PRIOR PRINTER'S NO. 143 PRINTER'S NO. 708
No. 157 Session of 2005
INTRODUCED BY ARMSTRONG, VANCE, GORDNER, THOMPSON, PILEGGI,
EARLL, COSTA, KASUNIC, ORIE, LOGAN, ROBBINS, WONDERLING,
BOSCOLA, M. WHITE, WAUGH, WENGER, FUMO AND PIPPY,
FEBRUARY 2, 2005
SENATOR EARLL, FINANCE, AS AMENDED, APRIL 19, 2005
AN ACT
1 Amending the act of December 31, 1965 (P.L.1257, No.511),
2 entitled "An act empowering cities of the second class,
3 cities of the second class A, cities of the third class,
4 boroughs, towns, townships of the first class, townships of
5 the second class, school districts of the second class,
6 school districts of the third class and school districts of
7 the fourth class including independent school districts, to
8 levy, assess, collect or to provide for the levying,
9 assessment and collection of certain taxes subject to maximum
10 limitations for general revenue purposes; authorizing the
11 establishment of bureaus and the appointment and compensation
12 of officers, agencies and employes to assess and collect such
13 taxes; providing for joint collection of certain taxes,
14 prescribing certain definitions and other provisions for
15 taxes levied and assessed upon earned income, providing for
16 annual audits and for collection of delinquent taxes, and
17 permitting and requiring penalties to be imposed and
18 enforced, including penalties for disclosure of confidential
19 information, providing an appeal from the ordinance or
20 resolution levying such taxes to the court of quarter
21 sessions and to the Supreme Court and Superior Court,"
22 further providing for delegation of taxing powers and
23 restrictions thereon.
24 The General Assembly of the Commonwealth of Pennsylvania
25 hereby enacts as follows:
26 Section 1. Section 2 of the act of December 31, 1965
27 (P.L.1257, No.511), known as The Local Tax Enabling Act, amended
1 December 1, 2004 (P.L.1729, No.222), is amended to read:
2 Section 2. Delegation of Taxing Powers and Restrictions
3 Thereon.--The duly constituted authorities of the following
4 political subdivisions, cities of the second class, cities of
5 the second class A, cities of the third class, boroughs, towns,
6 townships of the first class, townships of the second class,
7 school districts of the second class, school districts of the
8 third class, and school districts of the fourth class, in all
9 cases including independent school districts, may, in their
10 discretion, by ordinance or resolution, for general revenue
11 purposes, levy, assess and collect or provide for the levying,
12 assessment and collection of such taxes as they shall determine
13 on persons, transactions, occupations, privileges, subjects and
14 personal property within the limits of such political
15 subdivisions, and upon the transfer of real property, or of any
16 interest in real property, situate within the political
17 subdivision levying and assessing the tax, regardless of where
18 the instruments making the transfers are made, executed or
19 delivered or where the actual settlements on such transfer take
20 place. The taxing authority may provide that the transferee
21 shall remain liable for any unpaid realty transfer taxes imposed
22 by virtue of this act. Each local taxing authority [may] shall, <--
23 by ordinance or resolution, exempt any person whose total income
24 from all sources is less than twelve thousand dollars ($12,000)
25 per annum from the per capita or similar head tax, occupation
26 tax [and emergency and municipal services tax,] or earned income <--
27 tax, or any portion thereof, and may adopt regulations for the
28 processing of claims for exemptions. EACH LOCAL TAXING AUTHORITY <--
29 SHALL BY ORDINANCE OR RESOLUTION EXEMPT ANY PERSON WHOSE TOTAL
30 INCOME FROM ALL SOURCES IS LESS THAN TWELVE THOUSAND DOLLARS
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1 ($12,000) PER ANNUM FROM THE EMERGENCY AND MUNICIPAL SERVICES
2 TAX. Such local authorities shall not have authority by virtue
3 of this act:
4 (1) To levy, assess and collect or provide for the levying,
5 assessment and collection of any tax on the transfer of real
6 property when the transfer is by will or mortgage or the
7 intestate laws of this Commonwealth or on a transfer by the
