PRINTER'S NO. 951
No. 819 Session of 2001
INTRODUCED BY CORMAN, LEMMOND, MOWERY, PUNT, THOMPSON, WAUGH AND
M. WHITE, MAY 2, 2001
REFERRED TO FINANCE, MAY 2, 2001
AN ACT
1 Amending Title 53 (Municipalities Generally) of the Pennsylvania
2 Consolidated Statutes, authorizing counties to impose sales
3 and use tax; authorizing municipalities to impose personal
4 income and earned income and net profits taxes; empowering
5 municipalities and school districts to require county sales
6 and use taxes; authorizing school districts to impose taxes
7 on personal income; providing for the levying, assessment and
8 collection of such taxes; and providing for the powers and
9 duties of the Department of Community and Economic
10 Development, the Department of Revenue and the State
11 Treasurer.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Sections 8401, 8402(a) and (b), 8404, 8701, 8702
15 and 8703 of Title 53 of the Pennsylvania Consolidated Statutes
16 are amended to read:
17 § 8401. Definitions.
18 The following words and phrases when used in this subpart
19 shall have the meanings given to them in this section unless the
20 context clearly indicates otherwise:
21 "Board of county commissioners." Includes the successor in
22 function to the board of county commissioners in a county which
1 has adopted a home rule charter under Subpart E of Part III
2 (relating to home rule and optional plan government), but does
3 not include the city council of a city of the first class.
4 Budgeted revenue." Local tax revenue, except the term does
5 not include revenue from:
6 (1) Delinquent taxes.
7 (2) Payments in lieu of taxes.
8 (3) The real estate transfer tax.
9 (4) The distribution of the Public Utility Realty Tax,
10 commonly known as PURTA.
11 (5) A mercantile or business privilege tax on gross
12 receipts.
13 (6) An amusement or admissions tax.
14 "Business." As defined in section 301 of the act of March 4,
15 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
16 "Compensation." As defined in section 301 of the act of
17 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
18 1971.
19 "County." A county-level municipality within this
20 Commonwealth, regardless of classification. The term includes a
21 county which has adopted a home rule charter or optional plan of
22 government under Subpart E of Part III (relating to home rule
23 and optional plan government). The term does not include a
24 county of the first class.
25 "Current year." The calendar year or the fiscal year for
26 which the tax is levied.
27 "Department." The Department of Revenue of the Commonwealth.
28 "Domicile." As defined in section 13 of the act of December
29 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
30 Act.
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1 "Dwelling." A structure used as a place of habitation by a
2 natural person.
3 "Earned income." The classes of income defined as earned
4 income in section 13 of the act of December 31, 1965 (P.L.1257,
5 No.511), known as The Local Tax Enabling Act.
6 "Election officials." The county board of elections of each
7 county.
8 "Employer." As defined in section 301 of the act of March 4,
9 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
10 "Governing body." [A board of school directors of a school
11 district.] The board of county commissioners, including the
12 successor in function to the board of county commissioners in a
13 county which has adopted a home rule charter under Subpart E of
14 Part III (relating to home rule and optional plan government),
15 city council, borough council, incorporated town council, board
16 of township commissioners, board of township supervisors, a
17 governing council of a home rule municipality or optional plan
18 municipality, a governing council of any similar general purpose
19 unit of government which may hereafter be created by statute, or
20 a board of school directors of a school district. The term does
21 not include the city council of a city of the first class.
22 "Home rule municipality." A city, borough, incorporated town
23 or township which has adopted a home rule charter under Subpart
24 E of Part III (relating to home rule and optional plan
25 government).
26 "Homestead." A dwelling, including the parcel of land on
27 which the dwelling is located and the other improvements located
28 on the parcel for which any of the following apply:
29 (1) The dwelling is primarily used as the domicile of an
30 owner who is a natural person. The homestead for real
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1 property qualifying under this paragraph shall not include
2 the land on which the dwelling is located if the land is not
3 owned by a person who owns the dwelling.
4 (2) The dwelling is a unit in a condominium as the term
5 is defined in 68 Pa.C.S. § 3103 (relating to definitions) and
6 the unit is primarily used as the domicile of a natural
7 person who is an owner of the unit; or the dwelling is a unit
8 in a cooperative as the term is defined in 68 Pa.C.S. § 4103
9 (relating to definitions) and the unit is primarily used as
10 the domicile of a natural person who is an owner of the unit.
11 The homestead for a unit in a condominium or a cooperative
12 shall be limited to the assessed value of the unit, which
13 shall be determined in a manner consistent with the
14 assessment of real property taxes on those units under 68
15 Pa.C.S. (relating to real and personal property) or as
16 otherwise provided by law. If the unit is not separately
17 assessed for real property taxes, the homestead shall be a
18 pro rata share of the real property.
19 (3) The dwelling does not qualify under paragraphs (1)
20 and (2) and a portion of the dwelling is used as the domicile
21 of an owner who is a natural person. The homestead for real
22 property qualifying under this paragraph shall be the portion
23 of the real property that is equal to the portion of the
24 dwelling that is used as the domicile of an owner.
25 "Homestead property." A homestead for which an application
26 has been submitted and approved under section 8584 (relating to
27 administration and procedure).
28 "Inverse per capita income." A factor determined by dividing
29 the integer one by the per capita income of the municipality, as
30 determined by the most recent survey by the Department of
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1 Community and Economic Development.
2 "Local Tax Enabling Act." The act of December 31, 1965
3 (P.L.1257, No.511), known as The Local Tax Enabling Act.
4 "Local tax revenue." The revenue from taxes actually levied
5 and assessed by a county, municipality or school district. The
6 term does not include interest or dividend earnings, Federal or
7 State grants, contracts or appropriations, income generated from
8 operations or any other source that is revenue not derived from
9 taxes levied and assessed by a county, municipality or school
10 district.
11 "Municipality." [As defined in 1 Pa.C.S. § 1991 (relating to
12 definitions).] A city of the second class, city of the second
13 class A, city of the third class, borough, incorporated town,
14 township of the first class, township of the second class, home
15 rule municipality, optional plan municipality, optional form
16 municipality or similar general purpose unit of government which
17 may hereafter be created by statute, except a city of the first
18 class.
19 "Net profits." The classes of income defined as net profits
20 in section 13 of the act of December 31, 1965 (P.L.1257,
21 No.511), known as The Local Tax Enabling Act.
22 "Optional plan municipality." A city, borough, incorporated
23 town or township which has adopted an optional plan of
24 government under Subpart E of Part III (relating to home rule
25 and optional plan government).
26 "Owner." Includes any of the following:
27 (1) A joint tenant or tenant in common.
28 (2) A person who is purchasing real property under a
29 contract.
30 (3) A partial owner.
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1 (4) A person who owns real property as a result of being
2 a beneficiary of a will or trust or as a result of intestate
3 succession.
4 (5) A person who owns or is purchasing a dwelling on
5 leased land.
6 (6) A person holding a life lease in real property
7 previously sold or transferred to another.
8 (7) A person in possession under a life estate.
9 (8) A grantor who has placed the real property in a
10 revocable trust.
11 (9) A member of a cooperative as defined in 68 Pa.C.S. §
12 4103 (relating to definitions).
