1Providing for county property tax reduction.

2The General Assembly of the Commonwealth of Pennsylvania
3hereby enacts as follows:

4TABLE OF CONTENTS

5Chapter 1. Preliminary Provisions

6Section 101. Short title.

7Section 102. Scope of act.

8Section 103. Definitions.

9Chapter 3. Optional Sales, Use and Occupancy Tax for County
10Property Tax Relief

11Section. 301. Construction.

12Section. 302. Imposition.

13Section. 303. Situs.

14Section. 304. License.

15Section. 305. Rules, regulations and collection costs.

16Section. 306. Ordinance.

17Section. 307. Property Tax Reduction and Diversification Fund.

18Section 308. Disbursements.

1Section 309. Use of funds.

2Chapter 5. Optional Income Tax for County Property Tax
3Reduction and Diversification

4Section 501. Authorization.

5Section 502. Ordinance.

6Section 503. Use of funds.

7Section 504. Credits.

8Section 505. Exemption and special provisions.

9Section 506. Earned income and net profits tax rates.

10Section 507. County earned income and net profits tax
11collection.

12Chapter 7. Optional County Business Privilege or Mercantile Tax
13for Property Tax Reduction and Diversification

14Section 701. Authorization.

15Section 702. Ordinance.

16Section 703. Use of funds.

17Section 704. Mercantile or business privilege tax.

18Section 705. Exclusions.

19Section 706. Administration.

20Chapter 51. Miscellaneous Provisions

21Section 5101. (Reserved).

22Section 5102. Effective date.

23The General Assembly of the Commonwealth of Pennsylvania
24hereby enacts as follows:

25CHAPTER 1

26PRELIMINARY PROVISIONS

27Section 101. Short title.

28This act shall be known and may be cited as the County
29Property Tax Reduction and Diversification Act.

30Section 102. Scope of act.

1This act authorizes a county to levy, assess and collect
2certain taxes as a means of reducing property taxes and
3providing for tax diversification.

4Section 103. Definitions.

5The following words and phrases when used in this act shall
6have the meanings given to them in this section unless the
7context clearly indicates otherwise:

8"Bank." As defined in section 102 of the Banking Code of
91965.

10"Bank and trust company." As defined in section 102 of the
11Banking Code of 1965.

12"Banking Code of 1965." The act of November 30, 1965
13(P.L.847, No.356), known as the Banking Code of 1965.

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

15"Domicile." As defined in section 501 of the Local Tax
16Enabling Act.

17"Earned income." As defined in section 501 of the Local Tax
18Enabling Act.

19"Earned income and net profits tax." The tax levied by a
20county on earned income and net profits under this chapter.

21"Local Tax Enabling Act." The act of December 31, 1965
22(P.L.1257, No.511), known as The Local Tax Enabling Act.

23"Mobile home." As defined in 75 Pa.C.S. § 102 (relating to
24definitions).

25"Motor vehicle." As defined in 75 Pa.C.S. § 102.

26"Net profits." As defined in section 501 of the Local Tax
27Enabling Act.

28"Private bank." As defined in section 102 of the Banking
29Code of 1965.

30"Purchase at retail." As defined in section 201 of the Tax

1Reform Code.

2"Resident." As defined in section 501 of the Local Tax
3Enabling Act.

4"Sale at retail." As defined in section 201 of the Tax
5Reform Code.

6"Savings bank." As defined in section 102 of the Banking
7Code of 1965.

8"Semitrailer." As defined in 75 Pa.C.S. § 102.

9"Service address." The address where:

10(1) telephone equipment is located and to which a
11telephone number is assigned;

12(2) a telegraph originated; or

13(3) the meter which registers where the service is
14located.

15"Services." A service that a tax has been imposed on under
16section 202 of the Tax Reform Code.

17"Tangible personal property." As defined in section 201 of
18the Tax Reform Code.

19"Tax collection district." A tax collection district
20established under section 504 of the Local Tax Enabling Act.

21"Taxpayer Relief Act" The act of June 27, 2006 (1st
22Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act.

23"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
24known as the Tax Reform Code of 1971.

25"Trailer." As defined in 75 Pa.C.S. § 102.

26"Trust company." As defined in section 102 of the Banking
27Code of 1965.

28CHAPTER 3

29OPTIONAL SALES,

30USE AND OCCUPANCY TAX

1FOR COUNTY PROPERTY TAX RELIEF

2Section 301. Construction.

3The tax imposed under this chapter shall be in addition to
4any tax imposed by the Commonwealth under Article II of the Tax
5Reform Code.