8 owner of previously occupied residential premises to a builder
9 of new residential premises when such previously occupied
10 residential premises is taken in trade by such builder as part
11 of the consideration from the purchaser of a new previously
12 unoccupied single family residential premises or on a transfer
13 between corporations operating housing projects pursuant to the
14 housing and redevelopment assistance law and the shareholders
15 thereof, or on a transfer between nonprofit industrial
16 development agencies and industrial corporations purchasing from
17 them, or on transfer to or from nonprofit industrial development
18 agencies, or on a transfer between husband and wife, or on a
19 transfer between persons who were previously husband and wife
20 but who have since been divorced; provided such transfer is made
21 within three months of the date of the granting of the final
22 decree in divorce, or the decree of equitable distribution of
23 marital property, whichever is later, and the property or
24 interest therein, subject to such transfer, was acquired by the
25 husband and wife, or husband or wife, prior to the granting of
26 the final decree in divorce, or on a transfer between parent and
27 child or the spouse of such a child, or between parent and
28 trustee for the benefit of a child or the spouse of such child,
29 or on a transfer between a grandparent and grandchild or the
30 spouse of such grandchild, or on a transfer between brother and
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1 sister or brother and brother or sister and sister or the spouse
2 of such brother or sister, or on a transfer to a conservancy
3 which possesses a tax-exempt status pursuant to section
4 501(c)(3) of the Internal Revenue Code, and which has as its
5 primary purpose the preservation of land for historic,
6 recreational, scenic, agricultural or open space opportunities,
7 by and between a principal and straw party for the purpose of
8 placing a mortgage or ground rent upon the premises, or on a
9 correctional deed without consideration, or on a transfer to the
10 United States, the Commonwealth of Pennsylvania, or to any of
11 their instrumentalities, agencies or political subdivisions, by
12 gift, dedication or deed in lieu of condemnation, or deed of
13 confirmation in connection with condemnation proceedings, or
14 reconveyance by the condemning body of the property condemned to
15 the owner of record at the time of condemnation which
16 reconveyance may include property line adjustments provided said
17 reconveyance is made within one year from the date of
18 condemnation, leases, or on a conveyance to a trustee under a
19 recorded trust agreement for the express purpose of holding
20 title in trust as security for a debt contracted at the time of
21 the conveyance under which the trustee is not the lender and
22 requiring the trustee to make reconveyance to the grantor-
23 borrower upon the repayment of the debt, or a transfer within a
24 family from a sole proprietor family member to a family farm
25 corporation, or in any sheriff sale instituted by a mortgagee in
26 which the purchaser of said sheriff sale is the mortgagee who
27 instituted said sale, or on a privilege, transaction, subject,
28 occupation or personal property which is now or does hereafter
29 become subject to a State tax or license fee;
30 (2) To levy, assess or collect a tax on the gross receipts
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1 from utility service of any person or company whose rates and
2 services are fixed and regulated by the Pennsylvania Public
3 Utility Commission or on any public utility services rendered by
4 any such person or company or on any privilege or transaction
5 involving the rendering of any such public utility service;
6 (3) Except on sales of admission to places of amusement or
7 on sales or other transfers of title or possession of property,
8 to levy, assess or collect a tax on the privilege of employing
9 such tangible property as is now or does hereafter become
10 subject to a State tax; and for the purposes of this clause,
11 real property rented for camping purposes shall not be
12 considered a place of amusement.
