PRINTER'S NO. 1850
No. 1372 Session of 2002
INTRODUCED BY FUMO, GERLACH, ARMSTRONG, TARTAGLIONE, SCHWARTZ,
STACK, KITCHEN, A. WILLIAMS, ERICKSON, GREENLEAF,
C. WILLIAMS, O'PAKE, HOLL, BELL, TOMLINSON, MUSTO, CONTI,
MELLOW AND CORMAN, APRIL 1, 2002
REFERRED TO URBAN AFFAIRS AND HOUSING, APRIL 1, 2002
AN ACT
1 Amending Title 53 (Municipalities Generally) of the Pennsylvania
2 Consolidated Statutes, providing for wage tax reduction.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Part VII of Title 53 of the Pennsylvania
6 Consolidated Statutes is amended by adding a subpart to read:
7 SUBPART A
8 WAGE TAX
9 Chapter 70. Wage Tax Reduction
10 CHAPTER 70
11 WAGE TAX REDUCTION
12 Sec.
13 7001. Definitions.
14 7002. Wage tax reduction.
15 7003. Oversight by court of common pleas.
16 Section 7001. Definitions.
17 The following words and phrases when used in this chapter
1 shall have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "Fiscal year." The period between July 1 of a year and June
4 30 of the succeeding year as used by a city to determine a
5 fiscal year.
6 "Growth of Wage Income." The percentage growth of wages,
7 salaries and commissions over each calendar year beginning with
8 the year 2003. The growth rate shall be calculated as the change
9 in percent of wages, salaries and commissions as reported by the
10 Bureau of Economic Analysis each March for the immediately
11 preceding year for the Philadelphia metro area. A simple
12 percentage shall be calculated by determining the increase from
13 the first quarter through the fourth quarter of the effected
14 years using the Bureau of Economic Analysis statistic called
15 "earnings by place of work - wage and salary disbursements."
16 Section 7002. Wage tax reduction.
17 (a) General rule.--The tax on wages, salaries, compensation,
18 commissions and other income received and imposed by a city of
19 the first class under the act of August 5, 1932 (Sp.Sess.,
20 P.L.45, No.45), referred to as the Sterling Act, shall be levied
21 at the rates set forth in this section.
22 (b) Tax utilized by Pennsylvania Intergovernmental
23 Cooperation Authority.--The portion of the wage tax and the net
24 profits tax levied by a city that is utilized for the
25 Pennsylvania Intergovernmental Cooperation Authority shall not
26 be altered by this chapter.
27 (c) Collection and due dates of taxes.--Any wage or net
28 profits tax due before June 30, 2002, shall not be effected by
29 this chapter. The collection methods or due dates of any taxes
30 shall not be effected by this chapter. All enforcement and
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1 collection provisions authorized by the Sterling Act shall
2 remain valid.
3 (d) Residents.--The tax authorized or imposed under the
4 Sterling Act and imposed under Chapter 19 of the Philadelphia
5 Code for residents of a city of the first class shall not be
6 imposed at an amount higher than at the rates prescribed as
7 follows:
8 (1) The current rate of the tax for residents of a city
9 of the first class in calendar year 2002 is 4.5385% including
10 the amount specified for Pennsylvania Intergovernmental
11 Cooperation Authority. For each succeeding fiscal year the
12 rate of taxation shall be reduced by an amount of 0.21
13 percentage points for each year in which the Growth of Wage
14 Income when measured in its prescribed form is greater than
15 3.1%.
16 (2) For any calendar year in which the Growth of Wage
17 Income is less than 3.1% then the reduction in the tax rate
18 shall be 0.1 percentage points in the succeeding fiscal year.