13 (10) A unit owner of a condominium as defined in 68
14 Pa.C.S. § 3103 (relating to definitions).
15 (11) A partner of a family farm partnership or a
16 shareholder of a family farm corporation as the terms are
17 defined in section 1101-C of the act of March 4, 1971 (P.L.6,
18 No.2), known as the Tax Reform Code of 1971.
19 "Personal income." Income enumerated in section 303 of the
20 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
21 of 1971, as returned to and ascertained by the Department of
22 Revenue, subject, however, to any correction thereof for fraud,
23 evasion or error as finally ascertained by the Commonwealth.
24 "Political subdivision." As defined in 1 Pa.C.S. § 1991
25 (relating to definitions).
26 "Preceding year." The calendar year or fiscal year before
27 the current year.
28 "Primarily used." Usage of at least 51% of the square
29 footage of a dwelling.
30 "Relative tax effort." The total tax revenues from all
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1 sources of a municipality as reported to the Department of
2 Community and Economic Development, divided by the total tax
3 revenues from all sources from all municipalities in the county.
4 "Resident individual." An individual who is domiciled in a
5 municipality or a school district.
6 "School district." A school district of the first class A,
7 second class, third class or fourth class, including any
8 independent school district.
9 "Statewide average weekly wage." That amount determined
10 annually for each calendar year by the Department of Labor and
11 Industry under section 105.1 of the act of June 2, 1915
12 (P.L.736, No.338), known as the Workers' Compensation Act.
13 "Succeeding year." The calendar year or fiscal year
14 following the current year.
15 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
16 known as the Tax Reform Code of 1971.
17 "Taxpayer." An individual required under this subpart to
18 file a tax return or to pay a tax.
19 "Weighted formula." A formula dividing an allocation into
20 thirds, with one-third based on relative population, one-third
21 based on relative tax effort and one-third based on the relative
22 inverse per capita income.
23 § 8402. Scope and limitations.
24 (a) General rule.--Except as provided in subsections (b),
25 (c), (d), (e) and (f) and section 8405 (relating to
26 applicability), it is the intent of this subpart to confer upon
27 each county, municipality and school district the power to levy,
28 assess and collect [an earned income and net profits tax] taxes
29 upon the subjects of taxation as set forth in this subpart.
30 (b) Real estate transfer taxes.--This subpart does not
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1 affect the powers of a municipality or school district to levy,
2 assess and collect a real estate transfer tax, including any
3 real estate transfer tax levied under the authority of section
4 652.1(a)(4) of the act of March 10, 1949 (P.L.30, No.14), known
5 as the Public School Code of 1949.
6 * * *
7 § 8404. Certain rates of taxation limited.
8 If a municipality and school district both impose an earned
9 income and net profits tax on the same individual under the
10 Local Tax Enabling Act and the municipality and school district
11 are limited to or have agreed upon a division of the tax rate in
12 accordance with section 8 of the Local Tax Enabling Act, then
13 the municipality and school district that [continues] continue
14 to levy the earned income and net profits tax under the Local
15 Tax Enabling Act shall remain subject to that limitation or
16 agreement in the event that [the school district] one or the
17 other opts to impose an earned income and net profits tax under
18 section 8711 (relating to earned income and net profits tax) or
19 8742 (relating to local personal income tax).
20 § 8701. General tax authorization.
21 (a) General rule.--Subject to sections 8703 (relating to
22 adoption of referendum) and 8704 (relating to public referendum
23 requirements for increasing property taxes previously reduced)
24 and except as provided in subsection (b), each county,
25 municipality and school district shall have the power and may by
26 ordinance or resolution levy, assess and collect or provide for
27 the levying, assessment and collection of the [earned income and
28 net profits tax under] taxes on the subjects specified in this
29 chapter.
30 (b) Exclusions.--No county, municipality or school district
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1 which levies [an earned income and net profits] a tax authorized
2 by this chapter shall have any power or authority to levy,
3 assess or collect:
4 (1) A tax based upon a flat rate or on a millage rate on
5 an assessed valuation of a particular trade, occupation or
6 profession, commonly known as an occupation tax.
7 (2) A tax at a set or flat rate upon persons employed
8 within the taxing district, commonly known as an occupational
9 privilege tax.
10 (3) A per capita, poll, residence or similar head tax.
11 (4) The earned income and net profits tax levied under
12 the Local Tax Enabling Act.
13 (5) An earned income tax under the act of August 24,
14 1961 (P.L.1135, No.508), referred to as the First Class A
15 School District Earned Income Tax Act, or under the
16 additional authority in section 652.1(a)(2) of the act of
17 March 10, 1949 (P.L.30, No.14), known as the Public School
18 Code of 1949.
19 (6) Any tax under section 652.1(a)(4) of the Public
20 School Code of 1949 except as it pertains to real estate
21 transfer taxes.
22 (7) Except for taxes permitted under section 8402(b)
23 (relating to scope and limitations), (c), (d), (e) and (f),
24 any other tax authorized or permitted under the Local Tax
25 Enabling Act.
26 (c) Delinquent taxes.--The provisions of subsection (b)
27 shall not apply to collection of delinquent taxes.
28 § 8702. Continuity of tax.
29 [The earned income and net profits]A tax levied under the
30 provisions of this chapter shall continue in force on a fiscal
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1 year basis without annual reenactment unless the rate of tax is
2 increased or the tax is subsequently repealed.
3 § 8703. Adoption of referendum.
4 (a) General rule.--
5 (1) In order to levy [an earned income and net profits]
6 a tax under this chapter, a governing body
7 shall use the procedures set forth in subsection (b). (2)
8 Any governing body after making an election to levy [an
9 earned income and net profits] a tax under this chapter may,
10 after a period of at least three full fiscal years, elect under
11 the provisions of subsection (c) to levy, assess and collect the
12 taxes prohibited by section 8701(b) (relating to general tax
13 authorization) to the extent otherwise provided by law. If the
14 electorate approves such referendum, the governing body shall
15 lose the authority to continue to levy [an earned income and net
16 profits] a tax authorized under this chapter.
17 (b) Public referendum requirements.--Subject to the notice
18 and public hearing requirements of section 8716 (relating to
19 procedure and administration), a governing body may levy [the
20 earned income and net profits] a tax under this chapter only by
21 obtaining the approval of the electorate of the affected county,
22 municipality or school district in a public referendum at only
23 the municipal election preceding the fiscal year when the
24 [earned income and net profits] tax will be initially imposed.
25 The referendum question must state the initial rate of the
26 proposed [earned income and net profits] tax, the reason for the
27 tax and the amount of proposed budgeted revenue growth, if any,
28 in the first fiscal year following adoption of the referendum,
29 expressed as a percent increase over the prior year's budgeted
30 revenue. Any increase in budgeted revenue between the first
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1 fiscal year following adoption of the referendum and the prior
2 year's budgeted revenue shall not exceed the annual percent
3 change in the Statewide average weekly wage. The question shall
4 be in clear language that is readily understandable by a
5 layperson. For the purpose of illustration, a referendum
6 question may be framed as follows:
7 Do you favor the imposition of an [earned income and net
8 profits tax of] X% (name of tax) to be used to replace
9 (names of local taxes to be repealed), reduce real
10 property taxes by X% by means of a homestead exclusion
11 and provide for a one-time revenue increase of X% over
12 the preceding fiscal year?