13 (4) To levy, assess and collect a tax on goods and articles
14 manufactured in such political subdivision or on the by-products
15 of manufacture, or on minerals, timber, natural resources and
16 farm products produced in such political subdivision or on the
17 preparation or processing thereof for use or market, or on any
18 privilege, act or transaction related to the business of
19 manufacturing, the production, preparation or processing of
20 minerals, timber and natural resources, or farm products, by
21 manufacturers, by producers and by farmers with respect to the
22 goods, articles and products of their own manufacture,
23 production or growth, or on any privilege, act or transaction
24 relating to the business of processing by-products of
25 manufacture, or on the transportation, loading, unloading or
26 dumping or storage of such goods, articles, products or by-
27 products; except that local authorities may levy, assess and
28 collect an emergency and municipal services tax and taxes on the
29 occupation, per capita and earned income or net profits of
30 natural persons engaged in the above activities whether doing
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1 business as individual proprietorship or as members of
2 partnerships or other associations;
3 (5) To levy, assess or collect a tax on salaries, wages,
4 commissions, compensation and earned income of nonresidents of
5 the political subdivisions: Provided, That this limitation (5)
6 shall apply only to school districts of the second, third and
7 fourth classes;
8 (6) To levy, assess or collect a tax on personal property
9 subject to taxation by counties or on personal property owned by
10 persons, associations and corporations specifically exempted by
11 law from taxation under the county personal property tax law:
12 Provided, That this limitation (6) shall not apply to cities of
13 the second class;
14 (7) To levy, assess or collect a tax on membership in or
15 membership dues, fees or assessment of charitable, religious,
16 beneficial or nonprofit organizations including but not limited
17 to sportsmens, recreational, golf and tennis clubs, girl and boy
18 scout troops and councils;
19 (8) To levy, assess or collect any tax on a mobilehome or
20 house trailer subject to a real property tax unless the same tax
21 is levied, assessed and collected on other real property in the
22 political subdivision.
23 (9) To levy, assess or collect any tax on individuals for
24 the privilege of engaging in an occupation (emergency and
25 municipal services tax) except that such a tax may be levied,
26 assessed and collected only by the political subdivision of the
27 taxpayer's place of employment.
28 Payment of any emergency and municipal services tax to any
29 political subdivision by any person pursuant to an ordinance or
30 resolution passed or adopted under the authority of this act
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1 shall be no [less than ten dollars ($10)] MORE THAN TWENTY-FIVE <--
2 PERCENT OF THE TAX LEVIED ON EACH PERSON FOR ANY QUARTER IN A
3 CALENDAR YEAR nor more than fifty-two dollars ($52) on each
4 person for each calendar year[.], IRRESPECTIVE OF THE NUMBER OF <--
5 POLITICAL SUBDIVISIONS WITHIN WHICH SUCH PERSON MAY BE EMPLOYED.
6 NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A TAXPAYER SHALL NOT
7 BE LIABLE FOR AN AMOUNT OF TAX IN EXCESS OF THE TAX AUTHORIZED
8 TO BE COLLECTED UNDER THIS CLAUSE. IF A MUNICIPALITY DOES NOT
9 LEVY THE EMERGENCY AND MUNICIPAL SERVICES TAX, THE SCHOOL
10 DISTRICT WHICH INCLUDES SUCH MUNICIPALITY BOUNDARIES, IN WHOLE
11 OR IN PART, MAY LEVY THE EMERGENCY AND MUNICIPAL SERVICES TAX
12 AND COLLECT NO MORE THAN TEN DOLLARS ($10) ON EACH PERSON FOR
13 EACH CALENDAR YEAR. IF A MUNICIPALITY LEVIES THE EMERGENCY AND
14 MUNICIPAL SERVICES TAX AND THE SCHOOL DISTRICT LEVIES SUCH TAX,
15 THE SCHOOL DISTRICT MAY ONLY COLLECT FIVE DOLLARS ($5) ON EACH
16 PERSON FOR EACH CALENDAR YEAR; AND, SUBJECT TO THE QUARTERLY
17 TWENTY-FIVE PERCENT LIMITATION OF THIS PARAGRAPH, THIS FIVE
18 DOLLARS ($5) PER PERSON SHALL BE PAID TO THE SCHOOL DISTRICT
19 FROM THE FUNDS LEVIED AND COLLECTED BY THE MUNICIPALITY.
20 The situs of such tax shall be the place of employment, but,
21 in the event a person is engaged in more than one occupation, or
22 an occupation which requires his working in more than one
23 political subdivision during the calendar year, the priority of
24 claim to collect such emergency and municipal services tax shall
25 be in the following order: first, the political subdivision in
26 which a person maintains his principal office or is principally
27 employed; second, the political subdivision in which the person
28 resides and works, if such a tax is levied by that political
29 subdivision; third, the political subdivision in which a person
30 is employed and which imposes the tax nearest in miles to the
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1 person's home. The place of employment shall be determined as of
2 the day the taxpayer first becomes subject to the tax [during <--
3 the calendar year. The taxing authority shall authorize payment <--
4 of the tax on a quarterly or more frequent basis.
