
Sponsor: REPRESENTATIVE STEIL
Printer's No. 2811
1 Amend Title, page 1, line 1, by striking out "and"
2 Amend Title, page 1, line 2, by removing the period after
3 "Fund" and inserting
4 ; and providing for tax levy in school districts.
5 Amend Bill, page 10, by inserting between lines 2 and 3
6 CHAPTER 13
7 TAX LEVY IN SCHOOL DISTRICTS
8 Section 1301. Prohibitions.
9 Notwithstanding the provisions of section 333(b) of the act
10 of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as the
11 Taxpayer Relief Act, and except as set forth under section 1302,
12 beginning with the 2009-2010 fiscal year and each fiscal year
13 thereafter, a board of school directors may not increase the
14 rate of any tax levied in support of public schools nor may it
15 levy a tax in support of public schools that was not levied in
16 the 2008-2009 fiscal year.
17 Section 1302. Tax levy in school districts.
18 (a) Scope.--This section relates to school district personal
19 income tax authorization.
20 (b) Preemption.--No act of the General Assembly heretofore
21 or hereinafter enacted shall vacate or preempt any resolution
22 passed or adopted under the authority of this section, or any
23 other act, providing authority for the imposition of a tax by a
24 school district, unless the act of the General Assembly
25 expressly vacates or preempts the authority to pass or adopt
26 such resolutions.
27 (c) Personal income tax authorization.--
28 (1) Except as provided in paragraph (2), each school
29 district, beginning with the 2009-2010 fiscal year and each
30 fiscal year thereafter, shall have the power and may, by
31 resolution, levy, assess and collect or provide for the
32 levying, assessment and collection of a tax for general
33 revenue purposes at a rate as it shall determine on personal
34 income of the residents of the school district. In initially
35 levying a personal income tax or in subsequently increasing
36 the rate thereof, any initial rate or subsequent rate
37 increase levied in excess of the index established for the
38 school district pursuant to section 313(1)(ii) of the act of
39 June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as the
1 Taxpayer Relief Act, shall be subject to referendum under
2 section 333(c) of that act, unless an exception in section
3 333(f) of that act applies and is approved pursuant to
4 section 333(i) or (j) of that act.
5 (2) A school district that levies and assesses the tax,
6 subject to the duty of the Department of Revenue to collect
7 the tax in accordance with law, shall follow the same
8 regulations as the Department of Revenue for the levy and
9 assessment of personal income tax under Article III of the
10 Tax Reform Code.
11 (d) Continuity of tax.--Every tax levied under this section
12 shall continue in force on a calendar or fiscal year basis, as
13 the case may be, without annual reenactment unless the rate of
14 the tax is subsequently changed.
15 (e) Exemption of low-income persons.--
16 (1) (Reserved).
17 (2) Each school district shall have the power and may
18 exempt persons who qualify as claimants under Ch. 13 of the
19 act of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as
20 the Taxpayer Relief Act, and who have household income as
21 defined in section 1303 of the Taxpayer Relief Act which is
22 equal to or less than the maximum income requirement
23 necessary to qualify for a property tax rebate or rent rebate
24 in lieu of property taxes or rent due pursuant to the
25 Taxpayer Relief Act, from the payment of any tax on personal
26 income.
27 (3) Each school district shall adopt regulations for the
28 processing of claims for these exemptions.
29 (f) Collection of personal income tax by Commonwealth.--The
30 Department of Revenue shall be responsible for the collection of
31 all personal income tax imposed by a school district in
32 conjunction with the collection of any tax on personal income
33 imposed by the Commonwealth under the authority of the Tax
34 Reform Code.
35 (g) Limitation on assessment.--No assessment may be made of
36 any personal income tax imposed under this subsection more than
37 five years after the date on which such tax should have been
38 paid except where a fraudulent return or no return has been
39 filed.
40 (h) Distress and sale of property of taxpayer.--
41 (1) In case of the neglect or refusal of any person,
42 association or corporation to make payment of the amount of
43 any personal income tax due after two months from the date of
44 the tax notice, the Department of Revenue shall have the
45 power to levy the amount of such tax, penalty, interest and
46 costs thereon, not exceeding costs and charges allowed
47 constables for similar services by distress and sale of the
48 goods and chattels of such delinquent, wherever located, upon
49 giving at least ten days' public notice of such sale by one
50 advertisement in a newspaper of general circulation published
51 in the county.