13 A nonlegal interpretative statement must accompany the question
14 in accordance with section 201.1 of the act of June 3, 1937
15 (P.L.1333, No.320), known as the Pennsylvania Election Code,
16 that includes the following: the initial rate of the [earned
17 income and net profits] tax and the maximum allowable rate of
18 the [earned income and net profits] tax imposed under this
19 chapter; the estimated revenues to be derived from the initial
20 rate of the [earned income and net profits] tax imposed under
21 this chapter; the amount of proposed revenue growth, if any, in
22 the first fiscal year following adoption of the referendum; the
23 estimated reduction in real property taxes and the elimination
24 of certain existing taxes under this chapter; the identification
25 of the existing taxes to be eliminated under this chapter; the
26 method to be used to reduce real property taxes; the class or
27 classes of real property for which real property taxes would be
28 reduced; and the estimated amount of real property tax reduction
29 by class, expressed as an average percent reduction by class.
30 Any governing body which uses the procedures under this section
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1 shall not be subject to the provisions of section 8704 (relating
2 to public referendum requirements for increasing property taxes
3 previously reduced) for any future increases in the [earned
4 income and net profits] tax rates authorized under this chapter.
5 Any future real property tax rate increases are subject to the
6 provisions of section 8704. If the ballot question fails to
7 receive a majority vote pursuant to this section, approval of
8 the electorate under section 8704 shall not be required to
9 increase the rate of any tax which the governing body of the
10 affected school district is authorized to levy and increase
11 pursuant to any other act.
12 (c) Public referendum requirements to end participation
13 under this chapter.--Subject to the notice and public hearing
14 requirements in section 4 of the Local Tax Enabling Act, a
15 governing body may elect to end participation under this chapter
16 in accordance with subsection (a)(2) by obtaining the approval
17 of the electorate of the affected county, municipality or school
18 district in a public referendum at a municipal election.
19 (d) Public requirements to initiate referendum.--
20 (1) If the governing body of a county municipality or
21 school district fails to place a referendum question on the
22 ballot within two years after the effective date of this
23 chapter, the electors of the county, municipality or school
24 district may:
25 (i) Circulate a petition which, if signed by
26 electors comprising 2% of the number of electors voting
27 for the office of Governor in the last gubernatorial
28 election in the county, municipality or school district
29 and filed with the election officials and submitted to
30 the governing body thereof, shall require the governing
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1 body to establish a local tax study commission. The
2 provisions under paragraph (2)(v), (vi), (vii), (viii)
3 (ix) and (x) shall not apply to this subparagraph.
4 (ii) If the local tax study commission makes a
5 recommendation to levy [the earned income and net
6 profits] a tax under this chapter and the governing body
7 fails to place the recommendation or other alternative of
8 the governing body authorized under this chapter on the
9 ballot in accordance with this chapter at the next
10 municipal election occurring at least 90 days after the
11 submission of the recommendation to the governing body, a
12 petition under this paragraph may be circulated. If the
13 petition is signed by the electors comprising 5% of the
14 number of electors voting for the office of Governor in
15 the last gubernatorial election in the county,
16 municipality or school district and filed with election
17 officials at least 90 days prior to the next municipal
18 election, the petition shall compel the election
19 officials to place the recommendation upon the ballot at
20 the next municipal election occurring at least 90 days
21 after the filing of the petition.
22 (2) The following requirements shall apply to the
23 process under paragraph (1):
24 (i) The name and street address of each elector
25 signing the petition and of the person filing the
26 petition shall be clearly stated on the petition. The
27 petition shall include an affidavit of the circulator
28 that he or she is a qualified elector of the county,
29 municipality or school district referred to in the
30 petition; that the signers signed with full knowledge of
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1 the contents of the petition; that the signers'
2 residences are correctly stated; and that, to the best of
3 the circulator's knowledge and belief, the signers are
4 qualified electors.
5 (ii) The election officials shall, within ten days
6 after filing, review the petition as to the number and
7 qualifications of signers. If the petition appears to be
8 defective, the election officials shall immediately
9 notify the person filing the petition of the defect and
10 may reject the petition if warranted.
11 (iii) The petition as submitted to the election
12 officials, along with the list of signatories, shall be
13 open to public inspection in the office of the election
14 officials.
15 (iv) If the election officials find that the
16 petition as submitted is in proper order, they shall send
17 copies of the petition without signatures thereon to the
18 governing body involved.
19 (v) The procedure for the referendum shall be
20 governed by the act of June 3, 1937 (P.L.1333, No.320),
21 known as the Pennsylvania Election Code.
22 (vi) If the election officials find the petition
23 meets the requirements of this chapter, they shall place
24 the proposal on the ballot in a manner fairly
25 representing the content of the petition for decision by
26 referendum at the proper election.
27 (vii) The election officials shall certify the date
28 for the referendum and shall notify the governing body at
29 least 30 days prior to such date.
30 (viii) At least 30 days' notice of the referendum
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1 shall be given by proclamation of the governing body. A
2 copy of the proclamation shall be posted at each polling
3 place on the day of the election and shall be published
4 once in at least one newspaper of general circulation
5 which is distributed within the county, municipality or
6 school district during the 30-day period prior to the
7 election.
8 (ix) Approval of a referendum shall be by majority
9 vote of those voting in the county, municipality or
10 school district involved.
11 (x) The election officials shall certify the results
12 of the referendum to the governing body.
13 (e) School districts located in more than one county.--
14 (1) In the event a school district is located in more
15 than one county, petitions under this section shall be filed
16 with the election officials of the county wherein the
17 administrative offices of the school district are located.
18 (2) The election officials receiving a petition shall be
19 responsible for all administrative functions in reviewing and
20 certifying the validity of the petition and for making all
21 necessary communications with the school district.
22 (3) If the election officials of the county receiving
23 the petition certify that it is sufficient under this subpart
24 and determine that a question should be placed upon the
25 ballot, such decision shall be communicated to election
26 officials in any other county in which the school district is
27 also located. Election officials in the other county or
28 counties shall cooperate with election officials of the
29 county receiving the petition to insure that an identical
30 question is placed on the ballot at the same election
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1 throughout the entire school district.
2 (4) Election officials from each county involved shall
3 independently certify the results from their county to the
4 governing body.
5 Section 2. Sections 8705, 8706, 8711, 8712, 8713(b), 8714,
6 8715, 8716 and 8717 of Title 53 are amended to read:
7 § 8705. Local tax study commission.
8 (a) Appointment.--A governing body may appoint a local tax
9 study commission.
10 (b) Membership.--The local tax study commission shall
11 consist of five members who are resident individuals or
12 taxpayers of the county, municipality or school district and
13 shall reflect the socioeconomic, age and occupational diversity
14 of the county, municipality or school district to the extent
15 possible.
16 (1) Except for paragraph (2), no member shall be an
17 official or employee, or a relative thereof, of the county,
18 municipality or school district.
19 (2) One member may be a member of the governing body.
20 (c) Staff and expenses.--The governing body shall provide
21 necessary and reasonable support staff and shall reimburse the
22 members of the local tax study commission for necessary and
23 reasonable expenses in the discharge of their duties.
