HOUSE AMENDED
PRIOR PRINTER'S NOS. 840, 1219, 1444 PRINTER'S NO. 2500
No. 763 Session of 2007
INTRODUCED BY BROWNE, ORIE, BOSCOLA, WOZNIAK, FONTANA, WAUGH,
TOMLINSON, COSTA, McILHINNEY, RAFFERTY, FOLMER, FERLO,
WONDERLING, STACK, CORMAN, PUNT, GREENLEAF AND REGOLA,
APRIL 12, 2007
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
OCTOBER 8, 2008
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; FURTHER PROVIDING FOR THE LEVYING OF THE <--
24 MERCANTILE OR BUSINESS PRIVILEGE TAX; TRANSFERRING THE
25 OPTIONAL OCCUPATION TAX ELIMINATION ACT AND FURTHER PROVIDING
26 FOR DEFINITIONS, FOR EARNED INCOME TAX RATE LIMITS, FOR
27 RESOLUTIONS AND FOR BINDING REFERENDUMS AND PROVIDING FOR
28 APPLICABILITY OF INCOME TAX ON PERSONAL INCOME; AND REPEALING
29 THE OPTIONAL OCCUPATION TAX ELIMINATION ACT AND PROVISIONS OF
30 THE TAXPAYER RELIEF ACT.
1 The General Assembly of the Commonwealth of Pennsylvania
2 hereby enacts as follows:
3 Section 1. Section 2 of the act of December 31, 1965 <--
4 (P.L.1257, No.511), known as The Local Tax Enabling Act, amended
5 June 21, 2007 (P.L. , No.7), is amended to read:
6 Section 2. Delegation of Taxing Powers and Restrictions
7 Thereon.--(a) The duly constituted authorities of the following
8 political subdivisions, cities of the second class, cities of
9 the second class A, cities of the third class, boroughs, towns,
10 townships of the first class, townships of the second class,
11 school districts of the second class, school districts of the
12 third class, and school districts of the fourth class, in all
13 cases including independent school districts, may, in their
14 discretion, by ordinance or resolution, for general revenue
15 purposes, levy, assess and collect or provide for the levying,
16 assessment and collection of such taxes as they shall determine
17 on persons, transactions, occupations, privileges, subjects and
18 personal property within the limits of such political
19 subdivisions, and upon the transfer of real property, or of any
20 interest in real property, situate within the political
21 subdivision levying and assessing the tax, regardless of where
22 the instruments making the transfers are made, executed or
23 delivered or where the actual settlements on such transfer take
24 place. The taxing authority may provide that the transferee
25 shall remain liable for any unpaid realty transfer taxes imposed
26 by virtue of this act.
27 (b) Each local taxing authority may, by ordinance or
28 resolution, exempt any person whose total income from all
29 sources is less than twelve thousand dollars ($12,000) per annum
30 from the per capita or similar head tax, occupation tax or
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1 earned income tax, or any portion thereof, and may adopt
2 regulations for the processing of claims for exemptions.
3 (c) (1) Each political subdivision levying the local
4 services tax shall exempt the following persons from the local
5 services tax:
6 (i) Any person who served in any war or armed conflict in
7 which the United States was engaged and is honorably discharged
8 or released under honorable circumstances from active service
9 if, as a result of military service, the person is blind,
10 paraplegic or a double or quadruple amputee or has a service-
11 connected disability declared by the United States Veterans'
12 Administration or its successor to be a total one hundred
13 percent permanent disability.
14 (ii) Any person who serves as a member of a reserve
15 component of the armed forces and is called to active duty at
16 any time during the taxable year.
17 (2) For purposes of this subsection, "reserve component of
18 the armed forces" shall mean the United States Army Reserve,
19 United States Navy Reserve, United States Marine Corps Reserve,
20 United States Coast Guard Reserve, United States Air Force
21 Reserve, the Pennsylvania Army National Guard or the
22 Pennsylvania Air National Guard.
23 (d) Each political subdivision levying the local services
24 tax at a rate exceeding ten dollars ($10) shall, and each
25 political subdivision levying the local services tax at a rate
26 of ten dollars ($10) or less may, by ordinance or resolution,
27 exempt any person from the local services tax whose total earned
28 income and net profits from all sources within the political
29 subdivision is less than twelve thousand dollars ($12,000) for
30 the calendar year in which the local services tax is levied.
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1 (e) (1) A person seeking to claim an exemption from the
2 local services tax may annually file an exemption certificate
3 with the political subdivision levying the tax and with the
4 person's employer affirming that the person reasonably expects
5 to receive earned income and net profits from all sources within
6 the political subdivision of less than twelve thousand dollars
7 ($12,000) in the calendar year for which the exemption
8 certificate is filed. In the event the political subdivision
9 utilizes a tax collection officer pursuant to section 10 of this
10 act, the political subdivision shall provide a copy of the
11 exemption certificate to that officer. The exemption certificate
12 shall have attached to it a copy of all of the employe's last
13 pay stubs or W-2 forms from employment within the political
14 subdivision for the year prior to the fiscal year for which the
15 employe is requesting to be exempted from the local services
16 tax. Upon receipt of the exemption certificate and until
17 otherwise instructed by the political subdivision levying the
18 tax or except as required by clause (2), the employer shall not
19 withhold the tax from the person during the calendar year or the
20 remainder of the calendar year for which the exemption
21 certificate applies. Employers shall ensure that the exemption
22 certificate forms are readily available to employes at all times
23 and shall furnish each new employe with a form at the time of
24 hiring. The Department of Community and Economic Development
25 shall develop and make available to political subdivisions and
26 employers uniform exemption certificates required by this
27 clause.
28 (2) With respect to a person who claimed an exemption for a
29 given calendar year from the local services tax, upon
30 notification to an employer by the person or by the political
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1 subdivision that the person has received earned income and net
2 profits from all sources within that political subdivision equal
3 to or in excess of twelve thousand dollars ($12,000) in that
4 calendar year or that the person is otherwise ineligible for the
5 tax exemption for that calendar year, or upon an employer's
6 payment to the person of earned income within that political
7 subdivision in an amount equal to or in excess of twelve
8 thousand dollars ($12,000) in that calendar year, an employer
9 shall withhold the local services tax from the person under
10 clause (3).
11 (3) If a person who claimed an exemption for a given
12 calendar year from the local services tax becomes subject to the
13 tax for the calendar year under clause (2), the employer shall
14 withhold the tax for the remainder of that calendar year. The
15 employer shall withhold from the person, for the first payroll
16 period after receipt of the notification under clause (2), a
17 lump sum equal to the amount of tax that was not withheld from
18 the person due to the exemption claimed by the person under this
19 subsection, plus the per payroll amount due for that first
20 payroll period. The amount of tax withheld per payroll period
21 for the remaining payroll periods in that calendar year shall be
22 the same amount withheld for other employes. In the event the
23 employment of a person subject to withholding of the tax under
24 this clause is subsequently severed in that calendar year, the
25 person shall be liable for any outstanding balance of tax due
26 and the political subdivision levying the tax may pursue
27 collection under this act.
28 (4) Except as provided in clause (2), it is the intent of
29 this subsection that employers shall not be responsible for
30 investigating exemption certificates, monitoring tax exemption
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1 eligibility or exempting any employe from a local services tax.
2 (f) Such local authorities shall not have authority by
3 virtue 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 leases; or lease transactions; or on
19 a conveyance to a trustee under a recorded trust agreement for
20 the express purpose of holding title in trust as security for a
21 debt contracted at the time of the conveyance under which the
22 trustee is not the lender and requiring the trustee to make
23 reconveyance to the grantor-borrower upon the repayment of the
24 debt, or a transfer within a family from a sole proprietor
25 family member to a family farm corporation, or in any sheriff
26 sale instituted by a mortgagee in which the purchaser of said
27 sheriff sale is the mortgagee who instituted said sale, or on a
28 privilege, transaction, subject, occupation or personal property
29 which is now or does hereafter become subject to a State tax or
30 license fee;
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1 (2) To levy, assess or collect a tax on the gross receipts
2 from utility service of any person or company whose rates and
3 services are fixed and regulated by the Pennsylvania Public
4 Utility Commission or on any public utility services rendered by
5 any such person or company or on any privilege or transaction
6 involving the rendering of any such public utility service;
7 (3) Except on sales of admission to places of amusement,
8 other than on sales of admission to professional baseball events
9 in a city of the third class with a population of not less than
10 one hundred six thousand and not more than one hundred seven
11 thousand based on the 2000 Federal decennial census, or on sales
12 or other transfers of title or possession of property, to levy,
13 assess or collect a tax on the privilege of employing such
14 tangible property as is now or does hereafter become subject to
15 a State tax; and for the purposes of this clause, real property
16 rented for camping purposes shall not be considered a place of
17 amusement.
18 (4) To levy, assess and collect a tax on goods and articles
19 manufactured in such political subdivision or on the by-products
20 of manufacture, or on minerals, timber, natural resources and
21 farm products produced in such political subdivision or on the
22 preparation or processing thereof for use or market, or on any
23 privilege, act or transaction related to the business of
24 manufacturing, the production, preparation or processing of
25 minerals, timber and natural resources, or farm products, by
26 manufacturers, by producers and by farmers with respect to the
27 goods, articles and products of their own manufacture,
28 production or growth, or on any privilege, act or transaction
29 relating to the business of processing by-products of
30 manufacture, or on the transportation, loading, unloading or
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1 dumping or storage of such goods, articles, products or by-
2 products; except that local authorities may levy, assess and
3 collect a local services tax and taxes on the occupation, per
4 capita and earned income or net profits of natural persons
5 engaged in the above activities whether doing business as
6 individual proprietorship or as members of partnerships or other
7 associations;
8 (5) To levy, assess or collect a tax on salaries, wages,
9 commissions, compensation and earned income of nonresidents of
10 the political subdivisions: Provided, That this limitation (5)
11 shall apply only to school districts of the second, third and
12 fourth classes;
13 (6) To levy, assess or collect a tax on personal property
14 subject to taxation by counties or on personal property owned by
15 persons, associations and corporations specifically exempted by
16 law from taxation under the county personal property tax law:
17 Provided, That this limitation (6) shall not apply to cities of
18 the second class;
19 (7) To levy, assess or collect a tax on membership in or
20 membership dues, fees or assessment of charitable, religious,
21 beneficial or nonprofit organizations including but not limited
22 to sportsmens, recreational, golf and tennis clubs, girl and boy
23 scout troops and councils;
24 (8) To levy, assess or collect any tax on a mobilehome or
25 house trailer subject to a real property tax unless the same tax
26 is levied, assessed and collected on other real property in the
27 political subdivision.
