HOUSE AMENDED PRIOR PRINTER'S NOS. 1366, 1618, 1875, PRINTER'S NO. 2186 1988
No. 1063 Session of 2007
INTRODUCED BY EARLL, BROWNE, WOZNIAK, BOSCOLA, EICHELBERGER, FERLO, FOLMER, KITCHEN, MADIGAN, PUNT, SCARNATI, WASHINGTON, D. WHITE, M. WHITE, C. WILLIAMS, MELLOW AND ARMSTRONG, SEPTEMBER 10, 2007
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 16, 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," in 22 local tax, further providing for definitions, for delegation 23 of tax powers and restrictions, for recapture of tax, for 24 payroll tax, for nonresident sports facility usage fees, for 25 vacation of tax ordinances and resolutions, for advertising 26 tax ordinances, for second class city tax rates, for taxpayer 27 appeals, for filing ordinances, for limitation on tax rates, 28 for withholding of local services taxes, for administrative 29 personnel and joint agreements, for audits of earned income
1 and other taxes, for payment of tax to other taxing 2 authorities as credits or deductions, for personal property, 3 for assessment limitations and for tax limitations; providing 4 for legal representation, for restricted use, for 5 consolidated collection of local income taxes, for collection 6 of delinquent taxes and for miscellaneous provisions; further 7 providing for penalties and for repeals; and making editorial 8 changes. 9 The General Assembly of the Commonwealth of Pennsylvania 10 hereby enacts as follows: 11 Section 1. The act of December 31, 1965 (P.L.1257, No.511), 12 known as The Local Tax Enabling Act, is amended by adding a 13 chapter heading to read: 14 CHAPTER 1 15 PRELIMINARY PROVISIONS 16 Section 2. Section 1 of the act is renumbered to read: 17 Section [1] 101. Short Title.--This act shall be known and 18 may be cited as "The Local Tax Enabling Act." 19 Section 3. The act is amended by adding a chapter heading to 20 read: 21 CHAPTER 3 22 LOCAL TAXES 23 Section 3.1. The act is amended by adding a section to read: 24 Section 301. Definitions.--(a) The following words and 25 phrases when used in this chapter shall have the meanings given 26 to them in this section unless the context clearly indicates 27 otherwise: 28 "Family farm corporation" means a Pennsylvania corporation at 29 least seventy-five percent of the assets of which are devoted to 30 the business of agriculture, which business, for the purposes of 31 this definition, shall not be deemed to include: 32 (i) recreational activities, such as, but not limited to, 33 hunting, fishing, camping, skiing, show competition or racing; 20070S1063B2186 - 2 -
1 (ii) the raising, breeding or training of game animals or 2 game birds, fish, cats, dogs or pets or animals intended for use 3 in sporting or recreational activities; 4 (iii) fur farming; 5 (iv) stockyard and slaughterhouse operations; or 6 (v) manufacturing or processing operations of any kind: 7 Provided, however, That at least seventy-five percent of all of 8 the stock of the corporation must be owned by members of the 9 same family. 10 "Members of the same family" means an individual, such 11 individual's brothers and sisters, the brothers and sisters of 12 such individual's parents and grandparents, the ancestors and 13 lineal descendents of any of the foregoing and a spouse of any 14 of the foregoing. Individuals related by the half blood or by 15 legal adoption shall be treated as if they were related by the 16 whole blood. 17 (b) As used in this chapter, the terms "business entity," 18 "earned income," "employer," "net profits," "private agency" <-- 19 AGENCY," "PUBLIC AGENCY" and "tax bureau" shall have the same <-- 20 meanings as those terms are given in section 501. 21 Section 4. Section 2 of the act, amended June 21, 2007 22 (P.L.13, No.7), is renumbered and amended to read: 23 Section [2] 301.1. Delegation of Taxing Powers and 24 Restrictions Thereon.--(a) The duly constituted authorities of 25 the following political subdivisions, cities of the second 26 class, cities of the second class A, cities of the third class, 27 boroughs, towns, townships of the first class, townships of the 28 second class, school districts of the second class, school 29 districts of the third class, and school districts of the fourth 30 class, in all cases including independent school districts may, 20070S1063B2186 - 3 -
1 in their discretion, by ordinance or resolution, for general
2 revenue purposes, levy, assess and collect or provide for the
3 levying, assessment and collection of such taxes as they shall
4 determine on persons, transactions, occupations, privileges,
5 subjects and personal property within the limits of such
6 political subdivisions, and upon the transfer of real property,
7 or of any interest in real property, situate within the
8 political subdivision levying and assessing the tax, regardless
9 of where the instruments making the transfers are made, executed
10 or delivered or where the actual settlements on such transfer
11 take place. The taxing authority may provide that the transferee
12 shall remain liable for any unpaid realty transfer taxes imposed
13 by virtue of this [act] chapter.
14 (b) Each local taxing authority may, by ordinance or
15 resolution, exempt any person whose total income from all
16 sources is less than twelve thousand dollars ($12,000) per annum
17 from the per capita or similar head tax, occupation tax or
18 earned income tax, or any portion thereof, and may adopt
19 regulations for the processing of claims for exemptions.
20 (c) (1) Each political subdivision levying the local
21 services tax shall exempt the following persons from the local
22 services tax:
23 (i) Any person who has served in any war or armed conflict
24 in which the United States was engaged and is honorably
25 discharged or released under honorable circumstances from active
26 service if, as a result of military service, the person is
27 blind, paraplegic or a double or quadruple amputee or has a
28 service-connected disability declared by the United States
29 Veterans' Administration or its successor to be a total one
30 hundred percent permanent disability.