24 (d) Contents of study.--The local tax study commission shall
25 study the existing taxes levied, assessed and collected by the
26 county, municipality or school district and their effect. The
27 local tax study commission shall determine how the tax policies
28 of the county, municipality or school district could be improved
29 by the levy, assessment and collection of the taxes authorized
30 pursuant to this chapter. The study shall include, but not be
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1 limited to, consideration of all of the following:
2 (1) Historic and present rates of and revenue from taxes
3 currently levied, assessed and collected.
4 (2) The age, income, employment and property use
5 characteristics of the existing tax base.
6 (3) Projected revenues of taxes currently levied,
7 assessed and collected, including taxes authorized and taxes
8 not levied under this chapter.
9 (e) Recommendation.--Within 90 days of its appointment, the
10 local tax study commission shall make a nonbinding
11 recommendation to the governing body regarding the imposition of
12 [an earned income and net profits tax] the tax or taxes to be
13 levied, assessed and collected commencing the next fiscal year.
14 Except as provided in subsection (f), if the governing body
15 appoints a commission, [the earned income and net profits tax]
16 taxes authorized under this chapter may not be levied, assessed
17 or collected until receipt of the recommendation. No later than
18 90 days prior to the next municipal election occurring at least
19 150 days after the submission of the recommendation, the
20 governing body shall accept or reject the recommendation of the
21 local tax study commission or adopt an alternative proposal
22 authorized under this chapter.
23 (f) Failure to issue a recommendation.--If the local tax
24 study commission fails to make a recommendation under subsection
25 (e), the governing body may adopt a proposal authorized under
26 this chapter.
27 (g) Public distribution of report.--The local tax study
28 commission shall publish a final report of its findings and
29 recommendation and deliver the report to the governing body. The
30 governing body shall supply copies to any interested persons
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1 upon request.
2 (h) Materials.--All records of the local tax study
3 commission shall be available for public inspection during the
4 regular business hours of the county, municipality or school
5 district.
6 § 8706. Property tax limits on reassessment.
7 After any county makes a countywide revision of assessment of
8 real property at values based upon an established predetermined
9 ratio as required by law or after any county changes its
10 established predetermined ratio, each county, municipality or
11 school district that has made an election under section 8703
12 (relating to adoption of referendum), which hereafter for the
13 first time levies its real estate taxes on that revised
14 assessment or valuation, shall for the first year reduce its tax
15 rate, if necessary, for the purpose of having the percentage
16 increase in taxes levied for that year against the real
17 properties contained in the duplicate for the preceding year be
18 less than or equal to the percentage increase in the Statewide
19 average weekly wage for the preceding year notwithstanding the
20 increased valuations of such properties under the revised
21 assessment. For the purpose of determining the total amount of
22 taxes to be levied for the first year, the amount to be levied
23 on newly constructed buildings or structures or on increased
24 valuations based on new improvements made to existing houses
25 need not be considered. The tax rate shall be fixed for that
26 year at a figure which will accomplish this purpose. The
27 provisions of section 8704 (relating to public referendum
28 requirements for increasing property taxes previously reduced)
29 shall apply to increases in the tax rate above the limits
30 provided in this section.
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1 § 8711. Earned income and net profits tax.
2 A municipality and a school district shall have the power to
3 levy, assess and collect a tax on the earned income and net
4 profits of resident individuals of the municipality or school
5 district up to a maximum rate of 1.5%. The earned income and net
6 profits tax may be levied by the municipality and the school
7 district at a rate of 1.0%, 1.25% or 1.5%.
8 § 8712. Collections.
9 Any municipality or school district imposing a tax under
10 section 8711 (relating to earned income and net profits tax)
11 shall designate the tax officer who is appointed under section
12 10 of the Local Tax Enabling Act, or otherwise by law, as the
13 collector of the earned income and net profits tax. In the
14 performance of the tax collection duties under this subchapter,
15 the designated tax officer shall have all the same powers,
16 rights, responsibilities and duties for the collection of the
17 taxes which may be imposed under the Local Tax Enabling Act,
18 Subchapter C of Chapter 84 (relating to local taxpayers bill of
19 rights) or as otherwise provided by law.
20 § 8713. Credits.
21 * * *
22 (b) State tax credit.--A credit against personal income tax
23 due to the Commonwealth under section 302 of the Tax Reform Code
24 shall be granted to all nonresidents of a city of the first
25 class who are subject to a tax imposed by a city of the first
26 class pursuant to the act of August 5, 1932 (Sp.Sess., P.L.45,
27 No.45), referred to as the Sterling Act. The credit shall equal
28 0.2756% of salaries, wages, commissions, compensation or other
29 income received for work done or services performed within a
30 city of the first class. The Secretary of Revenue shall
20010S0819B0951 - 19 -
1 promulgate such regulations and forms as are necessary to
2 implement the provisions of this subsection. This section shall
3 only apply to residents of municipalities and school districts
4 which impose the tax under this subchapter. A governing body of
5 a school district in a county of the second class A shall, and a
6 governing body of a school district in a county of the third
7 class may, include in the referendum question under section 8703
8 (relating to adoption of referendum) language asking whether the
9 credit against the personal income tax in this subsection should
10 be provided to the nonresident taxpayer in the city of the first
11 class or the school district in which the taxpayer resides for
12 the purpose of making additional tax reductions in the same
13 manner as section 8717 (relating to disposition of earned income
14 and net profits tax revenue). Should any court of competent
15 jurisdiction determine that this subsection is unconstitutional,
16 the provisions of this subsection shall be void and no credit
17 shall be expanded or extended in any way by any court.
18 § 8714. Earned income and net profits tax exemption.
19 A municipality or school district that imposes an earned
20 income and net profits tax under this chapter may exempt from
21 the payment of that tax any person whose total income from all
22 sources is less than $7,500.
23 § 8715. Rules and regulations.
24 Taxes imposed under section 8711 (relating to earned income
25 and net profits tax) will be subject to all regulations adopted
26 under section 13 of the Local Tax Enabling Act. A municipality
27 or school district may adopt regulations for the processing of
28 claims for credits or exemptions under sections 8713 (relating
29 to credits) and 8714 (relating to earned income and net profits
30 tax exemption).
20010S0819B0951 - 20 -
1 § 8716. Procedure and administration.
2 In order to levy the tax under section 8711 (relating to
3 earned income and net profits tax), the governing body shall
4 adopt [a] an ordinance or a resolution which shall refer to this
5 subchapter prior to placing a question on the ballot under
6 section 8703 (relating to adoption of referendum). Prior to
7 adopting [a] an ordinance or a resolution imposing the tax
8 authorized by section 8711, the governing body shall give public
9 notice of its intent to adopt the ordinance or a resolution in
10 the manner provided by section 4 of the Local Tax Enabling Act
11 and shall conduct at least one public hearing regarding the
12 proposed adoption of the ordinance or resolution.
13 § 8717. Disposition of earned income and net profits tax
14 revenue.