52 (2) No failure to demand or collect any taxes by
53 distress and sale of goods and chattels shall invalidate any
54 return made, or lien filed for nonpayment of taxes, or any
55 tax sale for the collection of taxes.
56 (i) Collection of delinquent taxes from employers.--
57 (1) The Department of Revenue shall demand, receive and
58 collect from all employers employing persons owing delinquent
59 personal income taxes or having in possession unpaid
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1 compensation belonging to any person or persons owing
2 delinquent personal income taxes upon the presentation of a
3 written notice and demand certifying that the information
4 contained therein is true and correct and containing the name
5 of the taxpayer and the amount of tax due.
6 (2) Upon the presentation of such written notice and
7 demand, the employer shall deduct from the compensation of
8 such employees then owing, or thereafter due, a sum
9 sufficient to pay the amount of the delinquent personal
10 income taxes, interest, penalty and costs shown upon the
11 written notice or demand, and shall pay the same to the
12 Department of Revenue by which such delinquent tax was levied
13 within 60 days after such notice was given.
14 (3) No more than 10% of the compensation of the
15 delinquent taxpayer may be deducted at any one time for
16 delinquent personal income taxes, penalty, interest and
17 costs.
18 (4) Such employer shall be entitled to deduct from the
19 moneys collected from each employee the costs incurred from
20 the extra bookkeeping necessary to record such transactions,
21 not exceeding 2% of the amount collected and paid over to the
22 Department of Revenue.
23 (5) Upon the failure of any such employer to deduct the
24 amount of such taxes or to pay the same over to the
25 Department of Revenue, less the amount deducted under
26 paragraph (4), within the time hereby required, such employer
27 shall forfeit and pay the amount of such tax for each such
28 taxpayer whose taxes are not withheld and paid over, or that
29 are withheld and not paid over together with a penalty of
30 10%, to be recovered by a civil action to be instituted by
31 the Department of Revenue, as debts of like amount are now by
32 law recoverable, except that such person shall not have the
33 benefit of any exemption law or stay of execution.
34 (6) Nothing in this section shall be deemed to affect or
35 impair the right of any school district or the Department of
36 Revenue to pursue and collect delinquent taxes validly
37 imposed prior to the effective date of this subsection.
38 (j) Collection of delinquent taxes from Commonwealth.--
39 (1) Upon presentation of a written notice and demand
40 under oath to the State Treasurer or any other fiscal officer
41 of the Commonwealth, or its boards, authorities, agencies or
42 commissions, it shall be the duty of the treasurer or officer
43 to deduct from the compensation then owing a sum sufficient
44 to pay the amount of the delinquent personal income taxes,
45 interest, penalty and costs shown on the written notice. The
46 same shall be paid to the Department of Revenue within 60
47 days after such notice shall have been given.
48 (2) No more than 10% of the compensation of the
49 delinquent taxpayer may be deducted at any one time for
50 delinquent personal income taxes, interest, penalty and
51 costs.
52 (3) Nothing in this section shall be deemed to affect or
53 impair the right of a school district or the Department of
54 Revenue to pursue and collect delinquent taxes validly
55 imposed prior to the effective date of this section.
56 (k) Notice to taxpayer.--The Department of Revenue shall, at
57 least 15 days prior to the presentation of a written notice and
58 demand under subsection (i) or (j), notify the taxpayer owing
59 the delinquent tax by registered mail that a written notice and
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1 demand shall be presented to his employer unless such tax is
2 paid. The return receipt card for registered mail shall be
3 marked delivered to addressee only, and the cost of notification
4 by registered mail shall be included in the costs for collecting
5 taxes.
6 (l) Collection of taxes by suit.--
7 (1) Each school district and the Department of Revenue
8 shall have power to collect unpaid taxes from taxpayers and
9 employers owing such taxes by a civil action or other
10 appropriate remedy. Upon judgment, execution may be issued
11 without any stay or benefit of any exemption law. The right
12 to collect unpaid taxes under this subsection shall not be
13 affected by the fact that such taxes have been entered as
14 liens in the office of the prothonotary or the fact that the
15 property against which they were levied has been returned to
16 the county commissioners for taxes for prior years.