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1 (ii) Any person who serves as a member of a reserve 2 component of the armed forces and is called to active duty at 3 any time during the taxable year. 4 (2) For purposes of this subsection, "reserve component of 5 the armed forces" shall mean the United States Army Reserve, 6 United States Navy Reserve, United States Marine Corps Reserve, 7 United States Coast Guard Reserve, United States Air Force 8 Reserve, the Pennsylvania Army National Guard or the 9 Pennsylvania Air National Guard. 10 (d) Each political subdivision levying the local services 11 tax at a rate exceeding ten dollars ($10) shall, and each 12 political subdivision levying the local services tax at a rate 13 of ten dollars ($10) or less may, by ordinance or resolution, 14 exempt any person from the local services tax whose total earned 15 income and net profits from all sources within the political 16 subdivision is less than twelve thousand dollars ($12,000) for 17 the calendar year in which the local services tax is levied. 18 (e) (1) A person seeking to claim an exemption from the 19 local services tax may annually file an exemption certificate 20 with the political subdivision levying the tax and with the 21 person's employer affirming that the person reasonably expects 22 to receive earned income and net profits from all sources within 23 the political subdivision of less than twelve thousand dollars 24 ($12,000) in the calendar year for which the exemption 25 certificate is filed. In the event the political subdivision 26 utilizes a tax collection officer pursuant to section 10 of this 27 act, the political subdivision shall provide a copy of the 28 exemption certificate to that officer. The exemption certificate 29 shall have attached to it a copy of all the employe's last pay 30 stubs or W-2 forms from employment within the political 20070S1063B2186 - 5 -
1 subdivision for the year prior to the fiscal year for which the 2 employe is requesting to be exempted from the local services 3 tax. Upon receipt of the exemption certificate and until 4 otherwise instructed by the political subdivision levying the 5 tax or except as required by clause (2), the employer shall not 6 withhold the tax from the person during the calendar year or the 7 remainder of the calendar year for which the exemption 8 certificate applies. Employers shall ensure that the exemption 9 certificate forms are readily available to employes at all times 10 and shall furnish each new employe with a form at the time of 11 hiring. The Department of Community and Economic Development 12 shall develop and make available to political subdivisions and 13 employers uniform exemption certificates required by this 14 clause. 15 (2) With respect to a person who claimed an exemption for a 16 given calendar year from the local services tax, upon 17 notification to an employer by the person or by the political 18 subdivision that the person has received earned income and net 19 profits from all sources within that political subdivision equal 20 to or in excess of twelve thousand dollars ($12,000) in that 21 calendar year or that the person is otherwise ineligible for the 22 tax exemption for that calendar year, or upon an employer's 23 payment to the person of earned income within that political 24 subdivision in an amount equal to or in excess of twelve 25 thousand dollars ($12,000) in that calendar year, an employer 26 shall withhold the local services tax from the person under 27 clause (3). 28 (3) If a person who claimed an exemption for a given 29 calendar year from the local services tax becomes subject to the 30 tax for the calendar year under clause (2), the employer shall 20070S1063B2186 - 6 -
1 withhold the tax for the remainder of that calendar year. The 2 employer shall withhold from the person, for the first payroll 3 period after receipt of the notification under clause (2), a 4 lump sum equal to the amount of tax that was not withheld from 5 the person due to the exemption claimed by the person under this 6 subsection, plus the per payroll amount due for that first 7 payroll period. The amount of tax withheld per payroll period 8 for the remaining payroll periods in that calendar year shall be 9 the same amount withheld for other employes. In the event the 10 employment of a person subject to withholding of the tax under 11 this clause is subsequently severed in that calendar year, the 12 person shall be liable for any outstanding balance of tax due, 13 and the political subdivision levying the tax may pursue 14 collection under this act. 15 (4) Except as provided in clause (2), it is the intent of 16 this subsection that employers shall not be responsible for 17 investigating exemption certificates, monitoring tax exemption 18 eligibility or exempting any employe from a local services tax. 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 20070S1063B2186 - 7 -
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 20070S1063B2186 - 8 -
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 on a conveyance to a trustee under a 6 recorded trust agreement for the express purpose of holding 7 title in trust as security for a debt contracted at the time of 8 the conveyance under which the trustee is not the lender and 9 requiring the trustee to make reconveyance to the grantor- 10 borrower upon the repayment of the debt, or a transfer within a 11 family from a sole proprietor family member to a family farm 12 corporation, or in any sheriff sale instituted by a mortgagee in 13 which the purchaser of said sheriff sale is the mortgagee who 14 instituted said sale, or on a privilege, transaction, subject, 15 occupation or personal property which is now or does hereafter 16 become subject to a State tax or 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 20070S1063B2186 - 9 -
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 20070S1063B2186 - 10 -
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 20070S1063B2186 - 11 -
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 20070S1063B2186 - 12 -
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 20070S1063B2186 - 13 -
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 9 of this act, whichever is later, shall not be subject 13 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 20070S1063B2186 - 14 -
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. 20070S1063B2186 - 15 -
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 [(g) For the purposes of this section, the terms "earned 25 income" and "net profits" shall have the same meanings as those 26 terms are given in Division I of section 13.] 27 Section 5. Section 2.1 of the act, added October 11, 1984 28 (P.L.885, No.172), is renumbered and amended to read: 29 Section [2.1] 302. Recapture of Tax.--(a) Notwithstanding 30 the provisions of section [2(1) of this act] 301.1(f)(1), if any 20070S1063B2186 - 16 -
1 stock of a family farm corporation is transferred to a person
2 who is not a family member within ten years from the date of the
3 conveyance from a sole proprietor family member to a family farm
4 corporation, the tax imposed by this article shall become
5 immediately due and payable.
6 [(b) As used in this act:
7 "Family farm corporation" means a Pennsylvania corporation at
8 least seventy-five percent of the assets of which are devoted to
9 the business of agriculture, which business, for the purposes of
10 this definition, shall not be deemed to include (i) recreational
11 activities such as, but not limited to, hunting, fishing,
12 camping, skiing, show competition or racing; (ii) the raising,
13 breeding or training of game animals or game birds, fish, cats,
14 dogs or pets or animals intended for use in sporting or
15 recreational activities; (iii) fur farming; (iv) stockyard and
16 slaughterhouse operations; or (v) manufacturing or processing
17 operations of any kind: Provided, however, That at least
18 seventy-five percent of all of the stock of the corporation must
19 be owned by members of the same family.