15 The disposition of revenue from an earned income and net
16 profits tax or an increase in the rate of an earned income and
17 net profits tax imposed by municipalities and school districts
18 under the authority of this chapter shall occur in the following
19 manner:
20 (1) For the fiscal year of implementation of a newly
21 imposed income tax, all earned income and net profits tax
22 revenue received by a municipality or school district shall
23 be used first to offset any lost revenue to the municipality
24 or school district from the taxes prohibited under section
25 8701(b) (relating to general tax authorization) in an amount
26 equal to the revenue collected from the prohibited taxes in
27 section 8701(b) in the preceding fiscal year; second, to
28 provide for an increase in budgeted revenues over the
29 preceding fiscal year in accordance with the amount specified
30 in the referendum question approved by the voters under
20010S0819B0951 - 21 -
1 section 8703 (relating to adoption of referendum); and third,
2 to reduce the municipal or school district real property tax
3 in the following order:
4 (i) By means of an exclusion for homestead property
5 pursuant to section 8583 (relating to exclusion for
6 homestead property).
7 (ii) By means of a reduction in the millage rate
8 after the limit on the exclusion for homestead property
9 has been reached under section 8586 (relating to
10 limitations).
11 (2) For the fiscal year of implementation of an increase
12 in the rate of the existing earned income and net profits tax
13 imposed under this chapter, all revenue received by a
14 municipality or school district directly attributable to the
15 increased rate shall be used to reduce the municipal or
16 school district real property tax in the following order:
17 (i) By means of an exclusion for homestead property
18 pursuant to section 8583.
19 (ii) By means of a reduction in the millage rate
20 after the limit on the exclusion for homestead property
21 has been reached under section 8586.
22 Section 3. Chapter 87 of Title 53 is amended by adding
23 subchapters to read:
24 SUBCHAPTER C
25 COUNTY SALES AND USE TAX
26 Sec.
27 8721. Construction.
28 8722. Imposition.
29 8723. Situs.
30 8724. Licenses.
20010S0819B0951 - 22 -
1 8725. Rules and regulations; collection costs.
2 8726. Procedure and administration.
3 8727. County sales and use tax funds.
4 8728. Disbursements.
5 8729. Adoption of municipal resolutions and school district
6 petitions.
7 8730. Qualified municipalities and school districts.
8 8731. Disposition of sales tax revenues.
9 § 8721. Construction.
10 The tax imposed by the governing body of a county under this
11 subchapter shall be in addition to any tax imposed by the
12 Commonwealth under Article II of the Tax Reform Code. Except for
13 the differing situs provisions under section 8723 (relating to
14 situs), the provisions of Article II of the Tax Reform Code
15 shall apply to the tax.
16 § 8722. Imposition.
17 (a) Sales.--The governing body of a county, except for a
18 county of the second class, may levy and assess upon each
19 separate sale at retail of tangible personal property or
20 services, as defined in Article II of the Tax Reform Code,
21 within the boundaries of the county, a tax on the purchase
22 price. The tax shall be collected by the vendor from the
23 purchaser and shall be paid over to the Commonwealth as provided
24 in this subchapter. The sales tax shall not be paid to the
25 Commonwealth by any person who has paid the tax imposed under
26 Chapter 5 of the act of June 5, 1991 (P.L.9, No.6), known as the
27 Pennsylvania Intergovernmental Cooperation Authority Act for
28 Cities of the First Class, or subdivision (e) of Article XXXI-B
29 of the act of July 28, 1953 (P.L.723, No.230), known as the
30 Second Class County Code, equal to or greater than the tax
20010S0819B0951 - 23 -
1 imposed under this subsection.
2 (b) Use.--In any county, except for a county of the second
3 class, within which the tax authorized in subsection (a) is
4 imposed, there shall be levied, assessed and collected upon the
5 use, within the county, of tangible personal property purchased
6 at retail and on services purchased at retail, as defined in
7 Article II of the Tax Reform Code, a tax on the purchase price.
8 The tax shall be paid over to the Commonwealth by the person who
9 makes the use. The use tax imposed under this subchapter shall
10 not be paid over to the Commonwealth by any person who has paid
11 the tax imposed under:
12 (1) Subsection (a).
13 (2) This subsection to the vendor with respect to the
14 use.
15 (3) Chapter 5 of the Pennsylvania Intergovernmental
16 Cooperation Authority Act for Cities of the First Class,
17 equal to or greater than the tax imposed under either
18 subsection (a) or this subsection.
19 (4) Subdivision (e) of Article XXXI-B of the Second
20 Class County Code equal to or greater than the tax imposed
21 under either subsection (a) or this subsection.
22 (c) Rate and uniformity.--
23 (1) The tax authorized by subsections (a) and (b) shall
24 be imposed at a rate of 1%.
25 (2) The tax imposed by subsections (a) and (b) shall be
26 uniform.
27 (d) Computation.--The tax imposed under this section shall
28 be computed in the manner set forth in section 503(e)(2) of the
29 Pennsylvania Intergovernmental Cooperation Authority Act for
30 Cities of the First Class.
20010S0819B0951 - 24 -
1 § 8723. Situs.
2 (a) General rule.--Except as provided in subsection (b), the
3 situs of sales at retail or uses, including leases, of motor
4 vehicles, aircraft, motorcraft and utility services shall be
5 determined in the manner specified by section 504 of the act of
6 June 5, 1991 (P.L.9, No.6), known as the Pennsylvania
7 Intergovernmental Cooperation Authority Act for Cities of the
8 First Class, as well as the Tax Reform Code.
9 (b) Premium cable services.--The sale or use of premium
10 cable service shall be deemed to occur at the service address in
11 the county which is the address where the customer cable
12 connection is located. This subsection shall determine the situs
13 of premium cable service for the purpose of all local sales
14 taxes, including those imposed pursuant to Chapter 5 of the
15 Pennsylvania Intergovernmental Cooperation Authority Act for
16 Cities of the First Class and pursuant to subdivision (e) of
17 Article XXXI-B of the act of July 28, 1953 (P.L.723, No.230),
18 known as the Second Class County Code.
19 (c) Telecommunications service.--The situs of
20 telecommunications service under this chapter shall be
21 determined in accordance with regulations adopted by the
22 department, which shall be uniform among all counties, and shall
23 be consistent with regulations promulgated under subdivision (e)
24 of Article XXXI-B the Second Class County Code, Article II of
25 the Tax Reform Code and Chapter 5 of the Pennsylvania
26 Intergovernmental Cooperation Authority Act for Cities of the
27 First Class.
28 § 8724. Licenses.
29 A license for the collection of the tax imposed by this
30 subchapter shall be issued in the same manner as is provided for
20010S0819B0951 - 25 -
1 in section 505 of the act of June 5, 1991 (P.L.9, No.6), known
2 as the Pennsylvania Intergovernmental Cooperation Authority Act
3 for Cities of the First Class. Licensees shall be entitled to
4 the same discount as provided in section 227 of the Tax Reform
5 Code.
6 § 8725. Rules and regulations; collection costs.
7 (a) Regulations.--Rules and regulations shall be applicable
8 to the taxes imposed under section 8722 (relating to imposition)
9 in the same manner as is provided for in section 506(1) and (2)
10 of the act of June 5, 1991 (P.L.9, No.6), known as the
11 Pennsylvania Intergovernmental Cooperation Authority Act for
12 Cities of the First Class.
13 (b) Administrative costs.--The department, to cover its
14 costs of administration, shall be entitled to retain a sum equal
15 to the costs of administration. When the annual operating budget
16 for the department is submitted to the General Assembly, the
17 department shall also submit to the chairman and minority
18 chairman of the Appropriations Committee of the Senate and to
19 the chairman and minority chairman of the Appropriations
20 Committee of the House of Representatives a report of the actual
21 sums retained for costs of collection in the preceding fiscal
22 year, together with all supporting details.