5 It is the intent of this provision that no person shall pay
6 more than fifty-two dollars ($52) in any calendar year as an
7 emergency and municipal services tax irrespective of the number
8 of political subdivisions within which such person may be
9 employed within any given calendar year.] WITHIN A POLITICAL <--
10 SUBDIVISION.
11 In case of dispute, a tax receipt of the [taxing authority] <--
12 POLITICAL SUBDIVISION for that calendar year declaring that the <--
13 taxpayer has made prior payment which constitutes prima facie
14 certification of payment to all other political subdivisions.
15 (10) To levy, assess or collect a tax on admissions to
16 motion picture theatres: Provided, That this limitation (10)
17 shall not apply to cities of the second class.
18 (11) To levy, assess or collect a tax on the construction of
19 or improvement to residential dwellings or upon the application
20 for or issuance of permits for the construction of or
21 improvements to residential dwellings.
22 (12) To levy, assess and collect a mercantile or business
23 privilege tax on gross receipts or part thereof which are: (i)
24 discounts allowed to purchasers as cash discounts for prompt
25 payment of their bills; (ii) charges advanced by a seller for
26 freight, delivery or other transportation for the purchaser in
27 accordance with the terms of a contract of sale; (iii) received
28 upon the sale of an article of personal property which was
29 acquired by the seller as a trade-in to the extent that the
30 gross receipts in the sale of the article taken in trade does
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1 not exceed the amount of trade-in allowance made in acquiring
2 such article; (iv) refunds, credits or allowances given to a
3 purchaser on account of defects in goods sold or merchandise
4 returned; (v) Pennsylvania sales tax; (vi) based on the value of
5 exchanges or transfers between one seller and another seller who
6 transfers property with the understanding that property of an
7 identical description will be returned at a subsequent date;
8 however, when sellers engaged in similar lines of business
9 exchange property and one of them makes payment to the other in
10 addition to the property exchanged, the additional payment
11 received may be included in the gross receipts of the seller
12 receiving such additional cash payments; (vii) of sellers from
13 sales to other sellers in the same line where the seller
14 transfers the title or possession at the same price for which
15 the seller acquired the merchandise; or (viii) transfers between
16 one department, branch or division of a corporation or other
17 business entity of goods, wares and merchandise to another
18 department, branch or division of the same corporation or
19 business entity and which are recorded on the books to reflect
20 such interdepartmental transactions.
21 (13) To levy, assess or collect an amusement or admissions
22 tax on membership, membership dues, fees or assessments,
23 donations, contributions or monetary charges of any character
24 whatsoever paid by the general public, or a limited or selected
25 number thereof, for such persons to enter into any place,
26 indoors or outdoors, to engage in any activities, the
27 predominant purpose or nature of which is exercise, fitness,
28 health maintenance, improvement or rehabilitation, health or
29 nutrition education, or weight control.
30 (14) Except by cities of the second class, to levy, assess
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1 or collect a tax on payroll amounts generated as a result of
2 business activity.
3 (15) Except by cities of the second class in which a sports
4 stadium or arena that has received public funds in connection
5 with its construction or maintenance is located, to levy, assess
6 and collect a publicly funded facility usage fee upon those
7 nonresident individuals who use such facility to engage in an
8 athletic event or otherwise render a performance for which they
9 receive remuneration.
10 (16) To levy, assess or collect an amusement or admissions
11 tax on the charge imposed upon a patron for the sale of
12 admission to or for the privilege of admission to a bowling
13 alley or bowling lane to engage in one or more games of bowling.