6Section 302. Imposition.

7(a) Sales.--A county may levy and assess a tax on the
8purchase price on each separate sale at retail of tangible
9personal property or services within the county. The tax shall
10be collected by the vendor from the purchaser and shall be paid
11to the Commonwealth as provided under this chapter.

12(b) Use.--

13(1) If a county imposes the tax authorized under
14subsection (a), it shall levy, assess and collect a tax on
15the purchase price for the use of tangible personal property
16purchased at retail and on services purchased at retail
17within the county.

18(2) The tax under paragraph (1) shall be paid to the
19Commonwealth by the person who uses the tangible personal 
20property or services.

21(3) The use tax imposed under this subsection shall not
22be paid to the Commonwealth by a person who has paid the tax
23imposed under subsection (a) or has paid the tax imposed
24under this subsection to the vendor with respect to the use.

25(c) Occupancy.--

26(1) If a county imposes the tax authorized under
27subsection (a), it shall levy, assess and collect an excise
28tax on the rent for each occupancy of a room in a hotel in
29the county.

30(2) The tax under paragraph (1) shall be collected by

1the operator or owner from the occupant and paid to the
2Commonwealth.

3(d) Rate and uniformity.--

4(1) The tax authorized by subsections (a), (b) and (c)
5shall be imposed at a rate of 1%.

6(2) The tax imposed by subsections (a), (b) and (c)
7shall be uniform.

8(e) Computation.--The tax imposed under this section shall
9be computed as follows:

10(1) If the purchase price is 50¢ or less, no tax shall
11be collected.

12(2) If the purchase price is 51¢ or more but less than
13$1.51, 1¢ shall be collected.

14(3) If the purchase price is $1.51 or more but less than
15$2.51, 2¢ shall be collected.

16(4) If the purchase price is $2.51 or more but less than
17$3.51, 3¢ shall be collected.

18(5) If the purchase price is $3.51 or more but less than
19$4.51, 4¢ shall be collected.

20(6) If the purchase price is $4.51 or more but less than
21$5.51, 5¢ shall be collected.

22(7) If the purchase price is $5.51 or more but less than
23$6.51, 6¢ shall be collected.

24(8) If the purchase price is $6.51 or more but less than
25$7.51, 7¢ shall be collected.

26(9) If the purchase price is $7.51 or more but less than
27$8.51, 8¢ shall be collected.

28(10) If the purchase price is $8.51 or more but less
29than $9.51, 9¢ shall be collected.

30(11) If the purchase price is $9.51 or more but less

1than $10.01, 10¢ shall be collected.

2(12) If the purchase price is more than $10, 1% of each
3$10 purchase price plus the above bracket charges upon any
4fractional part of a $10 increment shall be collected.

5Section 303. Situs.

6(a) Retail sales.--Except as provided under this subsection,
7a sale at retail shall be deemed to be consummated at the place
8of business of the retailer unless the tangible personal
9property sold is delivered by the retailer or his agent to an
10out-of-State destination, to a common carrier for delivery to an
11out-of-State destination or to the United States mail for
12delivery to an out-of-State destination. If a retailer has more
13than one place of business in this Commonwealth which
14participates in the sale, the sale shall be deemed to be
15consummated at the place of business of the retailer where the
16initial order for the tangible personal property is taken,
17notwithstanding whether the order will be forwarded elsewhere
18for acceptance, approval of credit, shipment or billing. A sale
19by a retailer's employee shall be deemed to be consummated at
20the place of business from which the employee works.

21(b) Vehicle, aircraft and motorcraft sales.--The sale at
22retail or use of a motor vehicle, trailer, semitrailer, mobile
23home, motorboat, aircraft or other similar tangible personal
24property, required under Federal or State law to be registered
25or licensed, shall be determined as specified under section 201-
26A of the Tax Reform Code.

27(c) Utility services.--The sale or use of steam, natural and
28manufactured gas, electricity, telephone and telegraph service
29shall be deemed to occur at the service address, notwithstanding
30where the services are rendered.

1(d) Mobile telecommunications services.--The situs of the
2sale or use of mobile telecommunication services shall be
3determined as specified under section 203-A of the Tax Reform
4Code.

5Section 304. License.

6The license issued under Article II of the Tax Reform Code or
7a separate license may be issued by the department for the
8collection and reporting of the taxes imposed by section 302.
9The license shall be nonassignable and subject to renewal as
10required by the department by regulation, except not more
11frequently than once within a five-year period. No fee may be
12charged for either a license or a renewal. Failure to obtain a
13license shall not relieve a person of liability to pay the taxes
14imposed under this chapter.