28 (9) To levy, assess or collect any tax on individuals for
29 the privilege of engaging in an occupation except that such a
30 tax, to be known as the local services tax, may be levied,
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1 assessed and collected only by the political subdivision of the
2 taxpayer's place of employment. The following apply:
3 (i) If a local services tax is levied at a combined rate
4 exceeding ten dollars ($10) in a calendar year, a person subject
5 to the local services tax shall be assessed a pro rata share of
6 the tax for each payroll period in which the person is engaging
7 in an occupation. The pro rata share of the tax assessed on the
8 person for a payroll period shall be determined by dividing the
9 combined rate of the local services tax levied for the calendar
10 year by the number of payroll periods established by the
11 employer for the calendar year. For purposes of determining the
12 pro rata share, an employer shall round down the amount of the
13 tax collected each payroll period to the nearest one-hundredth
14 of a dollar. Collection of the local services tax levied under
15 this subclause shall be made on a payroll period basis for each
16 payroll period in which the person is engaging in an occupation,
17 except as provided in subclause (v).
18 (ii) If a school district levied an emergency and municipal
19 services tax on the effective date of this subclause, the school
20 district may continue to levy the local services tax in the same
21 amount the school district collected on the effective date of
22 this subclause. However, if a municipality located in whole or
23 in part within the school district subsequently levies the local
24 services tax, the school district may only collect five dollars
25 ($5) on persons employed within the municipality each calendar
26 year. A school district that did not levy an emergency and
27 municipal services tax on the effective date of this subclause
28 shall be prohibited from levying the local services tax. If a
29 school district and a municipality located in whole or in part
30 within the school district both levy a local services tax at a
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1 combined rate exceeding ten dollars ($10), the school district's
2 pro rata share of the aggregate local services taxes levied on
3 persons employed within the municipality shall be collected by
4 the municipality or its tax officer based on payroll periods as
5 provided under subclause (i) and shall be paid to the school
6 district on a quarterly basis within sixty days of receipt by
7 the municipality or its tax officer.
8 (iii) Except as provided in subclause (ii), no person shall
9 be subject to the payment of the local services tax by more than
10 one political subdivision during each payroll period as
11 established by subclause (iv).
12 (iv) With respect to a person subject to the local services
13 tax at a combined rate exceeding ten dollars ($10), the situs of
14 the tax shall be the place of employment on the first day the
15 person becomes subject to the tax during each payroll period.
16 With respect to a person subject to the local services tax at a
17 combined rate of not more than ten dollars ($10), the situs of
18 the tax shall be the place of employment determined as of the
19 day the person first becomes subject to the tax during the
20 calendar year. In the event a person is engaged in more than one
21 occupation, that is, concurrent employment, or an occupation
22 which requires the person working in more than one political
23 subdivision during a payroll period, the priority of claim to
24 collect the local services tax shall be in the following order:
25 first, the political subdivision in which a person maintains the
26 person's principal office or is principally employed; second,
27 the political subdivision in which the person resides and works,
28 if the tax is levied by that political subdivision; and third,
29 the political subdivision in which a person is employed and
30 which imposes the tax nearest in miles to the person's home.
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1 (v) In the case of concurrent employment, an employer shall
2 refrain from withholding the local services tax, if the employe
3 provides a recent pay statement from a principal employer that
4 includes the name of the employer, the length of the payroll
5 period and the amount of the local services tax withheld and a
6 statement from the employe that the pay statement is from the
7 employe's principal employer and the employe will notify other
8 employers of a change in principal place of employment within
9 two weeks of its occurrence. The Department of Community and
10 Economic Development shall develop a uniform employe statement
11 form.
12 (vi) The local services tax shall be no more than fifty-two
13 dollars ($52) on each person for each calendar year,
14 irrespective of the number of political subdivisions within
15 which a person may be employed. A political subdivision shall
16 provide a taxpayer a receipt of payment upon request by the
17 taxpayer.
18 (vii) Political subdivisions shall adopt regulations for the
19 processing of refund claims for overpaid local services taxes
20 for any calendar year. The regulations shall be consistent with
21 53 Pa.C.S. §§ 8425 and 8426. Refunds made within seventy-five
22 days of a refund request or seventy-five days after the last day
23 the employer is required to remit the local services tax for the
24 last quarter of the calendar year under section 9 of this act,
25 whichever is later, shall not be subject to interest imposed
26 under 53 Pa.C.S. § 8426. Political subdivisions shall only
27 provide refunds for amounts overpaid in a calendar year that
28 exceed one dollar ($1).
29 (viii) The Department of Community and Economic Development
30 shall provide suggested forms and technical assistance to
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1 facilitate the administration of the local services tax for
2 political subdivisions and reduce the burden of implementation,
3 accounting and compliance for employers and taxpayers.
4 (ix) For purposes of this clause, "combined rate" shall mean
5 the aggregate annual rate of the local services tax levied by a
6 school district and a municipality located in whole or in part
7 within the school district.
8 (10) To levy, assess or collect a tax on admissions to
9 motion picture theatres: Provided, That this limitation (10)
10 shall not apply to cities of the second class.
11 (11) To levy, assess or collect a tax on the construction of
12 or improvement to residential dwellings or upon the application
13 for or issuance of permits for the construction of or
14 improvements to residential dwellings.
15 (12) To levy, assess and collect a mercantile or business
16 privilege tax on gross receipts or part thereof which are: (i)
17 discounts allowed to purchasers as cash discounts for prompt
18 payment of their bills; (ii) charges advanced by a seller for
19 freight, delivery or other transportation for the purchaser in
20 accordance with the terms of a contract of sale; (iii) received
21 upon the sale of an article of personal property which was
22 acquired by the seller as a trade-in to the extent that the
23 gross receipts in the sale of the article taken in trade does
24 not exceed the amount of trade-in allowance made in acquiring
25 such article; (iv) refunds, credits or allowances given to a
26 purchaser on account of defects in goods sold or merchandise
27 returned; (v) Pennsylvania sales tax; (vi) based on the value of
28 exchanges or transfers between one seller and another seller who
29 transfers property with the understanding that property of an
30 identical description will be returned at a subsequent date;
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1 however, when sellers engaged in similar lines of business
2 exchange property and one of them makes payment to the other in
3 addition to the property exchanged, the additional payment
4 received may be included in the gross receipts of the seller
5 receiving such additional cash payments; (vii) of sellers from
6 sales to other sellers in the same line where the seller
7 transfers the title or possession at the same price for which
8 the seller acquired the merchandise; or (viii) transfers between
9 one department, branch or division of a corporation or other
10 business entity of goods, wares and merchandise to another
11 department, branch or division of the same corporation or
12 business entity and which are recorded on the books to reflect
13 such interdepartmental transactions.
14 (13) To levy, assess or collect an amusement or admissions
15 tax on membership, membership dues, fees or assessments,
16 donations, contributions or monetary charges of any character
17 whatsoever paid by the general public, or a limited or selected
18 number thereof, for such persons to enter into any place,
19 indoors or outdoors, to engage in any activities, the
20 predominant purpose or nature of which is exercise, fitness,
21 health maintenance, improvement or rehabilitation, health or
22 nutrition education, or weight control.
23 (14) Except by cities of the second class, to levy, assess
24 or collect a tax on payroll amounts generated as a result of
25 business activity.
26 (15) Except by cities of the second class in which a sports
27 stadium or arena that has received public funds in connection
28 with its construction or maintenance is located, to levy, assess
29 and collect a publicly funded facility usage fee upon those
30 nonresident individuals who use such facility to engage in an
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1 athletic event or otherwise render a performance for which they
2 receive remuneration.
3 (16) To levy, assess or collect an amusement or admissions
4 tax on the charge imposed upon a patron for the sale of
5 admission to or for the privilege of admission to a bowling
6 alley or bowling lane to engage in one or more games of bowling.
7 (g) For the purposes of this section, the terms "earned
8 income" and "net profits" shall have the same meanings as those
9 terms are given in Division I of section 13.
10 Section 2. The amendment of section 2 of the act shall not
11 apply to municipalities imposing a tax on leases or lease
12 transactions prior to July 1, 2007.