17 (2) A suit brought to recover the taxes under paragraph
18 (1) shall be instituted within three years after the tax is
19 due or within three years after a declaration or return has
20 been filed, whichever date is later, except in the following
21 cases:
22 (i) If no declaration or return was filed by any
23 person although a declaration or return was required to
24 be filed under provisions of the ordinance, there shall
25 be no limitation.
26 (ii) If an examination of the declaration or return
27 filed by any person, or of other evidence relating to
28 such declaration or return in the possession of the
29 Department of Revenue, reveals a fraudulent evasion of
30 taxes, there shall be no limitation.
31 (iii) If there is a substantial understatement of
32 tax liability of 25% or more and no fraud, suit shall be
33 instituted within six years.
34 (iv) If any person has deducted taxes under the
35 provisions of the resolution, and has failed to pay the
36 amounts so deducted to the Department of Revenue, or if
37 any person has willfully failed or omitted to make the
38 deductions required by this subsection, there shall be no
39 limitation.
40 (3) The Department of Revenue, by regulation, shall
41 establish the procedures for collecting the personal income
42 tax and paying the full amount collected over to the school
43 district on a quarterly basis.
44 (m) Definitions.--The following words and phrases when used
45 in this section shall have the meanings given to them in this
46 subsection unless the context clearly indicates otherwise:
47 "Association." A partnership, limited partnership or other
48 unincorporated group of two or more persons.
49 "Business." An enterprise, activity, profession or other
50 undertaking of an unincorporated nature conducted for profit or
51 ordinarily conducted for profit whether by a person, association
52 or other entity.
53 "Compensation." The classes of income included within the
54 definition of "compensation" set forth in section 301 of the Tax
55 Reform Code, and upon which are imposed a personal income tax by
56 the Commonwealth.
57 "Corporation." A corporation or joint stock association
58 organized under the laws of the United States or the
59 Commonwealth of Pennsylvania or any other state, territory,
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1 foreign country or dependency.
2 "Current year." The calendar year or fiscal year for which
3 the tax is levied.
4 "Department." The Department of Community and Economic
5 Development of the Commonwealth.
6 "Domicile." The place where one lives and has his permanent
7 home and to which he has the intention of returning whenever he
8 is absent. Actual residence is not necessarily domicile because
9 domicile is the fixed place of abode which, in the intention of
10 the taxpayer, is permanent rather than transitory. Domicile is
11 the voluntarily fixed place of habitation of a person, not for a
12 mere special or limited purpose, but with the present intention
13 of making a permanent home, until some event occurs to induce
14 him to adopt some other permanent home. In the case of
15 businesses or associations, the domicile is any place where the
16 business or association is conducting or engaging in a business
17 for profit within a school district.
18 "Employer." A person, association, corporation, governmental
19 unit or other entity employing one or more persons, other than
20 domestic servants for compensation.
21 "Governing body." The board of school directors of a school
22 district.
23 "Net profits." The class of income described as "net
24 profits" in section 303 of the Tax Reform Code, and upon which
25 is imposed a personal income tax by the Commonwealth.
26 "Nonresident." A person, association or other entity
27 domiciled outside the school district.
28 "Person" or "individual." A natural person.
29 "Personal income." The classes of income enumerated in
30 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
31 the Tax Reform Code of 1971, and upon which is imposed a
32 personal income tax by the Commonwealth.
33 "Political subdivision." A school district.
34 "Preceding year." The calendar year or fiscal year before
35 the current year.
36 "Register." The register provided for in this section.
37 "Resident." A person, association, corporation or other
38 entity:
39 (1) living in or maintaining a permanent or fixed place
40 of abode in a school district; or
41 (2) conducting or engaging in a business for profit
42 within a school district.
43 "School district." A school district of the first class,
44 first class A, second class, third class or fourth class,
45 including any independent school district.
46 "Succeeding year." The calendar year or fiscal year
47 following the current year.
48 "Tax officer." The person, public employee or private agency
49 designated by a governing body to collect and administer a tax
50 imposed under this section, and the treasurer of a school
51 district of the first class A.
52 "Taxpayer." A person, association or other entity required
53 under this section to file a tax return or to pay a tax.
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