15Section 305. Rules, regulations and collection costs.

16(a) Regulations.--Rules and regulations promulgated under
17section 270 of the Tax Reform Code and which are consistent with
18this chapter shall apply to the taxes imposed under this
19chapter.

20(b) Administration.--The department:

21(1) Shall administer and enforce this chapter and may
22promulgate and enforce rules and regulations consistent with
23this chapter.

24(2) May determine nonretroactive applicability of a
25regulation.

26(c) Collection costs.--

27(1) The department may, for administration costs, retain
28an amount equal to the cost of collection and shall inform
29each county in writing monthly of the sum retained and the
30costs of collection reimbursed.

1(2) To provide a timely forecast and assure
2consideration of the sum retained, the department shall
3estimate its costs of collection for the next fiscal year and
4provide the estimate and supporting detail to:

5(i) The chairman and minority chairman of the
6Appropriations Committee of the Senate.

7(ii) The chairman and minority chairman of the
8Appropriations Committee of the House of Representatives.

9(iii) Each county.

10(3) At the time the annual operating budget for the
11department is submitted to the General Assembly, the
12department shall submit to the chairman and minority chairman
13of the Appropriations Committee of the Senate and to the
14chairman and minority chairman of the Appropriations
15Committee of the House of Representatives the actual sum
16retained for costs of collection in the preceding fiscal
17year, along with supporting details.

18Section 306. Ordinance.

19A county may impose a sales, use and occupancy tax under this
20chapter by ordinance.

21Section 307. Property Tax Reduction and Diversification Fund.

22(a) Establishment.--There is established in the State
23Treasury the Property Tax Reduction and Diversification Fund.
24The State Treasurer shall be custodian of the fund, which shall
25be subject to section 302 of the act of April 9, 1929 (P.L.343,
26No.176), known as The Fiscal Code. The State Treasurer shall
27establish within the fund an account for each county.

28(b) Deposits into fund.--

29(1) Taxes imposed under this chapter shall be received
30by the department and paid to the State Treasurer and shall,

1with interest and penalties, minus collection costs allowed
2under this chapter, refunds and credits paid, be credited to
3the appropriate account at least every month.

4(2) For a period prior to the credit of money to each
5account, interest earned on money received by the department
6and paid to the State Treasurer under this chapter shall be
7credited to the respective account.

8(c) Lapsing and interfund transfers prohibited.--Money in
9the fund and credited to an account, including money credited to
10an account under this section, a prior year encumbrance and
11earned interest:

12(1) May not lapse or be transferred to another fund or
13account.

14(2) Shall remain in the fund and be credited to the
15appropriate account.

16(3) Must be used as provided under section 310.

17(d) Investment.--Pending its disbursement, money received on
18behalf of or deposited into the fund shall be invested or
19reinvested as is other money in the custody of the State
20Treasurer. Earnings received from the investment or reinvestment
21of the money shall be credited to each account.

22Section 308. Disbursements.

23On July 1 of each year, the State Treasurer shall make
24disbursements from the account of a county.

25Section 309. Use of funds.

26Fifty percent of the funds disbursed from the Property Tax
27Reduction and Diversification Fund shall be used to reduce
28property tax millage rates.

29CHAPTER 5

30OPTIONAL INCOME TAX

1FOR COUNTY PROPERTY TAX REDUCTION

2AND DIVERSIFICATION

3Section 501. Authorization.

4(a) Authority.--A county may levy, assess and collect a tax
5on earned income under this section to fund property reductions
6and tax diversification in the county. Except as provided under
7this chapter, the tax shall be in addition to any tax imposed
8under 53 Pa.C.S. § 8701 (relating to general tax authorization),
9this act, Chapter 4 of the Local Tax Enabling Act, the Taxpayer
10Relief Act, the Tax Reform Code or any other act.

11(b) Preemption.--No act may vacate or preempt an ordinance
12passed or adopted under this chapter or an act which permits the
13imposition of a tax by a county, unless the act expressly
14vacates or preempts the authority to pass or adopt resolutions.

15Section 502. Ordinance.

16(a) Authorization.--A county may impose an earned income and
17net profits tax authorized under this chapter by ordinance.

18(b) Execution of tax rate.--A tax authorized under this
19section shall be self-executing and shall take effect beginning
20on the first day of the fiscal year which begins after the tax
21is authorized. A tax rate under this section shall continue in
22force on a fiscal year basis without annual reenactment, except
23in a year in which the rate of the tax is changed.