13 Section 3. This act shall take effect in 60 days.
14 SECTION 1. SECTION 2(F)(1) OF THE ACT OF DECEMBER 31, 1965 <--
15 (P.L.1257, NO.511), KNOWN AS THE LOCAL TAX ENABLING ACT, AMENDED
16 JUNE 21, 2007 (P.L.13, NO.7), IS AMENDED TO READ:
17 SECTION 2. DELEGATION OF TAXING POWERS AND RESTRICTIONS
18 THEREON.--* * *
19 (F) SUCH LOCAL AUTHORITIES SHALL NOT HAVE AUTHORITY BY
20 VIRTUE OF THIS ACT:
21 (1) TO LEVY, ASSESS AND COLLECT OR PROVIDE FOR THE LEVYING,
22 ASSESSMENT AND COLLECTION OF ANY TAX ON THE TRANSFER OF REAL
23 PROPERTY WHEN THE TRANSFER IS BY WILL OR MORTGAGE OR THE
24 INTESTATE LAWS OF THIS COMMONWEALTH OR ON A TRANSFER BY THE
25 OWNER OF PREVIOUSLY OCCUPIED RESIDENTIAL PREMISES TO A BUILDER
26 OF NEW RESIDENTIAL PREMISES WHEN SUCH PREVIOUSLY OCCUPIED
27 RESIDENTIAL PREMISES IS TAKEN IN TRADE BY SUCH BUILDER AS PART
28 OF THE CONSIDERATION FROM THE PURCHASER OF A NEW PREVIOUSLY
29 UNOCCUPIED SINGLE FAMILY RESIDENTIAL PREMISES OR ON A TRANSFER
30 BETWEEN CORPORATIONS OPERATING HOUSING PROJECTS PURSUANT TO THE
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1 HOUSING AND REDEVELOPMENT ASSISTANCE LAW AND THE SHAREHOLDERS
2 THEREOF, OR ON A TRANSFER BETWEEN NONPROFIT INDUSTRIAL
3 DEVELOPMENT AGENCIES AND INDUSTRIAL CORPORATIONS PURCHASING FROM
4 THEM, OR ON TRANSFER TO OR FROM NONPROFIT INDUSTRIAL DEVELOPMENT
5 AGENCIES, OR ON A TRANSFER BETWEEN HUSBAND AND WIFE, OR ON A
6 TRANSFER BETWEEN PERSONS WHO WERE PREVIOUSLY HUSBAND AND WIFE
7 BUT WHO HAVE SINCE BEEN DIVORCED; PROVIDED SUCH TRANSFER IS MADE
8 WITHIN THREE MONTHS OF THE DATE OF THE GRANTING OF THE FINAL
9 DECREE IN DIVORCE, OR THE DECREE OF EQUITABLE DISTRIBUTION OF
10 MARITAL PROPERTY, WHICHEVER IS LATER, AND THE PROPERTY OR
11 INTEREST THEREIN, SUBJECT TO SUCH TRANSFER, WAS ACQUIRED BY THE
12 HUSBAND AND WIFE, OR HUSBAND OR WIFE, PRIOR TO THE GRANTING OF
13 THE FINAL DECREE IN DIVORCE, OR ON A TRANSFER BETWEEN PARENT AND
14 CHILD OR THE SPOUSE OF SUCH A CHILD, OR BETWEEN PARENT AND
15 TRUSTEE FOR THE BENEFIT OF A CHILD OR THE SPOUSE OF SUCH CHILD,
16 OR ON A TRANSFER BETWEEN A GRANDPARENT AND GRANDCHILD OR THE
17 SPOUSE OF SUCH GRANDCHILD, OR ON A TRANSFER BETWEEN BROTHER AND
18 SISTER OR BROTHER AND BROTHER OR SISTER AND SISTER OR THE SPOUSE
19 OF SUCH BROTHER OR SISTER, OR ON A TRANSFER TO A CONSERVANCY
20 WHICH POSSESSES A TAX-EXEMPT STATUS PURSUANT TO SECTION
21 501(C)(3) OF THE INTERNAL REVENUE CODE, AND WHICH HAS AS ITS
22 PRIMARY PURPOSE THE PRESERVATION OF LAND FOR HISTORIC,
23 RECREATIONAL, SCENIC, AGRICULTURAL OR OPEN SPACE OPPORTUNITIES,
24 BY AND BETWEEN A PRINCIPAL AND STRAW PARTY FOR THE PURPOSE OF
25 PLACING A MORTGAGE OR GROUND RENT UPON THE PREMISES, OR ON A
26 CORRECTIONAL DEED WITHOUT CONSIDERATION, OR ON A TRANSFER TO THE
27 UNITED STATES, THE COMMONWEALTH OF PENNSYLVANIA, OR TO ANY OF
28 THEIR INSTRUMENTALITIES, AGENCIES OR POLITICAL SUBDIVISIONS, BY
29 GIFT, DEDICATION OR DEED IN LIEU OF CONDEMNATION, OR DEED OF
30 CONFIRMATION IN CONNECTION WITH CONDEMNATION PROCEEDINGS, OR
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1 RECONVEYANCE BY THE CONDEMNING BODY OF THE PROPERTY CONDEMNED TO
2 THE OWNER OF RECORD AT THE TIME OF CONDEMNATION WHICH
3 RECONVEYANCE MAY INCLUDE PROPERTY LINE ADJUSTMENTS PROVIDED SAID
4 RECONVEYANCE IS MADE WITHIN ONE YEAR FROM THE DATE OF
5 CONDEMNATION[, LEASES,]; OR LEASES OR LEASE TRANSACTIONS; OR ON
6 A CONVEYANCE TO A TRUSTEE UNDER A RECORDED TRUST AGREEMENT FOR
7 THE EXPRESS PURPOSE OF HOLDING TITLE IN TRUST AS SECURITY FOR A
8 DEBT CONTRACTED AT THE TIME OF THE CONVEYANCE UNDER WHICH THE
9 TRUSTEE IS NOT THE LENDER AND REQUIRING THE TRUSTEE TO MAKE
10 RECONVEYANCE TO THE GRANTOR-BORROWER UPON THE REPAYMENT OF THE
11 DEBT, OR A TRANSFER WITHIN A FAMILY FROM A SOLE PROPRIETOR
12 FAMILY MEMBER TO A FAMILY FARM CORPORATION, OR IN ANY SHERIFF
13 SALE INSTITUTED BY A MORTGAGEE IN WHICH THE PURCHASER OF SAID
14 SHERIFF SALE IS THE MORTGAGEE WHO INSTITUTED SAID SALE, OR ON A
15 PRIVILEGE, TRANSACTION, SUBJECT, OCCUPATION OR PERSONAL PROPERTY
16 WHICH IS NOW OR DOES HEREAFTER BECOME SUBJECT TO A STATE TAX OR
17 LICENSE FEE;
18 * * *
19 SECTION 1. SECTIONS 301.1 AND 311(2) OF THE ACT OF DECEMBER <--
20 31, 1965 (P.L.1257, NO.511), KNOWN AS THE LOCAL TAX ENABLING
21 ACT, AMENDED JULY 2, 2008 (P.L.197, NO.32), ARE AMENDED TO READ:
22 SECTION 301.1. DELEGATION OF TAXING POWERS AND RESTRICTIONS
23 THEREON.--(A) THE DULY CONSTITUTED AUTHORITIES OF THE FOLLOWING
24 POLITICAL SUBDIVISIONS, CITIES OF THE SECOND CLASS, CITIES OF
25 THE SECOND CLASS A, CITIES OF THE THIRD CLASS, BOROUGHS, TOWNS,
26 TOWNSHIPS OF THE FIRST CLASS, TOWNSHIPS OF THE SECOND CLASS,
27 SCHOOL DISTRICTS OF THE SECOND CLASS, SCHOOL DISTRICTS OF THE
28 THIRD CLASS, AND SCHOOL DISTRICTS OF THE FOURTH CLASS, IN ALL
29 CASES INCLUDING INDEPENDENT SCHOOL DISTRICTS MAY, IN THEIR
30 DISCRETION, BY ORDINANCE OR RESOLUTION, FOR GENERAL REVENUE
20070S0763B2500 - 17 -
1 PURPOSES, LEVY, ASSESS AND COLLECT OR PROVIDE FOR THE LEVYING,
2 ASSESSMENT AND COLLECTION OF SUCH TAXES AS THEY SHALL DETERMINE
3 ON PERSONS, TRANSACTIONS, OCCUPATIONS, PRIVILEGES, SUBJECTS AND
4 PERSONAL PROPERTY WITHIN THE LIMITS OF SUCH POLITICAL
5 SUBDIVISIONS, AND UPON THE TRANSFER OF REAL PROPERTY, OR OF ANY
6 INTEREST IN REAL PROPERTY, SITUATE WITHIN THE POLITICAL
7 SUBDIVISION LEVYING AND ASSESSING THE TAX, REGARDLESS OF WHERE
8 THE INSTRUMENTS MAKING THE TRANSFERS ARE MADE, EXECUTED OR
9 DELIVERED OR WHERE THE ACTUAL SETTLEMENTS ON SUCH TRANSFER TAKE
10 PLACE. THE TAXING AUTHORITY MAY PROVIDE THAT THE TRANSFEREE
11 SHALL REMAIN LIABLE FOR ANY UNPAID REALTY TRANSFER TAXES IMPOSED
12 BY VIRTUE OF THIS CHAPTER.
13 (B) EACH LOCAL TAXING AUTHORITY MAY, BY ORDINANCE OR
14 RESOLUTION, EXEMPT ANY PERSON WHOSE TOTAL INCOME FROM ALL
15 SOURCES IS LESS THAN TWELVE THOUSAND DOLLARS ($12,000) PER ANNUM
16 FROM THE PER CAPITA OR SIMILAR HEAD TAX, OCCUPATION TAX OR
17 EARNED INCOME TAX, OR ANY PORTION THEREOF, AND MAY ADOPT
18 REGULATIONS FOR THE PROCESSING OF CLAIMS FOR EXEMPTIONS.
19 (C) (1) EACH POLITICAL SUBDIVISION LEVYING THE LOCAL
20 SERVICES TAX SHALL EXEMPT THE FOLLOWING PERSONS FROM THE LOCAL
21 SERVICES TAX:
22 (I) ANY PERSON WHO HAS SERVED IN ANY WAR OR ARMED CONFLICT
23 IN WHICH THE UNITED STATES WAS ENGAGED AND IS HONORABLY
24 DISCHARGED OR RELEASED UNDER HONORABLE CIRCUMSTANCES FROM ACTIVE
25 SERVICE IF, AS A RESULT OF MILITARY SERVICE, THE PERSON IS
26 BLIND, PARAPLEGIC OR A DOUBLE OR QUADRUPLE AMPUTEE OR HAS A
27 SERVICE-CONNECTED DISABILITY DECLARED BY THE UNITED STATES
28 VETERANS' ADMINISTRATION OR ITS SUCCESSOR TO BE A TOTAL ONE
29 HUNDRED PERCENT PERMANENT DISABILITY.
30 (II) ANY PERSON WHO SERVES AS A MEMBER OF A RESERVE
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1 COMPONENT OF THE ARMED FORCES AND IS CALLED TO ACTIVE DUTY AT
2 ANY TIME DURING THE TAXABLE YEAR.
3 (2) FOR PURPOSES OF THIS SUBSECTION, "RESERVE COMPONENT OF
4 THE ARMED FORCES" SHALL MEAN THE UNITED STATES ARMY RESERVE,
5 UNITED STATES NAVY RESERVE, UNITED STATES MARINE CORPS RESERVE,
6 UNITED STATES COAST GUARD RESERVE, UNITED STATES AIR FORCE
7 RESERVE, THE PENNSYLVANIA ARMY NATIONAL GUARD OR THE
8 PENNSYLVANIA AIR NATIONAL GUARD.
9 (D) EACH POLITICAL SUBDIVISION LEVYING THE LOCAL SERVICES
10 TAX AT A RATE EXCEEDING TEN DOLLARS ($10) SHALL, AND EACH