20 "Members of the same family" means an individual, such
21 individual's brothers and sisters, the brothers and sisters of
22 such individual's parents and grandparents, the ancestors and
23 lineal descendents of any of the foregoing and a spouse of any
24 of the foregoing. Individuals related by the half blood or by
25 legal adoption shall be treated as if they were related by the
26 whole blood.]
27 Section 6. Sections 2.2 and 2.3 of the act, added December
28 1, 2004 (P.L.1729, No.222), are renumbered and amended to read:
29 Section [2.2] 303. Payroll Tax.--(a) A city of the second
30 class may levy, assess or collect a tax that does not exceed
20070S1063B2186 - 17 -
1 fifty-five hundredths percent on payroll amounts generated as a
2 result of an employer conducting business activity within a city
3 of the second class. For purposes of a payroll tax levied,
4 assessed or collected by a city of the second class, the
5 business activity shall be directly attributable to activity
6 within a city of the second class. For purposes of computation
7 of the payroll tax imposed pursuant to this section, the payroll
8 amount attributable to the city shall be determined by applying
9 an apportionment factor to total payroll expense based on that
10 portion of payroll expense which the total number of days an
11 employe, partner, member, shareholder or other individual works
12 within the city bears to the total number of days such employe
13 or person works within and outside of the city.
14 (a.1) A charitable organization that qualifies for tax
15 exemption pursuant to the act of November 26, 1997 (P.L.508,
16 No.55), known as the "Institutions of Purely Public Charity
17 Act," shall calculate the tax that would otherwise be
18 attributable to the city, but shall only pay the tax on that
19 portion of its payroll expense attributable to business activity
20 for which a tax may be imposed pursuant to section 511 of the
21 Internal Revenue Code of 1986 (Public Law [95-223] 99-514, 26
22 U.S.C. § 1 et seq.). If the charity has purchased or is
23 operating branches, affiliates, subsidiaries or other business
24 entities that do not independently meet the standards of the
25 "Institutions of Purely Public Charity Act," the tax shall be
26 paid on the payroll attributable to such for-profit branches,
27 affiliates or subsidiaries, whether or not the employes are
28 leased or placed under the auspices of the charity's umbrella or
29 parent organization. Nothing in this subsection shall restrict
30 the ability of a charitable organization to contract with the
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1 city to provide services to the city in lieu of some or all 2 taxes due under this section. 3 (b) For purposes of the payroll tax assessed pursuant to 4 this section, an employer is conducting business within a city 5 of the second class if the employer engages, hires, employs or 6 contracts with one or more individuals as employes and, in 7 addition, the employer does at least one of the following: 8 (1) maintains a fixed place of business within the city; 9 (2) owns or leases real property within the city for 10 purposes of such business; 11 (3) maintains a stock of tangible personal property in the 12 city for sale in the ordinary course of such business; 13 (4) conducts continuous solicitation within the city related 14 to such business; or 15 (5) utilizes the streets of the city in connection with the 16 operation of such business other than transportation through the 17 city. 18 (c) All employers in a city of the second class shall file 19 quarterly returns and make quarterly payments as provided for by 20 ordinance enacted by a city of the second class. Every employer 21 making a return shall certify the correctness thereof. A city of 22 the second class may audit, examine or inspect the books, 23 records or accounts of all employers subject to the tax imposed 24 pursuant to this section. 25 (d) A city of the second class may enact ordinances and 26 regulations necessary to implement this section. The ordinance 27 levying the tax authorized by this section shall permanently 28 replace the city's existing mercantile tax and shall reduce the 29 business privilege tax rate as follows: 30 (1) In tax years 2005 and 2006, the business privilege tax 20070S1063B2186 - 19 -
1 shall be two mills.
2 (2) In tax years 2007, 2008 and 2009, the business privilege
3 tax shall be one mill unless the revenues collected from the
4 payroll expense tax exceed fifty million five hundred thousand
5 dollars ($50,500,000) in any fiscal year, at which time the
6 business privilege tax shall be replaced for the subsequent
7 fiscal year. After the phaseout of the business privilege tax,
8 all amounts of moneys in excess of fifty million five hundred
9 thousand dollars ($50,500,000) shall be used by the city of the
10 second class to further accelerate the reduction of the tax
11 imposed by the city of the second class on parking as provided
12 in section [5.1] 308.
13 (3) In tax year 2010 and thereafter, the business privilege
14 tax may not be imposed.
15 (e) All taxes, additions and penalties collected pursuant to
16 this section shall be used by a city of the second class
17 exclusively for the general revenue purposes of the city.
18 (f) An employer shall not offset the amount of tax paid
19 pursuant to this section by reducing compensation or benefits
20 paid to employes.