23 § 8726. Procedure and administration.
24 (a) Ordinance.--Any county desiring to impose the tax
25 authorized by section 8722 (relating to imposition) shall give
26 at least 60 days' written notice to every municipality and
27 school district located in the county of its intent to impose
28 the tax and shall adopt an ordinance after the expiration of 60
29 days after the date of such notice. The notice and ordinance
30 shall state the tax rate and refer to this subchapter. The
20010S0819B0951 - 26 -
1 ordinance shall authorize the imposition of all taxes provided
2 for in section 8722. Prior to adopting an ordinance imposing the
3 tax authorized by section 8722, the governing body of the county
4 shall give public notice of its intent to adopt the ordinance in
5 the manner provided by section 4 of the Local Tax Enabling Act
6 and shall conduct at least one public hearing regarding the
7 proposed adoption of the ordinance.
8 (b) Notification to department.--A certified copy of the
9 county ordinance shall be delivered to the department by June 1
10 of the year prior to the effective date thereof. The county
11 ordinance shall become effective on the January 1 following at
12 least seven months after the date of enactment of the county
13 ordinance.
14 (c) Delivery of repeal ordinance.--A certified copy of a
15 repeal ordinance shall be delivered to the department at least
16 120 days prior to the effective date of the repeal.
17 § 8727. County sales and use tax funds.
18 There is hereby created for each county levying the tax under
19 section 8722 (relating to imposition) the (proper name) County
20 Sales and Use Tax Fund. The State Treasurer shall be custodian
21 of the funds which shall be subject to the provisions of law
22 applicable to funds listed in section 302 of the act of April 9,
23 1929 (P.L.343, No.176), known as The Fiscal Code. Taxes imposed
24 under section 8722 shall be received by the department and paid
25 to the State Treasurer and, along with interest and penalties,
26 less any collection costs allowed under this subchapter and any
27 refunds and credits paid, shall be credited to the funds not
28 less frequently than every two weeks. During any period prior to
29 the credit of moneys to the funds, interest earned on moneys
30 received by the department and paid to the State Treasurer under
20010S0819B0951 - 27 -
1 this subchapter shall be deposited into the funds. All moneys in
2 the funds, including, but not limited to, moneys credited to the
3 funds under this section, prior year encumbrances and the
4 interest earned thereon, shall not lapse or be transferred to
5 any other fund, but shall remain in the funds. Pending their
6 disbursement, moneys received on behalf of or deposited into the
7 funds shall be invested or reinvested as are other moneys in the
8 custody of the State Treasurer in the manner provided by law.
9 All earnings received from the investment or reinvestment of the
10 moneys shall be credited to the respective funds. The Auditor
11 General shall periodically audit the records of the department
12 relative to its duties under this section and shall furnish the
13 results of such audit to any county levying the sales and use
14 tax under section 8722 and to any municipality or school
15 district qualified under section 8730 (relating to qualified
16 municipalities and school districts).
17 § 8728. Disbursements.
18 (a) General rule.--On or before the tenth day of every
19 month, the State Treasurer shall make the disbursements on
20 behalf of the county imposing the tax out of the moneys which
21 are, as of the last day of the previous month, contained in the
22 respective county sales and use tax fund.
23 (b) Disbursement to counties.--The State Treasurer shall
24 disburse to a county imposing the tax authorized under section
25 8722 (relating to imposition) an amount of money equal to 50% of
26 the tax collected in that county and remitted to the department
27 and deposited in the respective county sales and use tax fund.
28 The county shall deposit the revenue from the respective county
29 sales and use tax fund into the county general fund for
30 disposition as provided under section 8731 (relating to
20010S0819B0951 - 28 -
1 disposition of sales tax revenues).
2 (c) Disbursement to municipalities.--The State Treasurer
3 shall, at the same time, disburse to the municipalities 25% of
4 the tax collected in their respective counties as provided in
5 section 8730 (relating to qualified municipalities and school
6 districts). Each municipality's portion shall be deposited in
7 the municipal general fund for disposition as provided in
8 section 8731.
9 (d) Disbursement to school districts.--The State Treasurer
10 shall, at the same time, disburse to the school districts 25% of
11 the tax collected in their respective counties as provided in
12 section 8730. Each school district's portion shall be deposited
13 in the school district's general fund for disposition as
14 provided in section 8731.
15 § 8729. Adoption of municipal resolutions and school district
16 petitions.
17 (a) General rule.--No municipality shall be entitled to a
18 disbursement under section 8728(c) (relating to disbursements)
19 and no school district shall be entitled to a disbursement under
20 section 8728(d) unless one of the following applies:
21 (1) Prior to enactment of the county ordinance, it
22 adopts a municipal resolution or a school district petition
23 containing the statement:
24 We strongly urge the county to enact a county sales
25 and use tax and intend to accept disbursements of the
26 sales and use taxes collected.
27 Any municipality which does not enact a resolution and any
28 school district which does not enact a petition in compliance
29 with this paragraph shall not be entitled to and shall not
30 receive any distribution from funds collected during the
20010S0819B0951 - 29 -
1 first 24 months immediately following the initial date of
2 imposition of such tax.
3 (2) Prior to October 1 of any year after the enactment
4 of the county resolution, it adopts a municipal resolution or
5 a school district petition containing the statement:
6 We support the enactment by the county of the county
7 sales and use tax and strongly urge its continuation
8 and intend to accept disbursements of the sales and
9 use taxes collected.
10 (b) Delivery.--A certified copy of the municipal resolution
11 or the school district petition shall be delivered to the county
12 commissioners, the department and the State Treasurer on or
13 before the enactment of the county resolution or October 15 of
14 any year thereafter, as the case may be.
15 § 8730. Qualified municipalities and school districts.
16 (a) General rule.--
17 (1) The State Treasurer shall distribute, on a weighted
18 formula basis, to each municipality that qualifies under
19 subsection (c) the appropriate percentage of revenues
20 received from the county sales and use tax.
21 (2) The State Treasurer shall distribute to each school
22 district that qualifies under subsection (c) a portion of the
23 total disbursement to school districts which is equal to the
24 total disbursement to school districts multiplied by the
25 ratio of average daily membership of the school district
26 divided by the sum of the average daily membership of all
27 school districts in the county. For the purposes of this
28 section, "average daily membership" shall mean "average daily
29 membership" as defined by the act of March 10, 1949 (P.L.30,
30 No.14), known as the Public School Code of 1949. For school
20010S0819B0951 - 30 -
1 districts located in more than one county, the average daily
2 membership shall be multiplied by a factor calculated by
3 dividing the square mileage of the school district located in
4 the county by the total square mileage of the school
5 district.
6 (b) Retention by county.--If a municipality or school
7 district fails to meet the requirements of subsection (c), its
8 disbursement shall be included in the disbursement to the county
9 under section 8728 (relating to disbursements).
10 (c) Qualifications.--Municipalities and school districts
11 qualified to receive disbursements under this section are
12 municipalities and school districts located within the county
13 which adopt in a timely fashion the resolution or petition
14 required under section 8729 (relating to adoption of municipal
15 resolutions and school district petitions).
16 § 8731. Disposition of sales tax revenues.