11 POLITICAL SUBDIVISION LEVYING THE LOCAL SERVICES TAX AT A RATE
12 OF TEN DOLLARS ($10) OR LESS MAY, BY ORDINANCE OR RESOLUTION,
13 EXEMPT ANY PERSON FROM THE LOCAL SERVICES TAX WHOSE TOTAL EARNED
14 INCOME AND NET PROFITS FROM ALL SOURCES WITHIN THE POLITICAL
15 SUBDIVISION IS LESS THAN TWELVE THOUSAND DOLLARS ($12,000) FOR
16 THE CALENDAR YEAR IN WHICH THE LOCAL SERVICES TAX IS LEVIED.
17 (E) (1) A PERSON SEEKING TO CLAIM AN EXEMPTION FROM THE
18 LOCAL SERVICES TAX MAY ANNUALLY FILE AN EXEMPTION CERTIFICATE
19 WITH THE POLITICAL SUBDIVISION LEVYING THE TAX AND WITH THE
20 PERSON'S EMPLOYER AFFIRMING THAT THE PERSON REASONABLY EXPECTS
21 TO RECEIVE EARNED INCOME AND NET PROFITS FROM ALL SOURCES WITHIN
22 THE POLITICAL SUBDIVISION OF LESS THAN TWELVE THOUSAND DOLLARS
23 ($12,000) IN THE CALENDAR YEAR FOR WHICH THE EXEMPTION
24 CERTIFICATE IS FILED. IN THE EVENT THE POLITICAL SUBDIVISION
25 UTILIZES A TAX COLLECTION OFFICER PURSUANT TO SECTION 10 OF THIS
26 ACT, THE POLITICAL SUBDIVISION SHALL PROVIDE A COPY OF THE
27 EXEMPTION CERTIFICATE TO THAT OFFICER. THE EXEMPTION CERTIFICATE
28 SHALL HAVE ATTACHED TO IT A COPY OF ALL THE EMPLOYE'S LAST PAY
29 STUBS OR W-2 FORMS FROM EMPLOYMENT WITHIN THE POLITICAL
30 SUBDIVISION FOR THE YEAR PRIOR TO THE FISCAL YEAR FOR WHICH THE
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1 EMPLOYE IS REQUESTING TO BE EXEMPTED FROM THE LOCAL SERVICES
2 TAX. UPON RECEIPT OF THE EXEMPTION CERTIFICATE AND UNTIL
3 OTHERWISE INSTRUCTED BY THE POLITICAL SUBDIVISION LEVYING THE
4 TAX OR EXCEPT AS REQUIRED BY CLAUSE (2), THE EMPLOYER SHALL NOT
5 WITHHOLD THE TAX FROM THE PERSON DURING THE CALENDAR YEAR OR THE
6 REMAINDER OF THE CALENDAR YEAR FOR WHICH THE EXEMPTION
7 CERTIFICATE APPLIES. EMPLOYERS SHALL ENSURE THAT THE EXEMPTION
8 CERTIFICATE FORMS ARE READILY AVAILABLE TO EMPLOYES AT ALL TIMES
9 AND SHALL FURNISH EACH NEW EMPLOYE WITH A FORM AT THE TIME OF
10 HIRING. THE DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT
11 SHALL DEVELOP AND MAKE AVAILABLE TO POLITICAL SUBDIVISIONS AND
12 EMPLOYERS UNIFORM EXEMPTION CERTIFICATES REQUIRED BY THIS
13 CLAUSE.
14 (2) WITH RESPECT TO A PERSON WHO CLAIMED AN EXEMPTION FOR A
15 GIVEN CALENDAR YEAR FROM THE LOCAL SERVICES TAX, UPON
16 NOTIFICATION TO AN EMPLOYER BY THE PERSON OR BY THE POLITICAL
17 SUBDIVISION THAT THE PERSON HAS RECEIVED EARNED INCOME AND NET
18 PROFITS FROM ALL SOURCES WITHIN THAT POLITICAL SUBDIVISION EQUAL
19 TO OR IN EXCESS OF TWELVE THOUSAND DOLLARS ($12,000) IN THAT
20 CALENDAR YEAR OR THAT THE PERSON IS OTHERWISE INELIGIBLE FOR THE
21 TAX EXEMPTION FOR THAT CALENDAR YEAR, OR UPON AN EMPLOYER'S
22 PAYMENT TO THE PERSON OF EARNED INCOME WITHIN THAT POLITICAL
23 SUBDIVISION IN AN AMOUNT EQUAL TO OR IN EXCESS OF TWELVE
24 THOUSAND DOLLARS ($12,000) IN THAT CALENDAR YEAR, AN EMPLOYER
25 SHALL WITHHOLD THE LOCAL SERVICES TAX FROM THE PERSON UNDER
26 CLAUSE (3).
27 (3) IF A PERSON WHO CLAIMED AN EXEMPTION FOR A GIVEN
28 CALENDAR YEAR FROM THE LOCAL SERVICES TAX BECOMES SUBJECT TO THE
29 TAX FOR THE CALENDAR YEAR UNDER CLAUSE (2), THE EMPLOYER SHALL
30 WITHHOLD THE TAX FOR THE REMAINDER OF THAT CALENDAR YEAR. THE
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1 EMPLOYER SHALL WITHHOLD FROM THE PERSON, FOR THE FIRST PAYROLL
2 PERIOD AFTER RECEIPT OF THE NOTIFICATION UNDER CLAUSE (2), A
3 LUMP SUM EQUAL TO THE AMOUNT OF TAX THAT WAS NOT WITHHELD FROM
4 THE PERSON DUE TO THE EXEMPTION CLAIMED BY THE PERSON UNDER THIS
5 SUBSECTION, PLUS THE PER PAYROLL AMOUNT DUE FOR THAT FIRST
6 PAYROLL PERIOD. THE AMOUNT OF TAX WITHHELD PER PAYROLL PERIOD
7 FOR THE REMAINING PAYROLL PERIODS IN THAT CALENDAR YEAR SHALL BE
8 THE SAME AMOUNT WITHHELD FOR OTHER EMPLOYES. IN THE EVENT THE
9 EMPLOYMENT OF A PERSON SUBJECT TO WITHHOLDING OF THE TAX UNDER
10 THIS CLAUSE IS SUBSEQUENTLY SEVERED IN THAT CALENDAR YEAR, THE
11 PERSON SHALL BE LIABLE FOR ANY OUTSTANDING BALANCE OF TAX DUE,
12 AND THE POLITICAL SUBDIVISION LEVYING THE TAX MAY PURSUE
13 COLLECTION UNDER THIS ACT.
14 (4) EXCEPT AS PROVIDED IN CLAUSE (2), IT IS THE INTENT OF
15 THIS SUBSECTION THAT EMPLOYERS SHALL NOT BE RESPONSIBLE FOR
16 INVESTIGATING EXEMPTION CERTIFICATES, MONITORING TAX EXEMPTION
17 ELIGIBILITY OR EXEMPTING ANY EMPLOYE FROM A LOCAL SERVICES TAX.
18 (F) SUCH LOCAL AUTHORITIES SHALL NOT HAVE AUTHORITY BY
19 VIRTUE OF THIS ACT:
20 (1) TO LEVY, ASSESS AND COLLECT OR PROVIDE FOR THE LEVYING,
21 ASSESSMENT AND COLLECTION OF ANY TAX ON THE TRANSFER OF REAL
22 PROPERTY WHEN THE TRANSFER IS BY WILL OR MORTGAGE OR THE
23 INTESTATE LAWS OF THIS COMMONWEALTH OR ON A TRANSFER BY THE
24 OWNER OF PREVIOUSLY OCCUPIED RESIDENTIAL PREMISES TO A BUILDER
25 OF NEW RESIDENTIAL PREMISES WHEN SUCH PREVIOUSLY OCCUPIED
26 RESIDENTIAL PREMISES IS TAKEN IN TRADE BY SUCH BUILDER AS PART
27 OF THE CONSIDERATION FROM THE PURCHASER OF A NEW PREVIOUSLY
28 UNOCCUPIED SINGLE FAMILY RESIDENTIAL PREMISES OR ON A TRANSFER
29 BETWEEN CORPORATIONS OPERATING HOUSING PROJECTS PURSUANT TO THE
30 HOUSING AND REDEVELOPMENT ASSISTANCE LAW AND THE SHAREHOLDERS
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1 THEREOF, OR ON A TRANSFER BETWEEN NONPROFIT INDUSTRIAL
2 DEVELOPMENT AGENCIES AND INDUSTRIAL CORPORATIONS PURCHASING FROM
3 THEM, OR ON TRANSFER TO OR FROM NONPROFIT INDUSTRIAL DEVELOPMENT
4 AGENCIES, OR ON A TRANSFER BETWEEN HUSBAND AND WIFE, OR ON A
5 TRANSFER BETWEEN PERSONS WHO WERE PREVIOUSLY HUSBAND AND WIFE
6 BUT WHO HAVE SINCE BEEN DIVORCED; PROVIDED SUCH TRANSFER IS MADE
7 WITHIN THREE MONTHS OF THE DATE OF THE GRANTING OF THE FINAL
8 DECREE IN DIVORCE, OR THE DECREE OF EQUITABLE DISTRIBUTION OF
9 MARITAL PROPERTY, WHICHEVER IS LATER, AND THE PROPERTY OR
10 INTEREST THEREIN, SUBJECT TO SUCH TRANSFER, WAS ACQUIRED BY THE
11 HUSBAND AND WIFE, OR HUSBAND OR WIFE, PRIOR TO THE GRANTING OF
12 THE FINAL DECREE IN DIVORCE, OR ON A TRANSFER BETWEEN PARENT AND
13 CHILD OR THE SPOUSE OF SUCH A CHILD, OR BETWEEN PARENT AND
14 TRUSTEE FOR THE BENEFIT OF A CHILD OR THE SPOUSE OF SUCH CHILD,
15 OR ON A TRANSFER BETWEEN A GRANDPARENT AND GRANDCHILD OR THE
16 SPOUSE OF SUCH GRANDCHILD, OR ON A TRANSFER BETWEEN BROTHER AND
17 SISTER OR BROTHER AND BROTHER OR SISTER AND SISTER OR THE SPOUSE
18 OF SUCH BROTHER OR SISTER, OR ON A TRANSFER TO A CONSERVANCY
19 WHICH POSSESSES A TAX-EXEMPT STATUS PURSUANT TO SECTION
20 501(C)(3) OF THE INTERNAL REVENUE CODE, AND WHICH HAS AS ITS
21 PRIMARY PURPOSE THE PRESERVATION OF LAND FOR HISTORIC,
22 RECREATIONAL, SCENIC, AGRICULTURAL OR OPEN SPACE OPPORTUNITIES,
23 BY AND BETWEEN A PRINCIPAL AND STRAW PARTY FOR THE PURPOSE OF
24 PLACING A MORTGAGE OR GROUND RENT UPON THE PREMISES, OR ON A
25 CORRECTIONAL DEED WITHOUT CONSIDERATION, OR ON A TRANSFER TO THE
26 UNITED STATES, THE COMMONWEALTH OF PENNSYLVANIA, OR TO ANY OF
27 THEIR INSTRUMENTALITIES, AGENCIES OR POLITICAL SUBDIVISIONS, BY
28 GIFT, DEDICATION OR DEED IN LIEU OF CONDEMNATION, OR DEED OF
29 CONFIRMATION IN CONNECTION WITH CONDEMNATION PROCEEDINGS, OR
30 RECONVEYANCE BY THE CONDEMNING BODY OF THE PROPERTY CONDEMNED TO
20070S0763B2500 - 22 -
1 THE OWNER OF RECORD AT THE TIME OF CONDEMNATION WHICH
2 RECONVEYANCE MAY INCLUDE PROPERTY LINE ADJUSTMENTS PROVIDED SAID
3 RECONVEYANCE IS MADE WITHIN ONE YEAR FROM THE DATE OF
4 CONDEMNATION[, LEASES,]; OR LEASES OR LEASE TRANSACTIONS; OR ON