21 (g) A city of the second class may bring suit for the
22 recovery of taxes due and unpaid under this section. Any suit
23 brought to recover the tax imposed by this section shall be
24 commenced within three years after such tax is due or within
25 three years after the declaration or return has been filed,
26 whichever is later: Provided, however, That this limitation
27 shall not prevent the institution of a suit for the collection
28 of any tax due or determined to be due in the following cases:
29 (1) Where no declaration or return was filed by any person
30 although a declaration or return was required to be filed by him
20070S1063B2186 - 20 -
1 under provisions of this section, there shall be no limitation. 2 (2) Where an examination of the declaration or return filed 3 by any person or of other evidence relating to such declaration 4 or return in the possession of the city of the second class 5 reveals a fraudulent evasion of taxes, there shall be no 6 limitation. 7 (3) In the case of substantial understatement of tax 8 liability of twenty-five percent or more and no fraud, suit 9 shall be begun within six years. 10 (4) This section shall not be construed to limit the 11 governing body from recovering delinquent taxes by any other 12 means provided by law. 13 (h) If for any reason the payroll tax is not paid when due, 14 interest at the rate of six percent per annum on the amount of 15 said tax and an additional penalty of one percent of the amount 16 of the unpaid tax for each month or fraction thereof during 17 which the tax remains unpaid shall be added and collected. Where 18 suit is brought for the recovery of any such tax, the employer 19 shall, in addition, be liable for the costs of collection and 20 the interest and penalties herein imposed. A city of the second 21 class may, by ordinance or resolution, establish a one-time 22 period during which interest or interest and penalties that 23 would otherwise be imposed for the nonreporting or 24 underreporting of payroll tax liabilities or for the nonpayment 25 of payroll taxes previously imposed and due shall be waived in 26 total or in part if the taxpayer voluntarily files delinquent 27 returns and pays the taxes in full during the period so 28 established. 29 (i) In addition to any other additions, penalties or 30 enforcement proceedings provided for by ordinance of a city of 20070S1063B2186 - 21 -
1 the second class or a law of this Commonwealth for the 2 collection and enforcement of taxes or the submission of 3 information to a government entity: 4 (1) Any employer who wilfully makes any false or untrue 5 statement on the employer's return commits a misdemeanor of the 6 second degree and shall, upon conviction, be sentenced to pay a 7 fine of not more than two thousand dollars ($2,000) or to 8 imprisonment for not more than two years, or both. 9 (2) Any employer who wilfully fails or refuses to file a 10 return required by this section commits a misdemeanor of the 11 third degree and shall, upon conviction, be sentenced to pay a 12 fine of not more than one thousand dollars ($1,000) or to 13 imprisonment for not more than one year, or both. 14 (3) Any person who wilfully fails or refuses to appear 15 before the collector in person with the employer's books, 16 records or accounts for examination when required under the 17 provisions of this section or of an ordinance to do so, or who 18 wilfully refuses to permit inspection of the books, records or 19 accounts of any employer in the person's custody or control when 20 the right to make such inspection by the collector is requested, 21 commits a misdemeanor and shall, upon conviction, be sentenced 22 to pay a fine of not more than five hundred dollars ($500) or to 23 imprisonment for not more than six months, or both. 24 (j) As used in this section: 25 "Employer" means all persons conducting business activity 26 within a city of the second class except for a governmental 27 entity. 28 "Payroll amounts" means all amounts paid by an employer as 29 salaries, wages, commissions, bonuses, net earnings and 30 incentive payments, whether based on profits or otherwise, fees 20070S1063B2186 - 22 -
1 and similar remuneration for services rendered, whether directly 2 or through an agent and whether in cash, in property or the 3 right to receive property. 4 Section [2.3] 304. Nonresident Sports Facility Usage Fee.--A 5 city of the second class in which is located a sports stadium or 6 arena that has received public funds in connection with its 7 construction or maintenance may enact a publicly funded facility 8 usage fee upon those nonresident individuals who use such 9 facility to engage in an athletic event or otherwise render a 10 performance for which they receive remuneration. The fee may be 11 a flat dollar amount or a percentage of the individual's income 12 attributable to such individual's usage of the facility. If the 13 fee is a percentage, it may not exceed three percent of the 14 earned income of the individual attributable to the usage of the 15 facility. If any fee is imposed, those individuals liable for 16 the fee shall be exempt from any earned income tax imposed by 17 the city of the second class pursuant to this [act] chapter and 18 any such tax imposed under section 652.1 of the act of March 10, 19 1949 (P.L.30, No.14), known as the "Public School Code of 1949." 20 Should a court of competent jurisdiction determine this 21 provision to be invalid for any reason, persons subject to the 22 publicly funded facility usage fee shall not be exempt from any 23 previously applicable earned income tax. 24 Section 7. Section 3 of the act is renumbered and amended to 25 read: 26 Section [3] 305. Vacation of Tax Ordinances and Resolutions 27 by State Tax Measures.--If, subsequent to the passage of any 28 ordinance or resolution under the authority of this [act] 29 chapter, the General Assembly shall impose a tax or license fee 30 on any privilege, transactions, subject or occupation, or on 20070S1063B2186 - 23 -
1 personal property or on sales of admission to places of 2 amusement or on sales or other transfer of title or possession 3 of property taxed by any such political subdivision hereunder, 4 the act of Assembly imposing the State tax or license fee 5 thereon shall automatically vacate the ordinance or resolution 6 passed under the authority of this [act] chapter as to all taxes 7 accruing subsequent to the end of the current fiscal year of 8 such political subdivision. It is the intention of this section 9 to confer upon such political subdivision the power to levy, 10 assess and collect taxes upon any and all subjects of taxation, 11 except as above restricted and limited, which the Commonwealth 12 has power to tax but which it does not tax or license, subject 13 only to the foregoing provision that any tax or license shall 14 automatically terminate at the end of the current fiscal year of 15 the political subdivision. 16 Section 8. Sections 4 and 5 of the act, amended October 9, 17 1967 (P.L.361, No.160), are renumbered and amended to read: 18 Section [4] 306. Advertisement of Intention to Adopt Tax 19 Ordinance or Resolution.--Prior to the passage of any ordinance 20 or the adoption of any resolution imposing a tax or license fee 21 under the authority hereunder granted, such political 22 subdivision shall give notice of the intention to pass such 23 ordinance or adopt such resolution. Such notice shall be given 24 in addition to all other notices required by law to be given and 25 shall set forth the substantial nature of the tax or license fee 26 to be imposed by the proposed ordinance or resolution, the 27 reason which, in the judgment of the officials of the 28 subdivision, necessitates the imposition of the tax, and the 29 amount of revenue estimated to be derived from the tax. 30 Publication of such notice shall be made by advertisement once a 20070S1063B2186 - 24 -