14 SECTION 2. SECTION 9 OF THE ACT, AMENDED DECEMBER 12, 1968 <--
15 (P.L.1203, NO.377), IS AMENDED TO READ:
16 SECTION 9. REGISTER FOR EARNED INCOME AND [OCCUPATIONAL
17 PRIVILEGE] EMERGENCY AND MUNICIPAL SERVICES TAXES.--IT SHALL BE
18 THE DUTY OF THE DEPARTMENT OF COMMUNITY AFFAIRS TO HAVE
19 AVAILABLE AN OFFICIAL CONTINUING REGISTER SUPPLEMENTED ANNUALLY
20 OF ALL EARNED INCOME AND [OCCUPATIONAL PRIVILEGE] EMERGENCY AND
21 MUNICIPAL SERVICES TAXES LEVIED UNDER AUTHORITY OF THIS ACT. THE
22 REGISTER AND ITS SUPPLEMENTS, HEREINAFTER REFERRED TO AS THE
23 REGISTER, SHALL LIST SUCH JURISDICTIONS LEVYING EARNED INCOME
24 AND/OR [OCCUPATIONAL PRIVILEGE] EMERGENCY AND MUNICIPAL SERVICES
25 TAXES, THE RATE OF THE TAX AS STATED IN THE TAX LEVYING
26 ORDINANCE OR RESOLUTION, AND THE EFFECTIVE RATE ON RESIDENT AND
27 NONRESIDENT TAXPAYERS, IF DIFFERENT FROM THE STATED RATE BECAUSE
28 OF A COTERMINOUS LEVY, THE NAME AND ADDRESS OF THE OFFICER
29 RESPONSIBLE FOR ADMINISTERING THE COLLECTION OF THE TAX AND FROM
30 WHOM INFORMATION, FORMS FOR REPORTING AND COPIES OF RULES AND
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1 REGULATIONS ARE AVAILABLE. WITH EACH JURISDICTION LISTED, ALL
2 JURISDICTIONS MAKING COTERMINOUS LEVIES SHALL ALSO BE NOTED AND
3 THEIR TAX RATES SHOWN.
4 INFORMATION FOR THE REGISTER SHALL BE FURNISHED BY THE
5 SECRETARY OF EACH TAXING BODY TO THE DEPARTMENT OF COMMUNITY
6 AFFAIRS IN SUCH MANNER AND ON SUCH FORMS AS THE DEPARTMENT OF
7 COMMUNITY AFFAIRS MAY PRESCRIBE. THE INFORMATION MUST BE
8 RECEIVED BY THE DEPARTMENT OF COMMUNITY AFFAIRS BY CERTIFIED
9 MAIL NOT LATER THAN MAY 31 OF EACH YEAR TO SHOW NEW TAX
10 ENACTMENTS, REPEALS AND CHANGES. FAILURE TO COMPLY WITH THIS
11 DATE FOR FILING MAY RESULT IN THE OMISSION OF THE LEVY FROM THE
12 REGISTER FOR THAT YEAR. FAILURE OF THE DEPARTMENT OF COMMUNITY
13 AFFAIRS TO RECEIVE INFORMATION OF TAXES CONTINUED WITHOUT CHANGE
14 MAY BE CONSTRUED BY THE DEPARTMENT TO MEAN THAT THE INFORMATION
15 CONTAINED IN THE PREVIOUS REGISTER REMAINS IN FORCE.
16 THE DEPARTMENT OF COMMUNITY AFFAIRS SHALL HAVE THE REGISTER
17 WITH SUCH ANNUAL SUPPLEMENTS AS MAY BE REQUIRED BY NEW TAX
18 ENACTMENTS, REPEALS OR CHANGES AVAILABLE UPON REQUEST NOT LATER
19 THAN JULY 1 OF EACH YEAR. THE EFFECTIVE PERIOD FOR EACH REGISTER
20 SHALL BE FROM JULY 1 OF THE YEAR IN WHICH IT IS ISSUED TO JUNE
21 30 OF THE FOLLOWING YEAR.