5 A CONVEYANCE TO A TRUSTEE UNDER A RECORDED TRUST AGREEMENT FOR
6 THE EXPRESS PURPOSE OF HOLDING TITLE IN TRUST AS SECURITY FOR A
7 DEBT CONTRACTED AT THE TIME OF THE CONVEYANCE UNDER WHICH THE
8 TRUSTEE IS NOT THE LENDER AND REQUIRING THE TRUSTEE TO MAKE
9 RECONVEYANCE TO THE GRANTOR-BORROWER UPON THE REPAYMENT OF THE
10 DEBT, OR A TRANSFER WITHIN A FAMILY FROM A SOLE PROPRIETOR
11 FAMILY MEMBER TO A FAMILY FARM CORPORATION, OR IN ANY SHERIFF
12 SALE INSTITUTED BY A MORTGAGEE IN WHICH THE PURCHASER OF SAID
13 SHERIFF SALE IS THE MORTGAGEE WHO INSTITUTED SAID SALE, OR ON A
14 PRIVILEGE, TRANSACTION, SUBJECT, OCCUPATION OR PERSONAL PROPERTY
15 WHICH IS NOW OR DOES HEREAFTER BECOME SUBJECT TO A STATE TAX OR
16 LICENSE FEE;
17 (2) TO LEVY, ASSESS OR COLLECT A TAX ON THE GROSS RECEIPTS
18 FROM UTILITY SERVICE OF ANY PERSON OR COMPANY WHOSE RATES AND
19 SERVICES ARE FIXED AND REGULATED BY THE PENNSYLVANIA PUBLIC
20 UTILITY COMMISSION OR ON ANY PUBLIC UTILITY SERVICES RENDERED BY
21 ANY SUCH PERSON OR COMPANY OR ON ANY PRIVILEGE OR TRANSACTION
22 INVOLVING THE RENDERING OF ANY SUCH PUBLIC UTILITY SERVICE;
23 (3) EXCEPT ON SALES OF ADMISSION TO PLACES OF AMUSEMENT,
24 OTHER THAN ON SALES OF ADMISSION TO PROFESSIONAL BASEBALL EVENTS
25 IN A CITY OF THE THIRD CLASS WITH A POPULATION OF NOT LESS THAN
26 ONE HUNDRED SIX THOUSAND AND NOT MORE THAN ONE HUNDRED SEVEN
27 THOUSAND BASED ON THE 2000 FEDERAL DECENNIAL CENSUS, OR ON SALES
28 OR OTHER TRANSFERS OF TITLE OR POSSESSION OF PROPERTY, TO LEVY,
29 ASSESS OR COLLECT A TAX ON THE PRIVILEGE OF EMPLOYING SUCH
30 TANGIBLE PROPERTY AS IS NOW OR DOES HEREAFTER BECOME SUBJECT TO
20070S0763B2500 - 23 -
1 A STATE TAX; AND FOR THE PURPOSES OF THIS CLAUSE, REAL PROPERTY
2 RENTED FOR CAMPING PURPOSES SHALL NOT BE CONSIDERED A PLACE OF
3 AMUSEMENT;
4 (4) TO LEVY, ASSESS AND COLLECT A TAX ON GOODS AND ARTICLES
5 MANUFACTURED IN SUCH POLITICAL SUBDIVISION OR ON THE BY-PRODUCTS
6 OF MANUFACTURE, OR ON MINERALS, TIMBER, NATURAL RESOURCES AND
7 FARM PRODUCTS PRODUCED IN SUCH POLITICAL SUBDIVISION OR ON THE
8 PREPARATION OR PROCESSING THEREOF FOR USE OR MARKET, OR ON ANY
9 PRIVILEGE, ACT OR TRANSACTION RELATED TO THE BUSINESS OF
10 MANUFACTURING, THE PRODUCTION, PREPARATION OR PROCESSING OF
11 MINERALS, TIMBER AND NATURAL RESOURCES, OR FARM PRODUCTS, BY
12 MANUFACTURERS, BY PRODUCERS AND BY FARMERS WITH RESPECT TO THE
13 GOODS, ARTICLES AND PRODUCTS OF THEIR OWN MANUFACTURE,
14 PRODUCTION OR GROWTH, OR ON ANY PRIVILEGE, ACT OR TRANSACTION
15 RELATING TO THE BUSINESS OF PROCESSING BY-PRODUCTS OF
16 MANUFACTURE, OR ON THE TRANSPORTATION, LOADING, UNLOADING OR
17 DUMPING OR STORAGE OF SUCH GOODS, ARTICLES, PRODUCTS OR BY-
18 PRODUCTS; EXCEPT THAT LOCAL AUTHORITIES MAY LEVY, ASSESS AND
19 COLLECT A LOCAL SERVICES TAX AND TAXES ON THE OCCUPATION, PER
20 CAPITA AND EARNED INCOME OR NET PROFITS OF NATURAL PERSONS
21 ENGAGED IN THE ABOVE ACTIVITIES WHETHER DOING BUSINESS AS
22 INDIVIDUAL PROPRIETORSHIP OR AS MEMBERS OF PARTNERSHIPS OR OTHER
23 ASSOCIATIONS;
24 (5) TO LEVY, ASSESS OR COLLECT A TAX ON SALARIES, WAGES,
25 COMMISSIONS, COMPENSATION AND EARNED INCOME OF NONRESIDENTS OF
26 THE POLITICAL SUBDIVISIONS: PROVIDED, THAT THIS LIMITATION (5)
27 SHALL APPLY ONLY TO SCHOOL DISTRICTS OF THE SECOND, THIRD AND
28 FOURTH CLASSES;
29 (6) TO LEVY, ASSESS OR COLLECT A TAX ON PERSONAL PROPERTY
30 SUBJECT TO TAXATION BY COUNTIES OR ON PERSONAL PROPERTY OWNED BY
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1 PERSONS, ASSOCIATIONS AND CORPORATIONS SPECIFICALLY EXEMPTED BY
2 LAW FROM TAXATION UNDER THE COUNTY PERSONAL PROPERTY TAX LAW:
3 PROVIDED, THAT THIS LIMITATION (6) SHALL NOT APPLY TO CITIES OF
4 THE SECOND CLASS;
5 (7) TO LEVY, ASSESS OR COLLECT A TAX ON MEMBERSHIP IN OR
6 MEMBERSHIP DUES, FEES OR ASSESSMENT OF CHARITABLE, RELIGIOUS,
7 BENEFICIAL OR NONPROFIT ORGANIZATIONS INCLUDING BUT NOT LIMITED
8 TO SPORTSMENS, RECREATIONAL, GOLF AND TENNIS CLUBS, GIRL AND BOY
9 SCOUT TROOPS AND COUNCILS;
10 (8) TO LEVY, ASSESS OR COLLECT ANY TAX ON A MOBILEHOME OR
11 HOUSE TRAILER SUBJECT TO A REAL PROPERTY TAX UNLESS THE SAME TAX
12 IS LEVIED, ASSESSED AND COLLECTED ON OTHER REAL PROPERTY IN THE
13 POLITICAL SUBDIVISION.
14 (9) TO LEVY, ASSESS OR COLLECT ANY TAX ON INDIVIDUALS FOR
15 THE PRIVILEGE OF ENGAGING IN AN OCCUPATION EXCEPT THAT SUCH A
16 TAX, TO BE KNOWN AS THE LOCAL SERVICES TAX, MAY BE LEVIED,
17 ASSESSED AND COLLECTED ONLY BY THE POLITICAL SUBDIVISION OF THE
18 TAXPAYER'S PLACE OF EMPLOYMENT. THE FOLLOWING APPLY:
19 (I) IF A LOCAL SERVICES TAX IS LEVIED AT A COMBINED RATE
20 EXCEEDING TEN DOLLARS ($10) IN A CALENDAR YEAR, A PERSON SUBJECT
21 TO THE LOCAL SERVICES TAX SHALL BE ASSESSED A PRO RATA SHARE OF
22 THE TAX FOR EACH PAYROLL PERIOD IN WHICH THE PERSON IS ENGAGING
23 IN AN OCCUPATION. THE PRO RATA SHARE OF THE TAX ASSESSED ON THE
24 PERSON FOR A PAYROLL PERIOD SHALL BE DETERMINED BY DIVIDING THE
25 COMBINED RATE OF THE LOCAL SERVICES TAX LEVIED FOR THE CALENDAR
26 YEAR BY THE NUMBER OF PAYROLL PERIODS ESTABLISHED BY THE
27 EMPLOYER FOR THE CALENDAR YEAR. FOR PURPOSES OF DETERMINING THE
28 PRO RATA SHARE, AN EMPLOYER SHALL ROUND DOWN THE AMOUNT OF THE
29 TAX COLLECTED EACH PAYROLL PERIOD TO THE NEAREST ONE-HUNDREDTH
30 OF A DOLLAR. COLLECTION OF THE LOCAL SERVICES TAX LEVIED UNDER
20070S0763B2500 - 25 -
1 THIS SUBCLAUSE SHALL BE MADE ON A PAYROLL PERIOD BASIS FOR EACH
2 PAYROLL PERIOD IN WHICH THE PERSON IS ENGAGING IN AN OCCUPATION,
3 EXCEPT AS PROVIDED IN SUBCLAUSE (V).
4 (II) IF A SCHOOL DISTRICT LEVIED AN EMERGENCY AND MUNICIPAL
5 SERVICES TAX ON THE EFFECTIVE DATE OF THIS SUBCLAUSE, THE SCHOOL
6 DISTRICT MAY CONTINUE TO LEVY THE LOCAL SERVICES TAX IN THE SAME
7 AMOUNT THE SCHOOL DISTRICT COLLECTED ON THE EFFECTIVE DATE OF
8 THIS SUBCLAUSE. HOWEVER, IF A MUNICIPALITY LOCATED IN WHOLE OR
9 IN PART WITHIN THE SCHOOL DISTRICT SUBSEQUENTLY LEVIES THE LOCAL
10 SERVICES TAX, THE SCHOOL DISTRICT MAY ONLY COLLECT FIVE DOLLARS
11 ($5) ON PERSONS EMPLOYED WITHIN THE MUNICIPALITY EACH CALENDAR
12 YEAR. A SCHOOL DISTRICT THAT DID NOT LEVY AN EMERGENCY AND
13 MUNICIPAL SERVICES TAX ON THE EFFECTIVE DATE OF THIS SUBCLAUSE
14 SHALL BE PROHIBITED FROM LEVYING THE LOCAL SERVICES TAX. IF A
15 SCHOOL DISTRICT AND A MUNICIPALITY LOCATED IN WHOLE OR IN PART
16 WITHIN THE SCHOOL DISTRICT BOTH LEVY A LOCAL SERVICES TAX AT A
17 COMBINED RATE EXCEEDING TEN DOLLARS ($10), THE SCHOOL DISTRICT'S
18 PRO RATA SHARE OF THE AGGREGATE LOCAL SERVICES TAXES LEVIED ON
19 PERSONS EMPLOYED WITHIN THE MUNICIPALITY SHALL BE COLLECTED BY
20 THE MUNICIPALITY OR ITS TAX OFFICER BASED ON PAYROLL PERIODS AS
21 PROVIDED UNDER SUBCLAUSE (I) AND SHALL BE PAID TO THE SCHOOL
22 DISTRICT ON A QUARTERLY BASIS WITHIN SIXTY DAYS OF RECEIPT BY
23 THE MUNICIPALITY OR ITS TAX OFFICER.
24 (III) EXCEPT AS PROVIDED IN SUBCLAUSE (II), NO PERSON SHALL
25 BE SUBJECT TO THE PAYMENT OF THE LOCAL SERVICES TAX BY MORE THAN
26 ONE POLITICAL SUBDIVISION DURING EACH PAYROLL PERIOD AS
27 ESTABLISHED BY SUBCLAUSE (IV).
28 (IV) WITH RESPECT TO A PERSON SUBJECT TO THE LOCAL SERVICES
29 TAX AT A COMBINED RATE EXCEEDING TEN DOLLARS ($10), THE SITUS OF
30 THE TAX SHALL BE THE PLACE OF EMPLOYMENT ON THE FIRST DAY THE
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1 PERSON BECOMES SUBJECT TO THE TAX DURING EACH PAYROLL PERIOD.