1 week for three weeks in a newspaper of general circulation 2 within such political subdivision if there is such newspaper 3 and, if there is not, then such publication shall be made in a 4 newspaper of general circulation within the county in which the 5 advertising political subdivision is located. 6 Every such tax shall continue in force on a calendar or 7 fiscal year basis, as the case may be, without annual 8 reenactment unless the rate of the tax is subsequently changed. 9 Section [5] 307. Rate, Amount, Court Approval; Revision of 10 Budget.--Any tax imposed under this [act] chapter shall not be 11 subject to any limitations under existing laws as to rate or 12 amount or as to the necessity of securing court approval or as 13 to budgetary requirements. Any city, borough or township 14 imposing a tax under this [act] chapter may revise its budget 15 during any fiscal year by increasing or making additional 16 appropriations from funds to be provided from such tax. 17 The ordinance or resolution may be passed or adopted prior to 18 the beginning of the fiscal year and prior to the preparation of 19 the budget when desirable. 20 Every ordinance or resolution which imposed a tax under the 21 authority of this [act] chapter shall be passed or adopted, if 22 for a school district, during the period other school taxes are 23 required by law to be levied and assessed by such district. Each 24 ordinance and resolution shall state that it is enacted under 25 the authority of this [act] chapter, known as "The Local Tax 26 Enabling Act". 27 Section 9. Section 5.1 of the act, added December 1, 2004 28 (P.L.1729, No.222), is renumbered to read: 29 Section [5.1] 308. Second Class City Parking Tax Rates.--The 30 rate of the tax imposed on parking transactions shall not differ 20070S1063B2186 - 25 -
1 from the rate contained in City of Pittsburgh Ordinance Number 2 43-2003 as of January 1, 2004, except as follows: 3 (1) In tax year 2007, the rate of tax shall not exceed 45%. 4 (2) In tax year 2008, the rate of tax shall not exceed 40%. 5 (3) In tax year 2009, the rate of tax shall not exceed 6 37.5%. 7 (4) In tax year 2010, the rate of tax shall not exceed 35% 8 as existed prior to the adoption of the ordinance. 9 Section 10. Section 6 of the act, repealed in part June 3, 10 1971 (P.L.118, No.6), is renumbered and amended to read: 11 Section [6] 309. Appeals by Taxpayers.--No tax levied for 12 the first time by any political subdivision to which this [act] 13 chapter applies shall go into effect until thirty days from the 14 time of the adoption of the ordinance or resolution levying the 15 tax. Within said thirty days, taxpayers representing twenty-five 16 percent or more of the total valuation of real estate in the 17 political subdivision as assessed for taxation purposes, or 18 taxpayers of the political subdivision not less than twenty-five 19 in number aggrieved by the ordinance or resolution shall have 20 the right to appeal therefrom to the court of quarter sessions 21 of the county upon giving bond with sufficient security in the 22 amount of five hundred dollars ($500), approved by the court, to 23 prosecute the appeal with effect and for the payment of costs. 24 The petition shall set forth the objections to the tax and the 25 facts in support of such objections, and shall be accompanied by 26 the affidavit of at least five of the petitioners that the 27 averments of the petition are true and the petition is not filed 28 for the purpose of delay. 29 No such appeal shall act as a supersedeas unless specifically 30 allowed by the court to which the appeal is taken or a judge 20070S1063B2186 - 26 -
1 thereof. 2 Immediately upon the filing of any such petition, the 3 petitioners shall serve a copy of the petition and any rule 4 granted by the court upon the president, chairman, secretary or 5 clerk of the legislative body levying the tax. 6 The court shall fix a day for a hearing not less than fifteen 7 days nor more than thirty days after the filing of the petition. 8 Notice of the time of such hearing shall be given to all 9 interested parties as the court shall direct. The court shall 10 promptly hear and dispose of the appeal. 11 It shall be the duty of the court to declare the ordinance 12 and the tax imposed thereby to be valid unless it concludes that 13 the ordinance is unlawful or finds that the tax imposed is 14 excessive or unreasonable; but the court shall not interfere 15 with the reasonable discretion of the legislative body in 16 selecting the subjects or fixing the rates of the tax. The court 17 may declare invalid all or any portion of the ordinance or of 18 the tax imposed or may reduce the rates of tax. 19 Section 11. Sections 7, 8 and 9 of the act, amended June 21, 20 2007 (P.L.13, No.7), are renumbered and amended to read: 21 Section [7] 310. Filing of Certified Copies of Ordinances 22 and Resolutions.--When an ordinance or a resolution is first 23 passed or adopted by a political subdivision imposing a tax or 24 license fee under the authority of this [act] chapter, an exact 25 printed or typewritten copy thereof, certified to by the 26 secretary of the taxing body, shall be filed with the Department 27 of Community and Economic Development within fifteen days after 28 the same becomes effective. 29 Any secretary or person acting as the clerk or secretary of 30 the taxing body of any political subdivision during the meeting 20070S1063B2186 - 27 -