17 (a) Counties.--In the fiscal year of implementation, each
18 county that imposes a sales and use tax under this chapter shall
19 use all revenues from the tax first to offset any lost revenue
20 to the county from the taxes prohibited under section 8701(b)
21 (relating to general tax authorization) in an amount equal to
22 the revenue the county collected from the prohibited taxes in
23 the immediately preceding fiscal year; second, to provide for an
24 increase in budgeted revenues over the preceding fiscal year in
25 accordance with the amount specified in the referendum question
26 approved by the voters under section 8703 (relating to adoption
27 of referendum); and third, to reduce the county real property
28 tax in the following order:
29 (1) By means of an exclusion for homestead property
30 pursuant to section 8583 (relating to exclusion for homestead
20010S0819B0951 - 31 -
1 property).
2 (2) By means of a reduction in the millage rate after
3 the limit on the exclusion for homestead property has been
4 reached under section 8586 (relating to limitations).
5 The department shall provide to each county that imposes a sales
6 and use tax an estimate of the total dollar amount of revenue
7 that the county can expect to receive from the county's share of
8 the 1% county sales and use tax for the fiscal year of
9 implementation. The department may charge the county for the
10 actual costs of calculating the requested estimates. Guidelines
11 concerning the costs shall be published in the Pennsylvania
12 Bulletin. In the event the actual amount of sales and use tax
13 revenue received by a county is less than the estimate of sales
14 and use tax revenue provided by the department, the county may
15 increase its real property tax millage rate to the level
16 necessary to offset any shortfall resulting from an
17 overestimation of sales and use tax revenue, as certified by the
18 department, in the fiscal year of implementation. The increase
19 shall not be subject to the provisions of section 8704(a)
20 (relating to public referendum requirements for increasing
21 property taxes previously reduced).
22 (b) Municipalities and school districts.--
23 (1) All sales and use tax revenues received by any
24 municipality or school district which has elected to
25 participate under sections 8703 and 8729 (relating to
26 adoption of municipal resolutions and school district
27 petitions) shall be used to reduce the municipal real
28 property tax or the school district real property tax,
29 respectively:
30 (i) By means of an exclusion for homestead property
20010S0819B0951 - 32 -
1 pursuant to section 8583.
2 (ii) By means of a reduction in the millage rate
3 after the limit on the exclusion for homestead property
4 has been reached under section 8586.
5 (2) A municipality or school district which has elected
6 to proceed only under section 8729 shall use the sales and
7 use tax revenues received to reduce or eliminate the real
8 property tax or any taxes prohibited under section 8701(b).
9 SUBCHAPTER D
10 PERSONAL INCOME TAX
11 Sec.
12 8741. Construction.
13 8742. Local personal income tax.
14 8743. Collections.
15 8744. Rules and regulations.
16 8745. Procedure and administration.
17 8746. Credits.
18 8747. Local personal income tax exemption.
19 8748. Regulations.
20 8749. Disposition of income tax revenue.
21 § 8741. Construction.
22 The tax imposed by the governing body of a municipality or
23 school district under this subchapter shall be in addition to
24 any tax imposed by the Commonwealth under Article III of the Tax
25 Reform Code. Except for the differing provisions under sections
26 8746 (relating to credits) and 8747 (relating to local personal
27 income tax exemption), the provisions of Article III of the Tax
28 Reform Code shall apply to the tax.
29 § 8742. Local personal income tax.
30 (a) Municipalities.--In lieu of imposing the tax under
20010S0819B0951 - 33 -
1 section 8711 (relating to earned income and net profit tax), a
2 municipality shall have the power to levy, assess and collect a
3 local tax on the personal income of resident individuals of the
4 municipality up to a maximum rate of 1.5%. The local personal
5 income tax may be levied at a rate of 1.0%, 1.25% or 1.5%.
6 (b) School districts.--In lieu of imposing the tax under
7 section 8711, a school district shall have the power to levy,
8 assess and collect a local tax on personal income of resident
9 individuals of the school district up to a maximum rate of 1.5%,
10 The local personal income tax may be levied at a rate of 1.0%,
11 1.25% or 1.5%.
12 § 8743. Collections.
13 Any municipality or school district imposing a tax under
14 section 8742 (relating to local personal income tax) shall
15 designate the tax officer who is appointed under section 10 of
16 the Local Tax Enabling Act, or otherwise by law, as the
17 collector of the municipality or school district local personal
18 income tax. In the performance of the tax collection duties
19 under this subchapter, the designated tax officer shall have all
20 the same powers, rights, responsibilities and duties for the
21 collection of the taxes which may be imposed under the Local Tax
22 Enabling Act, Subchapter C of Chapter 84 (relating to local
23 taxpayers bill of rights) or as otherwise provided by law.
24 § 8744. Rules and regulations.
25 Taxes imposed under section 8742 (relating to local personal
26 income tax) are subject to the rules and regulations adopted by
27 the department pursuant to Article III of the Tax Reform Code.
28 § 8745. Procedure and administration.
29 The governing body of the municipality or school district, in
30 order to impose the tax authorized by section 8742 (relating to
20010S0819B0951 - 34 -
1 local personal income tax), shall adopt an ordinance or
2 resolution which shall refer to this subchapter. Prior to
3 adopting an ordinance or resolution imposing the tax authorized
4 by section 8742, the governing body shall give public notice of
5 its intent to adopt the ordinance in the manner provided by
6 section 4 of the Local Tax Enabling Act and shall conduct at
7 least one public hearing regarding the proposed adoption of the
8 ordinance.
9 § 8746. Credits.
10 (a) General rule.--The provisions of section 14 of the Local
11 Tax Enabling Act shall be used to determine any credits under
12 the provisions of this chapter for any taxes imposed under
13 section 8742 (relating to local personal income tax) on the
14 earned income portion of the personal income tax.
15 (b) State tax credit.--A credit against personal income tax
16 due to the Commonwealth under section 302 of the Tax Reform Code
17 shall be granted to all nonresidents of a city of the first
18 class who are subject to a tax imposed by a city of the first
19 class pursuant to the act of August 5, 1932 (Sp.Sess., P.L.45,
20 No.45), referred to as the Sterling Act. The credit shall equal
21 0.2756% of salaries, wages, commissions, compensation or other
22 income received for work done or services performed within a
23 city of the first class. The Secretary of Revenue shall
24 promulgate such regulations and forms as are necessary to
25 implement the provisions of this subsection. This section shall
26 only apply to residents of municipalities and school districts
27 which impose the tax under this subchapter. A governing body of
28 a school district in a county of the second class A shall, and a
29 governing body of a school district in a county of the third
30 class may, include in the referendum question under section 8703
20010S0819B0951 - 35 -
1 (relating to adoption of referendum) language asking whether the
2 credit against the personal income tax in this subsection should
3 be provided to the nonresident taxpayer in the city of the first
4 class or the school district in which the taxpayer resides for
5 the purpose of making additional tax reductions in the same
6 manner as section 8749 (relating to disposition of income tax
7 revenue). Should any court of competent jurisdiction determine
8 that this subsection is unconstitutional, the provisions of this
9 subsection shall be void and no credit shall be expanded or
10 extended in any way by any court.
11 § 8747. Local personal income tax exemption.