2 WITH RESPECT TO A PERSON SUBJECT TO THE LOCAL SERVICES TAX AT A
3 COMBINED RATE OF NOT MORE THAN TEN DOLLARS ($10), THE SITUS OF
4 THE TAX SHALL BE THE PLACE OF EMPLOYMENT DETERMINED AS OF THE
5 DAY THE PERSON FIRST BECOMES SUBJECT TO THE TAX DURING THE
6 CALENDAR YEAR. IN THE EVENT A PERSON IS ENGAGED IN MORE THAN ONE
7 OCCUPATION, THAT IS, CONCURRENT EMPLOYMENT, OR AN OCCUPATION
8 WHICH REQUIRES THE PERSON WORKING IN MORE THAN ONE POLITICAL
9 SUBDIVISION DURING A PAYROLL PERIOD, THE PRIORITY OF CLAIM TO
10 COLLECT THE LOCAL SERVICES TAX SHALL BE IN THE FOLLOWING ORDER:
11 FIRST, THE POLITICAL SUBDIVISION IN WHICH A PERSON MAINTAINS THE
12 PERSON'S PRINCIPAL OFFICE OR IS PRINCIPALLY EMPLOYED; SECOND,
13 THE POLITICAL SUBDIVISION IN WHICH THE PERSON RESIDES AND WORKS,
14 IF THE TAX IS LEVIED BY THAT POLITICAL SUBDIVISION; AND THIRD,
15 THE POLITICAL SUBDIVISION IN WHICH A PERSON IS EMPLOYED AND
16 WHICH IMPOSES THE TAX NEAREST IN MILES TO THE PERSON'S HOME.
17 (V) IN THE CASE OF CONCURRENT EMPLOYMENT, AN EMPLOYER SHALL
18 REFRAIN FROM WITHHOLDING THE LOCAL SERVICES TAX IF THE EMPLOYE
19 PROVIDES A RECENT PAY STATEMENT FROM A PRINCIPAL EMPLOYER THAT
20 INCLUDES THE NAME OF THE EMPLOYER, THE LENGTH OF THE PAYROLL
21 PERIOD AND THE AMOUNT OF THE LOCAL SERVICES TAX WITHHELD AND A
22 STATEMENT FROM THE EMPLOYE THAT THE PAY STATEMENT IS FROM THE
23 EMPLOYE'S PRINCIPAL EMPLOYER AND THE EMPLOYE WILL NOTIFY OTHER
24 EMPLOYERS OF A CHANGE IN PRINCIPAL PLACE OF EMPLOYMENT WITHIN
25 TWO WEEKS OF ITS OCCURRENCE. THE DEPARTMENT OF COMMUNITY AND
26 ECONOMIC DEVELOPMENT SHALL DEVELOP A UNIFORM EMPLOYE STATEMENT
27 FORM.
28 (VI) THE LOCAL SERVICES TAX SHALL BE NO MORE THAN FIFTY-TWO
29 DOLLARS ($52) ON EACH PERSON FOR EACH CALENDAR YEAR,
30 IRRESPECTIVE OF THE NUMBER OF POLITICAL SUBDIVISIONS WITHIN
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1 WHICH A PERSON MAY BE EMPLOYED. A POLITICAL SUBDIVISION SHALL
2 PROVIDE A TAXPAYER A RECEIPT OF PAYMENT UPON REQUEST BY THE
3 TAXPAYER.
4 (VII) POLITICAL SUBDIVISIONS SHALL ADOPT REGULATIONS FOR THE
5 PROCESSING OF REFUND CLAIMS FOR OVERPAID LOCAL SERVICES TAXES
6 FOR ANY CALENDAR YEAR. THE REGULATIONS SHALL BE CONSISTENT WITH
7 53 PA.C.S. §§ 8425 (RELATING TO REFUNDS OF OVERPAYMENTS) AND
8 8426 (RELATING TO INTEREST ON OVERPAYMENT). REFUNDS MADE WITHIN
9 SEVENTY-FIVE DAYS OF A REFUND REQUEST OR SEVENTY-FIVE DAYS AFTER
10 THE LAST DAY THE EMPLOYER IS REQUIRED TO REMIT THE LOCAL
11 SERVICES TAX FOR THE LAST QUARTER OF THE CALENDAR YEAR UNDER
12 SECTION 312 OF THIS ACT, WHICHEVER IS LATER, SHALL NOT BE
13 SUBJECT TO INTEREST IMPOSED UNDER 53 PA.C.S. § 8426. POLITICAL
14 SUBDIVISIONS SHALL ONLY PROVIDE REFUNDS FOR AMOUNTS OVERPAID IN
15 A CALENDAR YEAR THAT EXCEED ONE DOLLAR ($1).
16 (VIII) THE DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT
17 SHALL PROVIDE SUGGESTED FORMS AND TECHNICAL ASSISTANCE TO
18 FACILITATE THE ADMINISTRATION OF THE LOCAL SERVICES TAX FOR
19 POLITICAL SUBDIVISIONS AND REDUCE THE BURDEN OF IMPLEMENTATION,
20 ACCOUNTING AND COMPLIANCE FOR EMPLOYERS AND TAXPAYERS.
21 (IX) FOR PURPOSES OF THIS CLAUSE, "COMBINED RATE" SHALL MEAN
22 THE AGGREGATE ANNUAL RATE OF THE LOCAL SERVICES TAX LEVIED BY A
23 SCHOOL DISTRICT AND A MUNICIPALITY LOCATED IN WHOLE OR IN PART
24 WITHIN THE SCHOOL DISTRICT.
25 (10) TO LEVY, ASSESS OR COLLECT A TAX ON ADMISSIONS TO
26 MOTION PICTURE THEATRES: PROVIDED, THAT THIS LIMITATION (10)
27 SHALL NOT APPLY TO CITIES OF THE SECOND CLASS.
28 (11) TO LEVY, ASSESS OR COLLECT A TAX ON THE CONSTRUCTION OF
29 OR IMPROVEMENT TO RESIDENTIAL DWELLINGS OR UPON THE APPLICATION
30 FOR OR ISSUANCE OF PERMITS FOR THE CONSTRUCTION OF OR
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1 IMPROVEMENTS TO RESIDENTIAL DWELLINGS.