1 at which an ordinance or resolution imposing a tax or license 2 fee is passed or adopted as herein provided who shall fail to 3 file the certified copy or statement relative thereto with the 4 Department of Community and Economic Development as herein 5 required, shall, upon summary conviction thereof in the county 6 in which the political subdivision is located, be sentenced to 7 pay a fine of not less than five dollars ($5) nor more than 8 twenty-five dollars ($25), and the costs of prosecution. 9 Section [8] 311. Limitations on Rates of Specific Taxes.--No 10 taxes levied under the provisions of this [act] chapter shall be 11 levied by any political subdivision on the following subjects 12 exceeding the rates specified in this section: 13 (1) Per capita, poll or other similar head taxes, ten 14 dollars ($10). 15 (2) On each dollar of the whole volume of business 16 transacted by wholesale dealers in goods, wares and merchandise, 17 one mill, by retail dealers in goods, wares and merchandise and 18 by proprietors of restaurants or other places where food, drink 19 and refreshments are served, one and one-half mills; except in 20 cities of the second class, where rates shall not exceed one 21 mill on wholesale dealers and two mills on retail dealers and 22 proprietors. No such tax shall be levied on the dollar volume of 23 business transacted by wholesale and retail dealers derived from 24 the resale of goods, wares and merchandise, taken by any dealer 25 as a trade-in or as part payment for other goods, wares and 26 merchandise, except to the extent that the resale price exceeds 27 the trade-in allowance. 28 (3) On wages, salaries, commissions and other earned income 29 of individuals, one percent. 30 (4) On retail sales involving the transfer of title or 20070S1063B2186 - 28 -
1 possession of tangible personal property, two percent. 2 (5) On the transfer of real property, one percent. 3 (6) On admissions to places of amusement, athletic events 4 and the like, and on motion picture theatres in cities of the 5 second class, ten percent. 6 (7) Flat rate occupation taxes not using a millage or 7 percentage as a basis, ten dollars ($10). 8 (8) Local services taxes, fifty-two dollars ($52). 9 (9) On admissions to ski facilities, ten percent. The tax 10 base upon which the tax shall be levied shall not exceed forty 11 percent of the cost of the lift ticket. The lift ticket shall 12 include all costs of admissions to the ski facility. 13 (10) On admissions to golf courses, ten percent. The tax 14 base upon which the tax shall be levied shall not exceed forty 15 percent of the greens fee. The greens fee shall include all 16 costs of admissions to the golf course. 17 (12) On payrolls, fifty-five hundredths percent. 18 Except as otherwise provided in this [act] chapter, at any 19 time two political subdivisions shall impose any one of the 20 above taxes on the same person, subject, business, transaction 21 or privilege, located within both such political subdivisions, 22 during the same year or part of the same year, under the 23 authority of this [act] chapter then the tax levied by a 24 political subdivision under the authority of this [act] chapter 25 shall, during the time such duplication of the tax exists, 26 except as hereinafter otherwise provided, be one-half of the 27 rate, as above limited, and such one-half rate shall become 28 effective by virtue of the requirements of this [act] chapter 29 from the day such duplication becomes effective without any 30 action on the part of the political subdivision imposing the tax 20070S1063B2186 - 29 -
1 under the authority of this [act] chapter. When any one of the 2 above taxes has been levied under the provisions of this [act] 3 chapter by one political subdivision and a subsequent levy is 4 made either for the first time or is revived after a lapse of 5 time by another political subdivision on the same person, 6 subject, business, transaction or privilege at a rate that would 7 make the combined levies exceed the limit allowed by this 8 subdivision, the tax of the second political subdivision shall 9 not become effective until the end of the fiscal year for which 10 the prior tax was levied, unless: 11 (1) Notice indicating its intention to make such levy is 12 given to the first taxing body by the second taxing body as 13 follows: (i) when the notice is given to a school district it 14 shall be given at least forty-five days prior to the last day 15 fixed by law for the levy of its school taxes; (ii) when given 16 to any other political subdivision it shall be prior to the 17 first day of January immediately preceding, or if a last day for 18 the adoption of the budget is fixed by law, at least forty-five 19 days prior to such last day; or 20 (2) Unless the first taxing body shall indicate by 21 appropriate resolution its desire to waive notice requirements 22 in which case the levy of the second taxing body shall become 23 effective on such date as may be agreed upon by the two taxing 24 bodies. 25 It is the intent and purpose of this provision to limit rates 26 of taxes referred to in this section so that the entire burden 27 of one tax on a person, subject, business, transaction or 28 privilege shall not exceed the limitations prescribed in this 29 section: Provided, however, That any two political subdivisions 30 which impose any one of the above taxes, on the same person, 20070S1063B2186 - 30 -
1 subject, business, transaction or privilege during the same year 2 or part of the same year may agree among themselves that, 3 instead of limiting their respective rates to one-half of the 4 maximum rate herein provided, they will impose respectively 5 different rates, the total of which shall not exceed the maximum 6 rate as above permitted. 7 Notwithstanding the provisions of this section, any city of 8 the second class A may enact a tax upon wages, salaries, 9 commissions and other earned income of individuals resident 10 therein, not exceeding one percent, even though a school 11 district levies a similar tax on the same person provided that 12 the aggregate of both taxes does not exceed two percent. 13 Section [9] 312. Register for [Earned Income] and 14 Withholding of Local Services Taxes.--It shall be the duty of 15 the Department of Community and Economic Development to have 16 available an official continuing register supplemented annually 17 of all [earned income and] local services taxes levied under 18 authority of this [act] chapter. The register and its 19 supplements, hereinafter referred to as the register, shall list 20 such jurisdictions levying [earned income and] local services 21 taxes, the rate of the tax as stated in the tax levying 22 ordinance or resolution, and the effective rate on resident and 23 nonresident taxpayers, if different from the stated rate because 24 of a coterminous levy, the name and address of the officer 25 responsible for administering the collection of the tax and from 26 whom information, forms for reporting and copies of rules and 27 regulations are available. With each jurisdiction listed, all 28 jurisdictions making coterminous levies shall also be noted and 29 their tax rates shown. 30 Information for the register shall be furnished by the 20070S1063B2186 - 31 -