24Section 503. Use of funds.

25Fifty percent of the funds generated from an earned income
26and net profits tax authorized under this chapter shall be used
27to directly reduce county real property tax millage rates.

28Section 504. Credits.

29(a) General rule.--Except as provided under subsection (b),
30section 317 of the Local Tax Enabling Act shall apply to a

1county to determine a credit applicable to a tax imposed under
2section 501.

3(b) Limitation.--Payment of a tax on income to a state other
4than this Commonwealth or to a political subdivision located
5outside this Commonwealth by a taxpayer of a political
6subdivision located in this Commonwealth may not be credited to
7nor allowed as a deduction from the liability of the person for
8an income tax imposed by a county or political subdivision under
9the authority of this chapter.

10Section 505. Exemption and special provisions.

11A county that imposes an earned income and net profits tax
12under this chapter may exempt from the payment of that tax a
13person whose total income from any source is less than $12,000.

14Section 506. Earned income and net profits tax rates.

15(a) Initial tax rate.--The initial rate of the earned income
16and net profits tax shall be established by the county and may
17not exceed a rate of 1%.

18(b) Subsequent tax rate.--

19(1) A county or political subdivision, other than a
20school district, may increase the earned income and net
21profits tax rate under subsection (a) by ordinance as
22provided under this subsection.

23(2) Except as provided under paragraph (3), beginning
24with the first fiscal year after the imposition of an earned
25income and net profits tax and for each fiscal year
26thereafter, a county may not increase the earned income and
27net profits tax rate by an amount greater than:

28(i) the average percentage change of the Statewide
29average weekly wage; or

30(ii) the percentage change of the employment cost

1index for the previous fiscal year.

2(3) A county or political subdivision may increase the
3rate of the earned income and net profits tax by more than
4the limit under paragraph (2) if:

5(i) the county or political subdivision submits a
6referendum stating the specific rate of the tax increase
7must be submitted to the electors of the county at a
8municipal or general election; and

9(ii) a majority of the electors voting on the
10question approves the increase.

11(4) A county or political subdivision acting under
12paragraph (3) shall submit the referendum question to the
13appropriate election official not later than 60 days prior to
14a municipal or general election.

15Section 507. County earned income and net profits tax
16collection.

17Chapters 5 and 7 of the Local Tax Enabling Act shall apply to
18the collection of income taxes by counties. The county shall use
19the selected tax collector for the tax collection district in
20which the county is located. If a county is located in more than
21one taxing collection district, the county shall use the tax
22collector that serves a majority of the county.

23CHAPTER 7

24OPTIONAL COUNTY BUSINESS

25PRIVILEGE OR MERCANTILE TAX

26FOR PROPERTY TAX

27REDUCTION AND DIVERSIFICATION

28Section 701. Authorization.

29(a) Authority.--A county may levy, assess and collect a
30business privilege or mercantile tax under this chapter to fund

1property reductions and tax diversification in the county.
2Except as provided under this chapter, the tax shall be in
3addition to any tax imposed under 53 Pa.C.S. § 8701 (relating to
4general tax authorization), this act, Chapter 4 of the Local Tax
5Enabling Act, the Taxpayer Relief Act, the Tax Reform Code or
6any other act.

7(b) Preemption.--No act may vacate or preempt an ordinance
8passed or adopted under this chapter or an act which permits the
9imposition of a tax by a county, unless the act expressly
10vacates or preempts the authority to pass or adopt resolutions.

11Section 702. Ordinance.

12(a) Imposition.--A county may impose a business privilege or
13mercantile tax under this chapter by ordinance.

14(b) Execution of tax rate.--A tax authorized under this
15section shall be self-executing and shall take effect beginning
16on the first day of the fiscal year which begins after the tax
17is authorized. A tax rate under this section shall continue in
18force on a fiscal year basis without annual reenactment, except
19in a year in which the rate of the tax is changed.

20Section 703. Use of funds.

21Fifty percent of the funds generated from business privilege
22or mercantile tax authorized under this chapter shall be used to
23directly reduce county real property tax millage rates.

24Section 704. Mercantile or business privilege tax.

25(a) Wholesale dealer.--A school district may levy, assess
26and collect a tax on each dollar of the whole volume of business
27transacted by a wholesale dealer in goods, wares and
28merchandise.

29(b) Retail sales.--A school district may levy, assess and
30collect a tax on each dollar of sales by:

1(1) A retail dealer in goods, wares and merchandise,
2including a proprietor of a restaurant or other place where
3food, drink and refreshments are served.