2 (12) TO LEVY, ASSESS AND COLLECT A MERCANTILE OR BUSINESS
3 PRIVILEGE TAX ON GROSS RECEIPTS OR PART THEREOF WHICH ARE: (I)
4 DISCOUNTS ALLOWED TO PURCHASERS AS CASH DISCOUNTS FOR PROMPT
5 PAYMENT OF THEIR BILLS; (II) CHARGES ADVANCED BY A SELLER FOR
6 FREIGHT, DELIVERY OR OTHER TRANSPORTATION FOR THE PURCHASER IN
7 ACCORDANCE WITH THE TERMS OF A CONTRACT OF SALE; (III) RECEIVED
8 UPON THE SALE OF AN ARTICLE OF PERSONAL PROPERTY WHICH WAS
9 ACQUIRED BY THE SELLER AS A TRADE-IN TO THE EXTENT THAT THE
10 GROSS RECEIPTS IN THE SALE OF THE ARTICLE TAKEN IN TRADE DOES
11 NOT EXCEED THE AMOUNT OF TRADE-IN ALLOWANCE MADE IN ACQUIRING
12 SUCH ARTICLE; (IV) REFUNDS, CREDITS OR ALLOWANCES GIVEN TO A
13 PURCHASER ON ACCOUNT OF DEFECTS IN GOODS SOLD OR MERCHANDISE
14 RETURNED; (V) PENNSYLVANIA SALES TAX; (VI) BASED ON THE VALUE OF
15 EXCHANGES OR TRANSFERS BETWEEN ONE SELLER AND ANOTHER SELLER WHO
16 TRANSFERS PROPERTY WITH THE UNDERSTANDING THAT PROPERTY OF AN
17 IDENTICAL DESCRIPTION WILL BE RETURNED AT A SUBSEQUENT DATE;
18 HOWEVER, WHEN SELLERS ENGAGED IN SIMILAR LINES OF BUSINESS
19 EXCHANGE PROPERTY AND ONE OF THEM MAKES PAYMENT TO THE OTHER IN
20 ADDITION TO THE PROPERTY EXCHANGED, THE ADDITIONAL PAYMENT
21 RECEIVED MAY BE INCLUDED IN THE GROSS RECEIPTS OF THE SELLER
22 RECEIVING SUCH ADDITIONAL CASH PAYMENTS; (VII) OF SELLERS FROM
23 SALES TO OTHER SELLERS IN THE SAME LINE WHERE THE SELLER
24 TRANSFERS THE TITLE OR POSSESSION AT THE SAME PRICE FOR WHICH
25 THE SELLER ACQUIRED THE MERCHANDISE; OR (VIII) TRANSFERS BETWEEN
26 ONE DEPARTMENT, BRANCH OR DIVISION OF A CORPORATION OR OTHER
27 BUSINESS ENTITY OF GOODS, WARES AND MERCHANDISE TO ANOTHER
28 DEPARTMENT, BRANCH OR DIVISION OF THE SAME CORPORATION OR
29 BUSINESS ENTITY AND WHICH ARE RECORDED ON THE BOOKS TO REFLECT
30 SUCH INTERDEPARTMENTAL TRANSACTIONS.
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1 (13) TO LEVY, ASSESS OR COLLECT AN AMUSEMENT OR ADMISSIONS
2 TAX ON MEMBERSHIP, MEMBERSHIP DUES, FEES OR ASSESSMENTS,
3 DONATIONS, CONTRIBUTIONS OR MONETARY CHARGES OF ANY CHARACTER
4 WHATSOEVER PAID BY THE GENERAL PUBLIC, OR A LIMITED OR SELECTED
5 NUMBER THEREOF, FOR SUCH PERSONS TO ENTER INTO ANY PLACE,
6 INDOORS OR OUTDOORS, TO ENGAGE IN ANY ACTIVITIES, THE
7 PREDOMINANT PURPOSE OR NATURE OF WHICH IS EXERCISE, FITNESS,
8 HEALTH MAINTENANCE, IMPROVEMENT OR REHABILITATION, HEALTH OR
9 NUTRITION EDUCATION, OR WEIGHT CONTROL.
10 (14) EXCEPT BY CITIES OF THE SECOND CLASS, TO LEVY, ASSESS
11 OR COLLECT A TAX ON PAYROLL AMOUNTS GENERATED AS A RESULT OF
12 BUSINESS ACTIVITY.
13 (15) EXCEPT BY CITIES OF THE SECOND CLASS IN WHICH A SPORTS
14 STADIUM OR ARENA THAT HAS RECEIVED PUBLIC FUNDS IN CONNECTION
15 WITH ITS CONSTRUCTION OR MAINTENANCE IS LOCATED, TO LEVY, ASSESS
16 AND COLLECT A PUBLICLY FUNDED FACILITY USAGE FEE UPON THOSE
17 NONRESIDENT INDIVIDUALS WHO USE SUCH FACILITY TO ENGAGE IN AN
18 ATHLETIC EVENT OR OTHERWISE RENDER A PERFORMANCE FOR WHICH THEY
19 RECEIVE REMUNERATION.
20 (16) TO LEVY, ASSESS OR COLLECT AN AMUSEMENT OR ADMISSIONS
21 TAX ON THE CHARGE IMPOSED UPON A PATRON FOR THE SALE OF
22 ADMISSION TO OR FOR THE PRIVILEGE OF ADMISSION TO A BOWLING
23 ALLEY OR BOWLING LANE TO ENGAGE IN ONE OR MORE GAMES OF BOWLING.
24 SECTION 311. LIMITATIONS ON RATES OF SPECIFIC TAXES.--NO
25 TAXES LEVIED UNDER THE PROVISIONS OF THIS CHAPTER SHALL BE
26 LEVIED BY ANY POLITICAL SUBDIVISION ON THE FOLLOWING SUBJECTS
27 EXCEEDING THE RATES SPECIFIED IN THIS SECTION:
28 * * *
29 (2) ON EACH DOLLAR OF THE WHOLE VOLUME OF BUSINESS
30 TRANSACTED BY WHOLESALE DEALERS IN GOODS, WARES AND MERCHANDISE,
20070S0763B2500 - 30 -
1 ONE MILL, BY RETAIL DEALERS IN GOODS, WARES AND MERCHANDISE AND
2 BY PROPRIETORS OF RESTAURANTS OR OTHER PLACES WHERE FOOD, DRINK
3 AND REFRESHMENTS ARE SERVED, ONE AND ONE-HALF MILLS; EXCEPT IN
4 CITIES OF THE SECOND CLASS, WHERE RATES SHALL NOT EXCEED ONE
5 MILL ON WHOLESALE DEALERS AND TWO MILLS ON RETAIL DEALERS AND
6 PROPRIETORS. NO SUCH TAX SHALL BE LEVIED ON THE DOLLAR VOLUME OF
7 BUSINESS TRANSACTED BY WHOLESALE AND RETAIL DEALERS DERIVED FROM
8 THE RESALE OF GOODS, WARES AND MERCHANDISE, TAKEN BY ANY DEALER
9 AS A TRADE-IN OR AS PART PAYMENT FOR OTHER GOODS, WARES AND
10 MERCHANDISE, EXCEPT TO THE EXTENT THAT THE RESALE PRICE EXCEEDS
11 THE TRADE-IN ALLOWANCE. WHEN A POLITICAL SUBDIVISION WHICH
12 CURRENTLY LEVIES, ASSESSES OR COLLECTS A MERCANTILE OR BUSINESS
13 PRIVILEGE TAX ON GROSS RECEIPTS UNDER SECTION 533 OF THE ACT OF
14 DECEMBER 13, 1988 (P.L.1121, NO.145), KNOWN AS THE "LOCAL TAX
15 REFORM ACT," MERGES WITH ONE OR MORE POLITICAL SUBDIVISIONS TO
16 FORM A NEW POLITICAL SUBDIVISION ON OR AFTER AUGUST 1, 2008, THE
17 NEW POLITICAL SUBDIVISION MAY LEVY THAT MERCANTILE OR BUSINESS
18 PRIVILEGE TAX BUT NOT AT A RATE GREATER THAN THE RATE NECESSARY
19 TO GENERATE THE SAME REVENUES GENERATED IN THE LAST FISCAL YEAR
20 THAT THE MERGING POLITICAL SUBDIVISION GENERATED BEFORE THE
21 MERGER. IF THE MERGING POLITICAL SUBDIVISION HAD PREVIOUSLY
22 SHARED THE RATE OF TAXATION WITH ANOTHER POLITICAL SUBDIVISION,
23 THE NONMERGING POLITICAL SUBDIVISION WHICH HAD SHARED THE RATE
24 IS CAPPED AT THE RATE IT WAS PREVIOUSLY LEVYING.
25 * * *
26 SECTION 2. THE ACT IS AMENDED BY ADDING A CHAPTER TO READ:
27 CHAPTER 4
28 OPTIONAL OCCUPATION TAX ELIMINATION
29 SECTION 401. SCOPE.
30 THIS ACT RELATES TO OPTIONAL OCCUPATION TAX ELIMINATION.
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1 SECTION 402. DEFINITIONS.
2 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER
3 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
4 CONTEXT CLEARLY INDICATES OTHERWISE:
5 "EARNED INCOME TAX." A TAX ON EARNED INCOME AND NET PROFITS
6 LEVIED UNDER THIS ACT OR A TAX ON EARNED INCOME AND NET PROFITS
7 LEVIED UNDER THE ACT OF JUNE 27, 2006 (1ST SP.SESS., P.L.1873,
8 NO.1), KNOWN AS THE TAXPAYER RELIEF ACT.
9 "ELECTION OFFICIALS." THE COUNTY BOARD OF ELECTIONS OF A
10 COUNTY.
11 "GOVERNING BODY." A CITY COUNCIL, BOROUGH COUNCIL,
12 INCORPORATED TOWN COUNCIL, BOARD OF TOWNSHIP COMMISSIONERS,
13 BOARD OF TOWNSHIP SUPERVISORS, A GOVERNING COUNCIL OF A HOME
14 RULE MUNICIPALITY OR OPTIONAL PLAN MUNICIPALITY, A GOVERNING
15 COUNCIL OF ANY SIMILAR GENERAL PURPOSE UNIT OF GOVERNMENT WHICH
16 MAY HEREAFTER BE CREATED BY STATUTE OR A BOARD OF SCHOOL
17 DIRECTORS OF A SCHOOL DISTRICT.
18 "INCOME TAX." AN EARNED INCOME TAX OR A PERSONAL INCOME TAX
19 IMPOSED UNDER THIS CHAPTER.
20 "OCCUPATION TAX." A TAX BASED UPON AN ASSESSED VALUATION OF
21 A PARTICULAR TRADE, OCCUPATION OR PROFESSION. THE TERM INCLUDES
22 A TAX IMPOSED ON A FLAT RATE ON ALL TRADES, OCCUPATIONS OR
23 PROFESSIONS. THE TERM DOES NOT INCLUDE A TAX UPON PERSONS
24 EMPLOYED IN A TAXING DISTRICT, COMMONLY KNOWN AS AN OCCUPATIONAL
25 PRIVILEGE TAX.
26 "PERSONAL INCOME TAX." A TAX ON INCOME ENUMERATED UNDER
27 SECTION 303 OF THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS
28 THE TAX REFORM CODE OF 1971, AS DETERMINED BY THE DEPARTMENT OF
29 REVENUE, SUBJECT TO ANY CORRECTION OR FRAUD, EVASION OR ERROR AS
30 FINALLY DETERMINED BY THE COMMONWEALTH AND LEVIED PURSUANT TO
20070S0763B2500 - 32 -
1 THE ACT OF JUNE 27, 2006 (1ST SP.SESS., P.L.1873, NO.1), KNOWN
2 AS THE TAXPAYER RELIEF ACT.
3 "POLITICAL SUBDIVISION." ANY CITY, BOROUGH, INCORPORATED
4 TOWN, TOWNSHIP OR SCHOOL DISTRICT.
5 "TAXPAYER RELIEF ACT." THE ACT OF JUNE 27, 2006 (1ST
6 SP.SESS., P.L.1873, NO.1), KNOWN AS THE TAXPAYER RELIEF ACT.
7 SECTION 403. OCCUPATION TAX REPLACEMENT GENERALLY.
8 A POLITICAL SUBDIVISION THAT LEVIES AN OCCUPATION TAX MAY
9 REPLACE THE REVENUES PROVIDED BY THE OCCUPATION TAX BY
10 INCREASING THE RATE OF THE INCOME TAX AS PROVIDED IN THIS
11 CHAPTER.
12 SECTION 404. INCOME TAX RATE LIMITS.
13 (A) INCOME TAX RATE LIMITS.--FOR THE FIRST FISCAL YEAR
14 BEGINNING AFTER APPROVAL OF THE REFERENDUM UNDER SECTION 407 AND
15 EACH FISCAL YEAR THEREAFTER, THE GOVERNING BODY OF A POLITICAL
16 SUBDIVISION USING THE PROCEDURES AUTHORIZED BY THIS CHAPTER
17 SHALL BE AUTHORIZED TO IMPOSE AN INCOME TAX AT A RATE NOT
18 EXCEEDING THE MAXIMUM INCOME TAX RATE AS CALCULATED UNDER
19 SUBSECTION (B) OR (B.1).
20 (B) CALCULATION OF MAXIMUM EARNED INCOME TAX RATE.--THE
21 MAXIMUM EARNED INCOME TAX RATE SHALL BE DETERMINED BY TAKING THE
22 SUM OF THE RATES CALCULATED UNDER PARAGRAPHS (1) AND (2) AND
23 LIMITED BY PARAGRAPH (3):
24 (1) THE RATE OF THE EARNED INCOME TAX THAT WOULD HAVE
25 RESULTED IN THE COLLECTION BY THE POLITICAL SUBDIVISION OF AN
26 AMOUNT EQUAL TO THE AMOUNT COLLECTED FROM THE OCCUPATION TAX.
27 THE CALCULATION BY A SCHOOL DISTRICT UNDER THIS PARAGRAPH
28 SHALL BE MADE USING ACTUAL REVENUE COLLECTIONS FOR THE FISCAL
29 YEAR ENDING IN 2002. THE CALCULATION BY A MUNICIPALITY UNDER
30 THIS PARAGRAPH SHALL BE MADE USING ACTUAL REVENUE COLLECTIONS
20070S0763B2500 - 33 -
1 FOR THE CALENDAR YEAR ENDING DECEMBER 31, 2001.
2 (2) THE RATE AT WHICH THE EARNED INCOME TAX WAS
3 COLLECTED BY A SCHOOL DISTRICT FOR THE FISCAL YEAR ENDING IN
4 2002 OR THE RATE AT WHICH THE EARNED INCOME TAX WAS COLLECTED
5 BY A MUNICIPALITY FOR THE CALENDAR YEAR ENDING DECEMBER 31,
6 2001.