19 (3) This process of rate reductions shall continue until
20 the rate of the tax on residents is 3.5%, including the
21 portion dedicated to Pennsylvania Intergovernmental
22 Cooperation Authority.
23 (e) Nonresidents.--The tax authorized or imposed under the
24 Sterling Act and imposed under Chapter 19 of the Philadelphia
25 Code for nonresidents of a city of the first class shall not be
26 imposed at an amount higher than at the rates prescribed as
27 follows:
28 (1) The current rate of the tax for nonresidents of a
29 city of the first class in calendar year 2002 is 3.9462%. For
30 each succeeding fiscal year the rate of taxation shall be
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1 reduced by an amount of 0.1806 percentage points for each
2 year in which the Growth of Wage Income when measured in its
3 prescribed form is greater than 3.1%.
4 (2) For any calendar year in which the Growth of Wage
5 Income is less than 3.1% then the reduction in the tax rate
6 shall be 0.09 percentage points in the succeeding fiscal
7 year.
8 (3) This process of rate reductions shall continue until
9 the rate of the tax on nonresidents is 3.043%.
10 (f) Business profits of residents.--The tax authorized or
11 imposed under the Sterling Act and imposed under Chapter 19 of
12 the Philadelphia Code for residents of a city of the first class
13 on net profits earned in businesses, professions or other
14 activities shall not be imposed at an amount higher than at the
15 rates prescribed as follows:
16 (1) The current rate of the tax for residents of a city
17 of the first class in calendar year 2002 is 4.5385% including
18 the amount specified for Pennsylvania Intergovernmental
19 Cooperation Authority. For each succeeding calendar year the
20 rate of taxation shall be reduced by an amount of 0.21
21 percentage points for each year in which the Growth of Wage
22 Income when measured in its prescribed form is greater than
23 3.1%.
24 (2) For any calendar year in which the Growth of Wage
25 Income is less than 3.1% then the reduction in the tax rate
26 shall be 0.1 percentage points in the succeeding fiscal year.
27 (3) This process of rate reductions shall continue until
28 the rate of the tax on residents is 3.5%, including the
29 portion dedicated to Pennsylvania Intergovernmental
30 Cooperation Authority.
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1 (g) Business profits of nonresidents.--The tax authorized or
2 imposed under the Sterling Act and imposed under Chapter 19 of
3 the Philadelphia code on net profits earned in businesses,
4 professions or other activities conducted in a city of the first
5 class by nonresidents of a city of the first class shall not be
6 imposed at an amount higher than at rated prescribed as follows:
7 (1) The current rate of the tax for nonresidents of a
8 city of the first class in calendar year 2002 is 3.9462%. For
9 each succeeding calendar year the rate of taxation shall be
10 reduced by an amount of 0.1806 percentage points for each
11 year in which the Growth of Wage Income when measured in its
12 prescribed form is greater than 3.1%.
13 (2) For any calendar year in which the Growth of Wage
14 Income is less than 3.1% then the reduction in the tax rate
15 shall be 0.09 percentage points in the succeeding fiscal
16 year.
17 (3) This process of rate reductions shall continue until
18 the rate of the tax on nonresidents is 3.043%.
19 Section 7003. Oversight by court of common pleas.
20 In the event that a duly elected member of the city council
21 of a city of the first class determines that the determined tax
22 rate is not being reduced by the correct specified amount then
23 that council person may bring suit to the court of common pleas
24 to insure that the specified tax reductions are being utilized.
25 Section 2. The following acts or parts of acts are repealed
26 to the extent specified:
27 Section 359(b)(1) and (2) of the act of March 4, 1971 (P.L.6,
28 No.2), known as the Tax Reform Code of 1971, is repealed insofar
29 as it applies to cities of the first class.
30 The act of August 5, 1932 (Sp.Sess., P.L.45, No.45), referred
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1 to as the Sterling Act, is repealed to the extent it is
2 inconsistent with the provisions of 53 Pa.C.S. Ch. 70.
3 Section 3. The addition of 53 Pa.C.S. Ch. 70 shall apply to
4 fiscal years beginning after December 31, 2002.
5 Section 4. This act shall take effect in 60 days.
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