12 A municipality or school district that imposes a local
13 personal income tax under this chapter may exempt from the
14 payment of that tax any person whose total income from all
15 sources is less than $7,500.
16 § 8748. Regulations.
17 A municipality or school district may adopt regulations for
18 the processing of claims for credits and exemptions under
19 sections 8746 (relating to credits) and 8747 (relating to local
20 personal income tax exemption).
21 § 8749. Disposition of income tax revenue.
22 (a) Municipalities.--The disposition of revenue from an
23 income tax or an increase in the rate of an income tax imposed
24 by a municipality under the authority of this subchapter shall
25 occur in the following manner:
26 (1) For the fiscal year of implementation of a newly
27 imposed income tax, all revenues received by a municipality
28 shall first be used to offset any lost revenue to the
29 municipality from the taxes prohibited under section 8701(b)
30 (relating to general tax authorization) in an amount equal to
20010S0819B0951 - 36 -
1 the revenue the municipality collected from the prohibited
2 taxes in the immediately preceding fiscal year; second, to
3 provide for an increase in budgeted revenues over the
4 preceding fiscal year in accordance with the amount specified
5 in the referendum question approved by the voters under
6 section 8703 (relating to adoption of referendum); and third,
7 to reduce the municipal real property tax in the following
8 order:
9 (i) By means of an exclusion for homestead property
10 pursuant to section 8583 (relating to exclusion for
11 homestead property).
12 (ii) By means of a reduction in the millage rate
13 after the limit on the exclusion for homestead property
14 has been reached under section 8586 (relating to
15 exclusion for homestead property).
16 (2) For the fiscal year of implementation of an increase
17 in the rate of income tax, all revenues received by a
18 municipality in excess of current revenue plus the percentage
19 increase in the Statewide average weekly wage shall be used
20 to reduce the municipal real property tax in the following
21 order:
22 (i) By means of an exclusion for homestead property
23 pursuant to section 8583.
24 (ii) By means of reduction in the millage rate after
25 the limit on the exclusion for homestead property has
26 been reached under section 8586 (relating to exclusion
27 for homestead property).
28 (b) Second through fourth class school districts.--The
29 disposition of revenue from an income tax or an increase in the
30 rate of an income tax imposed by school districts of the second
20010S0819B0951 - 37 -
1 through fourth class under the authority of this subchapter
2 shall occur in the following manner:
3 (1) For the fiscal year of implementation of a newly
4 imposed income tax, all revenues received by a school
5 district of the second through fourth class shall first be
6 used to offset any lost revenue to the school district from
7 the taxes prohibited under section 8701(b) in an amount equal
8 to the revenue the school district collected from the
9 prohibited taxes in the immediately preceding fiscal year;
10 second, to provide for an increase in budgeted revenues over
11 the preceding fiscal year in accordance with the amount
12 specified in the referendum question approved by the voters
13 under section 8703; and third, to reduce the school district
14 real property tax in the following order:
15 (i) By means of an exclusion for homestead property
16 pursuant to section 8583.
17 (ii) By means of a reduction in the millage rate
18 after the limit on the exclusion for homestead property
19 has been reached under section 8586.
20 (2) For the fiscal year of implementation of an increase
21 in the rate of income tax, all revenues received by a school
22 district in excess of current revenue plus the percentage
23 increase in the Statewide average weekly wage shall be used
24 to reduce the school district of the second through fourth
25 class real property tax in the following order:
26 (i) By means of an exclusion for homestead property
27 pursuant to section 8583.
28 (ii) By means of a reduction in the millage rate
29 after the limit on the exclusion for homestead property
30 has been reached under section 8586.
20010S0819B0951 - 38 -
1 (c) School district of the first class A.--The disposition
2 of revenue from an income tax imposed by a school district of
3 the first class A under the authority of this chapter shall
4 occur as follows: for the fiscal year of implementation of a
5 newly imposed income tax, all revenues received by a school
6 district of the first class A in excess of current revenue plus
7 the percentage increase in the Statewide average weekly wage
8 shall be used first to offset any lost revenue to the school
9 district from the taxes prohibited under section 8701(b) in an
10 amount equal to the revenue the school district collected from
11 the prohibited taxes in the immediately preceding fiscal year;
12 second, to offset revenues to be paid to the school district by
13 the city of the second class pursuant to section 3173-B of the
14 act of July 28, 1953 (P.L.723, No.230), known as the Second
15 Class County Code; and third, to reduce the school district real
16 property tax in the following order:
17 (1) By means of an exclusion for homestead property
18 pursuant to section 8583.
19 (2) By means of a reduction in the millage rate after
20 the limit on the exclusion for homestead property has been
21 reached under section 8586.
22 (d) Revenue estimates of department.--The department shall
23 provide to each taxing jurisdiction that imposes an income tax
24 under this chapter an estimate of the total dollar amount of
25 revenue that the taxing jurisdiction can expect to receive from
26 an income tax for the fiscal year of implementation. The
27 department may charge the taxing jurisdiction for the actual
28 costs of calculating the requested estimates. Guidelines
29 concerning the costs shall be published in the Pennsylvania
30 Bulletin. In the event the actual dollar amount of income tax
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1 revenue received by a taxing jurisdiction is less than the
2 estimate of income tax revenue provided by the department, the
3 taxing jurisdiction may increase its real property tax millage
4 rate to the level necessary to offset any shortfall resulting
5 from an overestimation of income tax revenue, as certified by
6 the department, in the fiscal year of implementation. The
7 increase shall not be subject to the provisions of section
8 8704(a) (relating to public referendum requirements for
9 increasing property taxes previously reduced).
10 Section 4. Sections 8912, 8913 and 8915 of Title 53 are
11 amended to read:
12 § 8912. Register for taxes.
13 (a) General rule.--The department shall maintain an official
14 continuing register supplemented annually of all local earned
15 income and net profits, county sales and use and local personal
16 income taxes levied under Chapter 87 (relating to other subjects
17 of taxation).
18 (b) Contents of register.--The register shall list:
19 (1) The counties, municipalities and school districts
20 levying local earned income and net profits tax, county sales
21 and use tax and local personal income tax.
22 (2) The rate of tax as stated in the resolution levying
23 the tax.
24 (3) The rate on taxpayers.
25 (4) The name and address of the official responsible for
26 administering the collection of the tax and from whom
27 information, forms and copies of regulations are available.
28 § 8913. Information for register.
29 Information for the register shall be furnished by the
30 county, municipality or school district to the department as
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1 prescribed by the department. The information must be received
2 by the department no later than July 15 of each year to show new
3 tax enactments, repeals and changes. Failure to comply with the
4 filing date may result in the omission of the tax levy from the
5 register for that year. Failure of the department to receive
6 information of taxes continued without change may be construed
7 by the department to mean that the information contained in the
8 previous register remains in force.
9 § 8915. Effect of nonfiling.
10 Employers shall not be required by any ordinance to withhold
11 from the compensation of their employees any local earned income
12 and net profits tax or local personal income tax imposed under
13 Chapter 87 (relating to other subjects of taxation) which is not
14 listed in the register or to make reports of compensation in
15 connection with taxes not so listed. If the register is not
16 available by August 15, the register of the previous year shall
17 continue to be effective for an additional period of not more
18 than one year.
19 Section 5. This act shall take effect January 1, 2002.
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