7 (3) THE TAX RATE DETERMINED UNDER PARAGRAPHS (1) AND (2)
8 SHALL BE ROUNDED OFF TO THE NEAREST INCREMENT OF TEN
9 HUNDREDTHS OF ONE PERCENT.
10 THE MAXIMUM RATE OF THE EARNED INCOME TAX CALCULATED UNDER THIS
11 SUBSECTION SHALL NOT BE SUBJECT TO THE LIMITS ON THE EARNED
12 INCOME TAX SPECIFIED IN SECTION 311(3).
13 (B.1) CALCULATION OF MAXIMUM INCOME TAX RATE.--THE MAXIMUM
14 INCOME TAX RATE FOR A SCHOOL DISTRICT THAT LEVIED AN OCCUPATION
15 TAX FOR THE FISCAL YEAR ENDING IN 2009 OR A MUNICIPALITY THAT
16 LEVIED AN OCCUPATION TAX FOR THE CALENDAR YEAR ENDING DECEMBER
17 31, 2008, SHALL BE DETERMINED BY TAKING THE SUM OF THE RATES
18 CALCULATED UNDER PARAGRAPHS (1) AND (2) AND LIMITED BY PARAGRAPH
19 (3):
20 (1) THE RATE OF THE INCOME TAX THAT WOULD HAVE RESULTED
21 IN THE COLLECTION BY THE POLITICAL SUBDIVISION OF AN AMOUNT
22 EQUAL TO THE AMOUNT COLLECTED FROM THE OCCUPATION TAX. THE
23 CALCULATION BY A SCHOOL DISTRICT UNDER THIS PARAGRAPH SHALL
24 BE MADE USING ACTUAL REVENUE COLLECTIONS FOR THE FISCAL YEAR
25 ENDING IN 2009. THE CALCULATION BY A MUNICIPALITY UNDER THIS
26 PARAGRAPH SHALL BE MADE USING ACTUAL REVENUE COLLECTIONS FOR
27 THE CALENDAR YEAR ENDING DECEMBER 31, 2008.
28 (2) THE RATE AT WHICH THE INCOME TAX WAS COLLECTED BY A
29 SCHOOL DISTRICT FOR THE FISCAL YEAR ENDING IN 2009 OR THE
30 RATE AT WHICH AN EARNED INCOME TAX WAS COLLECTED BY A
20070S0763B2500 - 34 -
1 MUNICIPALITY FOR THE CALENDAR YEAR ENDING DECEMBER 31, 2008.
2 (3) THE TAX RATE DETERMINED UNDER PARAGRAPHS (1) AND (2)
3 SHALL BE ROUNDED OFF TO THE NEAREST INCREMENT OF TEN
4 HUNDREDTHS OF ONE PERCENT.
5 THE MAXIMUM RATE OF THE INCOME TAX CALCULATED UNDER THIS
6 SUBSECTION SHALL NOT BE SUBJECT TO THE LIMITS ON THE EARNED
7 INCOME TAX SPECIFIED UNDER SECTION 311(3).
8 (C) OTHER RATES OF TAXATION.--IF A MUNICIPALITY OR SCHOOL
9 DISTRICT, BOTH OF WHICH IMPOSE AN EARNED INCOME TAX ON THE SAME
10 INDIVIDUAL UNDER THIS ACT OR THE TAXPAYER RELIEF ACT AND BOTH OF
11 WHICH ARE LIMITED TO OR HAVE AGREED UPON A DIVISION OF THE TAX
12 RATE IN ACCORDANCE WITH SECTION 311 OR 304 OF THE TAXPAYER
13 RELIEF ACT, AND THE MUNICIPALITY OR SCHOOL DISTRICT RECEIVES
14 VOTER APPROVAL UNDER SECTION 407 AND OPTS TO INCREASE THE RATE
15 OF INCOME TAX IN EXCESS OF THAT LIMIT OR AGREEMENT, THEN THE
16 MUNICIPALITY OR SCHOOL DISTRICT WHICH DOES NOT RECEIVE VOTER
17 APPROVAL SHALL REMAIN SUBJECT TO THAT LIMIT OR AGREEMENT.
18 SECTION 405. OCCUPATION TAX PROHIBITED.
19 (A) GENERAL RULE.--FOR THE FIRST FISCAL YEAR BEGINNING AFTER
20 APPROVAL OF THE REFERENDUM REQUIRED UNDER SECTION 407 AND EACH
21 FISCAL YEAR THEREAFTER, A POLITICAL SUBDIVISION IS PROHIBITED
22 FROM LEVYING, ASSESSING OR COLLECTING AN OCCUPATION TAX.
23 (B) OCCUPATION ASSESSMENT TAX ROLL.--IN A COUNTY WHERE NO
24 POLITICAL SUBDIVISION LEVIES THE TAX, THE COUNTY SHALL NOT BE
25 REQUIRED UNDER THE PROVISIONS OF THIS OR ANOTHER STATUTE TO
26 MAINTAIN THE OCCUPATION ASSESSMENT TAX ROLL.
27 (C) APPLICABILITY.--THIS SECTION SHALL NOT APPLY TO THE
28 COLLECTION OF DELINQUENT OCCUPATION TAXES.
29 SECTION 406. RESOLUTION REQUIRED.
30 THE GOVERNING BODY MAY SEEK AUTHORITY TO INCREASE THE MAXIMUM
20070S0763B2500 - 35 -
1 LIMITS OF THE INCOME TAX BY ADOPTING A RESOLUTION TO PLACE A
2 REFERENDUM ON THE BALLOT PURSUANT TO SECTION 407. THE GOVERNING
3 BODY SHALL TRANSMIT A COPY OF THE RESOLUTION TO THE APPROPRIATE
4 ELECTION OFFICIALS. PRIOR TO APPROVING THE RESOLUTION, THE
5 GOVERNING BODY SHALL:
6 (1) GIVE PUBLIC NOTICE OF ITS INTENT TO ADOPT THE
7 RESOLUTION IN THE MANNER PROVIDED BY SECTION 306.
8 (2) CONDUCT AT LEAST ONE PUBLIC HEARING REGARDING
9 ELIMINATING THE OCCUPATION TAX AND INCREASING THE MAXIMUM
10 RATE OF THE INCOME TAX.
11 SECTION 407. BINDING REFERENDUM.
12 (A) REFERENDUM TO BE HELD.--A POLITICAL SUBDIVISION MAY
13 INCREASE THE MAXIMUM RATE OF THE INCOME TAX ONLY BY OBTAINING
14 THE APPROVAL OF THE ELECTORATE OF THE AFFECTED POLITICAL
15 SUBDIVISION IN A PUBLIC REFERENDUM AT THE GENERAL OR MUNICIPAL
16 ELECTION PRECEDING THE FISCAL YEAR WHEN THE MAXIMUM RATE OF THE
17 INCOME TAX WILL BE INCREASED. THE ELECTION OFFICIALS SHALL CAUSE
18 A QUESTION TO BE PLACED ON THE BALLOT AT THE FIRST GENERAL OR
19 MUNICIPAL ELECTION OCCURRING AT LEAST 90 DAYS AFTER THEIR
20 RECEIPT OF THE RESOLUTION REQUIRED IN SECTION 406.
21 (B) CONTENTS OF QUESTION.--THE REFERENDUM QUESTION MUST
22 STATE THE MAXIMUM RATE OF THE INCOME TAX CALCULATED UNDER
23 SECTION 404 AND THAT THE ADDITIONAL REVENUE GENERATED BY AN
24 INCREASE IN THE INCOME TAX WILL BE USED TO ELIMINATE THE
25 OCCUPATION TAX. THE QUESTION SHALL BE IN CLEAR LANGUAGE THAT IS
26 READILY UNDERSTANDABLE BY A LAYPERSON. FOR THE PURPOSE OF
27 ILLUSTRATION, A REFERENDUM QUESTION MAY BE FRAMED AS FOLLOWS:
28 DO YOU FAVOR INCREASING THE RATE OF THE (EARNED OR
29 PERSONAL) INCOME TAX TO A MAXIMUM OF X%, WITH THE
30 REQUIREMENT THAT THE INCREASE BE USED TO ELIMINATE THE
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1 OCCUPATION TAX?
2 (C) VOTE.--IF A MAJORITY OF THE ELECTORS VOTING ON THE
3 QUESTION VOTE "YES," THEN THE GOVERNING BODY SHALL BE AUTHORIZED
4 TO IMPLEMENT AN INCREASE IN THE INCOME TAX PURSUANT TO SECTION
5 404 AND SHALL BE REQUIRED TO ELIMINATE THE OCCUPATION TAX AS
6 REQUIRED BY SECTION 405. IF A MAJORITY OF THE ELECTORS VOTING ON
7 THE QUESTION VOTE "NO," THE GOVERNING BODY SHALL HAVE NO
8 AUTHORITY TO INCREASE THE RATE OF THE INCOME TAX ABOVE THE
9 MAXIMUM RATE OTHERWISE PROVIDED BY LAW.
10 (D) VOTING PROCEEDINGS.--PROCEEDINGS UNDER THIS SECTION
11 SHALL BE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT OF JUNE 3,
12 1937 (P.L.1333, NO.320), KNOWN AS THE PENNSYLVANIA ELECTION
13 CODE.
14 SECTION 408. APPLICABILITY.
15 THIS CHAPTER SHALL APPLY TO POLITICAL SUBDIVISIONS WHICH LEVY
16 AN OCCUPATION TAX ON THE DATE OF ENACTMENT OF THIS SECTION.
17 SECTION 409. APPLICABILITY OF PERSONAL INCOME TAX.
18 NOTHING IN THIS CHAPTER SHALL BE CONSTRUED TO AUTHORIZE A
19 MUNICIPALITY TO LEVY, ASSESS OR COLLECT A PERSONAL INCOME TAX.
20 THE AUTHORITY TO LEVY, ASSESS OR COLLECT A PERSONAL INCOME TAX
21 SHALL ONLY APPLY TO A SCHOOL DISTRICT IN WHICH A BOARD OF SCHOOL
22 DIRECTORS SOUGHT TO IMPOSE A PERSONAL INCOME TAX UNDER SECTION
23 321(C) OF THE TAXPAYER RELIEF ACT AND THE REFERENDUM UNDER
24 SECTION 331.2 OR 332 OF THE TAXPAYER RELIEF ACT IS APPROVED BY
25 THE ELECTORATE UNDER THE TAXPAYER RELIEF ACT.
26 SECTION 3. REPEALS ARE AS FOLLOWS:
27 (1) THE GENERAL ASSEMBLY DECLARES THAT THE REPEALS UNDER
28 PARAGRAPHS (2) AND (3) ARE NECESSARY TO EFFECTUATE THE
29 PROVISIONS OF THIS ACT.
30 (2) THE ACT OF JUNE 22, 2001 (P.L.374, NO.24), KNOWN AS
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1 THE OPTIONAL OCCUPATION TAX ELIMINATION ACT, IS REPEALED.
2 (3) THE LAST SENTENCE OF SECTION 303(1) OF THE ACT OF
3 JUNE 27, 2006 (1ST SP.SESS., P.L.1873, NO.1), KNOWN AS THE
4 TAXPAYER RELIEF ACT, IS REPEALED.
5 SECTION 2 4. THE AMENDMENT OF SECTION 2 301.1(F)(1) OF THE <--
6 ACT SHALL NOT APPLY TO MUNICIPALITIES IMPOSING A TAX ON LEASES
7 OR LEASE TRANSACTIONS PRIOR TO JULY 1, 2007 2008. <--
8 SECTION 3 5. THIS ACT SHALL TAKE EFFECT IMMEDIATELY. <--
D4L53AJM/20070S0763B2500 - 38 -