22 EMPLOYERS SHALL NOT BE REQUIRED BY ANY LOCAL ORDINANCE TO
23 WITHHOLD FROM THE WAGES, SALARIES, COMMISSIONS OR OTHER
24 COMPENSATION OF THEIR EMPLOYES ANY TAX IMPOSED UNDER THE
25 PROVISIONS OF THIS ACT, WHICH IS NOT LISTED IN THE REGISTER, OR
26 MAKE REPORTS OF WAGES, SALARIES, COMMISSIONS OR OTHER
27 COMPENSATION IN CONNECTION WITH TAXES NOT SO LISTED: PROVIDED,
28 THAT IF THE REGISTER IS NOT AVAILABLE BY JULY 1, THE REGISTER OF
29 THE PREVIOUS YEAR SHALL CONTINUE TEMPORARILY IN EFFECT FOR AN
30 ADDITIONAL PERIOD NOT TO EXCEED ONE YEAR. THE PROVISIONS OF THIS
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1 SECTION SHALL NOT AFFECT THE LIABILITY OF ANY TAXPAYER FOR TAXES
2 LAWFULLY IMPOSED UNDER THIS ACT.
3 ORDINANCES OR RESOLUTIONS IMPOSING EARNED INCOME OR
4 [OCCUPATIONAL PRIVILEGE] EMERGENCY AND MUNICIPAL SERVICES TAXES
5 UNDER AUTHORITY OF THIS ACT MAY CONTAIN PROVISIONS REQUIRING
6 EMPLOYERS DOING BUSINESS WITHIN THE JURISDICTION OF THE
7 POLITICAL SUBDIVISION IMPOSING THE TAX TO WITHHOLD THE TAX FROM
8 THE COMPENSATION OF THOSE OF THEIR EMPLOYES WHO ARE SUBJECT TO
9 THE TAX: PROVIDED, THAT NO EMPLOYER SHALL BE HELD LIABLE FOR
10 FAILURE TO WITHHOLD EARNED INCOME TAXES OR FOR THE PAYMENT OF
11 SUCH WITHHELD TAX MONEY TO A POLITICAL SUBDIVISION OTHER THAN
12 THE POLITICAL SUBDIVISION ENTITLED TO RECEIVE SUCH MONEY IF SUCH
13 FAILURE TO WITHHOLD OR SUCH INCORRECT TRANSMITTAL OF WITHHELD
14 TAXES ARISES FROM INCORRECT INFORMATION AS TO THE EMPLOYE'S
15 PLACE OF RESIDENCE SUBMITTED BY THE EMPLOYE: AND PROVIDED
16 FURTHER, THAT EMPLOYERS SHALL NOT BE REQUIRED BY ANY LOCAL
17 ORDINANCE TO WITHHOLD FROM COMPENSATION FOR ANY ONE OF THEIR
18 EMPLOYES FOR THE [OCCUPATIONAL PRIVILEGE] EMERGENCY AND
19 MUNICIPAL SERVICES TAX MORE THAN ONE TIME IN ANY [FISCAL PERIOD]
20 QUARTER OF THE CALENDAR YEAR, AND SHALL NOT BE REQUIRED TO REMIT
21 SUCH TAX UNTIL THIRTY (30) DAYS AFTER THE END OF SUCH QUARTER OF
22 A CALENDAR YEAR: AND PROVIDED FURTHER, THAT THE [OCCUPATIONAL
23 PRIVILEGE] EMERGENCY AND MUNICIPAL SERVICES TAX SHALL BE
24 APPLICABLE TO EMPLOYMENT IN THE PERIOD BEGINNING JANUARY 1, OF
25 THE CURRENT YEAR AND ENDING DECEMBER 31 OF THE CURRENT YEAR,
26 EXCEPT THAT TAXES IMPOSED FOR THE FIRST TIME SHALL BECOME
27 EFFECTIVE FROM THE DATE SPECIFIED IN THE ORDINANCE OR
28 RESOLUTION, AND THE TAX SHALL CONTINUE IN FORCE ON A CALENDAR
29 YEAR BASIS.
30 Section 2 3. This act shall apply to taxes levied for tax <--
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1 years commencing on or after January 1, 2005 2006. <--
2 Section 3 4. This act shall take effect in 60 days JANUARY <--
3 1, 2006.
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