1 secretary of each taxing body to the Department of Community and 2 Economic Development in such manner and on such forms as the 3 Department of Community and Economic Development may prescribe. 4 The information must be received by the Department of Community 5 and Economic Development by certified mail not later than May 31 6 of each year to show new tax enactments, repeals and changes. 7 Failure to comply with this date for filing may result in the 8 omission of the levy from the register for that year. Failure of 9 the Department of Community and Economic Development to receive 10 information of taxes continued without change may be construed 11 by the department to mean that the information contained in the 12 previous register remains in force. 13 The Department of Community and Economic Development shall 14 have the register with such annual supplements as may be 15 required by new tax enactments, repeals or changes available 16 upon request not later than July 1 of each year. The effective 17 period for each register shall be from July 1 of the year in 18 which it is issued to June 30 of the following year. 19 Employers shall not be required by any local ordinance to 20 withhold from the wages, salaries, commissions or other 21 compensation of their employes any tax imposed under the 22 provisions of this act, which is not listed in the register, or 23 make reports of wages, salaries, commissions or other 24 compensation in connection with taxes not so listed: Provided, 25 That if the register is not available by July 1, the register of 26 the previous year shall continue temporarily in effect for an 27 additional period not to exceed one year. The provisions of this 28 section shall not affect the liability of any taxpayer for taxes 29 lawfully imposed under this act. 30 Ordinances or resolutions imposing [earned income or] local 20070S1063B2186 - 32 -
1 services taxes under authority of this [act] chapter may contain 2 provisions requiring employers doing business within the 3 jurisdiction of the political subdivision imposing the tax to 4 withhold the tax from the compensation of those of their 5 employes who are subject to the tax: Provided, That [no employer 6 shall be held liable for failure to withhold earned income taxes 7 or for the payment of such withheld tax money to a political 8 subdivision other than the political subdivision entitled to 9 receive such money if such failure to withhold or such incorrect 10 transmittal of withheld taxes arises from incorrect information 11 as to the employe's place of residence submitted by the employe: 12 And provided further, That] no employer shall be held liable for 13 failure to withhold the local services tax or for the payment of 14 the withheld tax money to a political subdivision if the failure 15 to withhold taxes arises from incorrect information submitted by 16 the employe as to the employe's place or places of employment, 17 the employe's principal office or where the employe is 18 principally employed: And provided further, That an employer 19 shall not be liable for payment of the local services tax in an 20 amount exceeding the amount withheld by the employer if the 21 employer complies with the provisions of section [2(e)] 301.1(e) 22 and (f)(9) and remits the amount so withheld in accordance with 23 this section: And provided further, That the local services tax 24 shall be applicable to employment in the period beginning 25 January 1, of the current year and ending December 31 of the 26 current year, except that taxes imposed for the first time shall 27 become effective from January 1 of the year specified in the 28 ordinance or resolution, and the tax shall continue in force on 29 a calendar year basis: And provided further, That employers 30 shall be required to remit the local services taxes thirty days 20070S1063B2186 - 33 -
1 after the end of each quarter of a calendar year. 2 Section 12. The act is amended by adding a section to read: 3 Section 312.1. (Reserved). 4 Section 13. Section 10 of the act, amended November 30, 2004 5 (P.L.1520, No.192) and December 1, 2004 (P.L.1729, No.222), is 6 renumbered and amended to read: 7 Section [10] 313. Collection of Taxes.--(a) Administrative 8 Personnel; Joint Agreements.-- 9 (1) Except as provided in [subsections (b) and (c)] section 10 506, any [such] political subdivision is hereby authorized to 11 provide by ordinance or resolution for the creation or 12 designation of [such] tax bureaus or the appointment and 13 compensation of [such officers, clerks, collectors, private 14 agencies or other person and other assistants and employes, 15 either under existing departments, or otherwise as may be deemed 16 necessary,] a political subdivision, public employe, tax bureau 17 or PUBLIC OR private agency for the assessment and collection of <-- 18 taxes imposed under authority of this [act] chapter. Each 19 ordinance or resolution under this section authorizing a 20 [person] political subdivision, public employe, tax bureau or 21 PUBLIC OR private agency to act in the capacity and with the <-- 22 authority of a tax collector shall continue in force without 23 annual reauthorization unless otherwise repealed or revoked by 24 the political subdivision or unless otherwise provided by this 25 act. 26 (2) Except as provided in [subsections (b) and (c), any] 27 section 506, political subdivisions imposing taxes under 28 authority of this [act] chapter are authorized to make joint 29 agreements for the collection of such taxes or any of them. The 30 same [person or] political subdivision, tax bureau or PUBLIC OR <-- 20070S1063B2186 - 34 -
1 private agency may be employed by two or more political 2 subdivisions to collect any taxes imposed by them under 3 authority of this [act] chapter. 4 [(b) Single Collector for Earned Income Taxes When Certain 5 School Districts Impose Such Taxes.-- Except as provided in 6 subsection (c), whenever a school district of the second, third 7 or fourth class shall be established pursuant to section 296, 8 act of March 10, 1949 (P.L.30), known as the "Public School Code 9 of 1949," added August 8, 1963 (P.L. 564), and such school 10 district shall levy, assess and collect or provide for the 11 levying, assessment and collection of a tax upon earned income, 12 such school district and all cities, boroughs, towns and 13 townships within its geographical limits which levy, assess and 14 collect or provide for the levying, assessment and collection of 15 a tax upon earned income, may on January 1, 1967, or as soon 16 thereafter as the school district shall provide for the levying, 17 assessment and collection of taxes upon earned income, select 18 one person or agency to collect the taxes upon earned income 19 imposed by all such political subdivisions. In selecting such 20 person or agency, each political subdivision shall share in the 21 selection upon a basis agreed upon by each political 22 subdivision, or in the absence of any agreement on the basis of 23 voting according to the proportion that the population of each 24 bears to the entire population of the combined collection 25 district, according to the latest official Federal census, and 26 the majority of such votes cast shall determine the person or 27 agency selected to collect the taxes. The provisions of this 28 paragraph shall not prohibit school districts and other 29 political subdivisions which levy, assess and collect or provide 30 for the levying, assessment and collection of taxes upon earned 20070S1063B2186 - 35 -