4(2) Providers of services.

5(c) Transactions partially free of tax.--No tax shall be
6levied on the dollar volume of business transacted by wholesale
7and retail dealers derived from the resale of goods, wares and
8merchandise, taken by a dealer as a trade-in or as part payment
9for other goods, wares and merchandise, except to the extent
10that the resale price exceeds the trade-in allowance.

11Section 705. Exclusions.

12A tax under section 704 may not be levied, assessed or
13collected on:

14(1) The gross receipts from utility service of a person
15or company whose rates and services are fixed and regulated
16by the Pennsylvania Public Utility Commission, on a public
17utility service rendered by the person or company, on a
18privilege or transaction involving the rendering of the
19public utility service or on a Federal Energy Regulation
20Commission-approved qualifying facility.

21(2) Any of the following:

22(i) Goods and articles manufactured in the school
23district.

24(ii) The by-product of manufacture.

25(iii) Minerals, timber, natural resources and farm
26products produced in the school district.

27(iv) The preparation or processing of an item under
28subparagraph (iii) for use or market.

29(v) A privilege, act or transaction related to the
30business of manufacturing, the production, preparation or

1processing of a mineral, timber and natural resource or
2farm product, by a manufacturer, producer and a farmer
3with respect to the goods, article and product of their
4own manufacture, production or growth.

5(vi) A privilege, act or transaction relating to the
6business of processing by-products of a manufacture.

7(vii) (A) Except as provided under clause (B), the
8transportation, loading, unloading or dumping or
9storage of a good, article, product or by-product
10under this paragraph.

11(B) A school district may levy, assess and
12collect a tax on:

13(I) A person using a municipal service.

14(II) The personal income of an individual
15engaged in an activity under subclause (I),
16notwithstanding if the individual is doing
17business as an individual proprietorship or as a
18member of a partnership or other association.

19(3) Gross receipts or part of gross receipts which are:

20(i) A discount allowed to a purchaser as a cash
21discount for prompt payment of a purchaser's bill.

22(ii) A charge advanced by a seller for freight,
23delivery or other transportation for the purchaser in
24accordance with the terms of a contract of sale.

25(iii) Received for the sale of an article of
26personal property which was acquired by the seller as a
27trade-in to the extent that the gross receipts in the
28sale of the article taken in trade does not exceed the
29amount of trade-in allowance made in acquiring the
30article.

1(iv) A refund, credit or allowance given to a
2purchaser on account of a defect in goods sold or
3merchandise returned.

4(v) Pennsylvania sales tax and any sales tax, use
5tax and occupancy tax imposed under law.

6(vi) Based on the value of exchanges or transfers
7between one seller and another seller who transfers
8property with the understanding that property of an
9identical description will be returned at a subsequent
10date, except that if sellers engaged in similar lines of
11business exchange property and one of the sellers makes
12payment to the other seller in addition to the property
13exchanged, the additional payment received may be
14included in the gross receipts of the seller receiving
15the additional cash payment.

16(vii) A receipt of sellers from sales to other
17sellers in the same line if the seller transfers the
18title or possession at the same price for which the
19seller acquired the merchandise.

20(viii) A transfer between one department, branch or
21division of a corporation or other business entity of
22goods, wares and merchandise to another department,
23branch or division of the same corporation or business
24entity and which are recorded on the books ???? to
25reflect the interdepartmental transactions.

26(ix) A transfer attributable to an activity
27occurring outside the taxing authority. Gross receipts
28shall be attributed to the jurisdiction in which the
29activities generating the receipts occur.

30(4) The gross receipts of:

1(i) A bank, bank and trust company, private bank,
2savings bank or trust company, as defined in the Banking
3Code of 1965.

4(ii) An institution or entity subject to the
5supervision of the Department of Banking and Securities
6under section 201 of the act of May 15, 1933 (P.L.565,
7No.111), known as the Department of Banking Code.

8(iii) A national bank.

9(iv) A similar institution or entity established
10under Federal or State law.

11(5) The gross receipts of a distributor or importing
12distributor of malt or brewed beverages subject to licensure
13under the act of April 12, 1951 (P.L.90, No.21), known as the
14Liquor Code.

15Section 706. Administration.

16A tax enacted under this chapter shall be administered in the
17same manner as a tax administered under the Local Tax Enabling
18Act.

19CHAPTER 51

20MISCELLANEOUS PROVISIONS

21Section 5101. (Reserved).

22Section 5102. Effective date.

23This act shall take effect immediately.