1 income, under authority of this act, from selecting the same 2 person or agency to collect such tax upon earned income in an 3 area larger than the geographical limits of a school district 4 established pursuant to section 296 of the "Public School Code 5 of 1949." 6 (c) Single Tax Collector in Certain Home Rule 7 Municipality.--In a municipality having a population under the 8 2000 Federal decennial census of at least forty thousand and 9 less than ninety thousand located in a second class county and 10 which municipality has adopted a home rule charter under 53 11 Pa.C.S. Pt. III Subpt. E (relating to home rule and optional 12 plan government), the person or persons appointed by the board 13 of school directors for the school district in which the 14 municipality is located as collector or collectors of taxes 15 levied by the school district under this act shall also serve as 16 the collector or collectors of taxes levied by the municipality 17 under this act.] 18 Section 14. Section 11 of the act is repealed: 19 [Section 11. Audits of Earned Income Taxes.--Except in 20 cities of the second class, the governing body of each political 21 subdivision which levies, assesses and collects or provides for 22 the levying, assessment and collection of a tax upon earned 23 income, shall provide for not less than one examination each 24 year of the books, accounts and records of the income tax 25 collector, by a certified public accountant, a firm of certified 26 public accountants, a competent independent public accountant, 27 or a firm of independent public accountants appointed by the 28 governing body. Whenever one person or agency is selected to 29 collect earned income taxes for more than one political 30 subdivision, the books, accounts and records of such person or 20070S1063B2186 - 36 -
1 agency shall be examined as provided above in the case of a tax 2 collector for each political subdivision, except that the 3 accountant shall be selected in the manner provided for 4 selection of one person or agency to collect earned income taxes 5 for the school district established under section 296 of the 6 "Public School Code of 1949," and the cities, boroughs, towns 7 and townships within the geographical limits of such school 8 district. The reports of the audit shall be sent to the 9 governing body or bodies of the political subdivision or 10 political subdivisions employing the accountant. No further or 11 additional audit shall be performed by elected or appointed 12 auditors.] 13 Section 15. The act is amended by adding a section to read: 14 Section 314. (Reserved). 15 Section 16. Section 12 of the act is renumbered and amended 16 to read: 17 Section [12] 315. Audits of Taxes Other Than Earned Income 18 Taxes.--The books, accounts and records of [persons collecting 19 taxes] tax collectors pursuant to this [act] chapter, other than 20 taxes levied, assessed and collected upon earned income, shall 21 be audited, adjusted and settled in the manner prescribed by law 22 for the auditing, adjusting and settling of accounts of persons 23 receiving or expending funds of the political subdivision which 24 has levied, assessed and collected the taxes pursuant to this 25 [act] chapter, other than taxes levied, assessed and collected 26 upon earned income. 27 Section 17. Section 13 of the act, amended October 4, 1978 28 (P.L.930, No.177), July 9, 1987 (P.L.203, No.30), December 9, 29 2002 (P.L.1364, No.166), April 5, 2004 (P.L.208, No.24) and 30 November 30, 2004 (P.L.1520, No.192), is repealed: 20070S1063B2186 - 37 -
1 [Section 13. Earned Income Taxes.--On and after the 2 effective date of this act the remaining provisions of this 3 section shall be included in or construed to be a part of each 4 tax levied and assessed upon earned income by any political 5 subdivision levying and assessing such tax pursuant to this act. 6 The definitions contained in this section shall be exclusive for 7 any tax upon earned income and net profits levied and assessed 8 pursuant to this act, and shall not be altered or changed by any 9 political subdivision levying and assessing such tax. 10 I. Definitions 11 "Association." A partnership, limited partnership, or any 12 other unincorporated group of two or more persons. 13 "Business." An enterprise, activity, profession or any other 14 undertaking of an unincorporated nature conducted for profit or 15 ordinarily conducted for profit whether by a person, 16 partnership, association, or any other entity. 17 "Corporation." A corporation or joint stock association 18 organized under the laws of the United States, the Commonwealth 19 of Pennsylvania, or any other state, territory, foreign country 20 or dependency. 21 "Current year." The calendar year for which the tax is 22 levied. 23 "Domicile." The place where one lives and has his permanent 24 home and to which he has the intention of returning whenever he 25 is absent. Actual residence is not necessarily domicile, for 26 domicile is the fixed place of abode which, in the intention of 27 the taxpayer, is permanent rather than transitory. Domicile is 28 the voluntarily fixed place of habitation of a person, not for a 29 mere special or limited purpose, but with the present intention 30 of making a permanent home, until some event occurs to induce 20070S1063B2186 - 38 -
1 him to adopt some other permanent home. In the case of 2 businesses, or associations, the domicile is that place 3 considered as the center of business affairs and the place where 4 its functions are discharged. 5 "Earned income." Compensation as determined under section 303 6 of the act of March 4, 1971 (P.L.6, No.2), known as the "Tax 7 Reform Code of 1971," and regulations in 61 Pa. Code Pt. I 8 Subpt. B Art. V (relating to personal income tax), not 9 including, however, wages or compensation paid to individuals on 10 active military service. Employe business expenses are allowable 11 deductions as determined under Article III of the "Tax Reform 12 Code of 1971." The amount of any housing allowance provided to a 13 member of the clergy shall not be taxable as earned income. 14 "Income tax officer or officer." Person, public employe or 15 private agency designated by governing body to collect and 16 administer the tax on earned income and net profits. 17 "Employer." A person, partnership, association, corporation, 18 institution, governmental body or unit or agency, or any other 19 entity employing one or more persons for a salary, wage, 20 commission or other compensation. 21 "Net profits." The net income from the operation of a 22 business, profession, or other activity, except corporations, 23 determined under section 303 of the act of March 4, 1971 (P.L.6, 24 No.2), known as the "Tax Reform Code of 1971," and regulations 25 in 61 Pa. Code Pt. I Subpt. B Art. V (relating to personal 26 income tax). The term does not include income which is not paid 27 for services provided and which is in the nature of earnings 28 from an investment. For taxpayers engaged in the business, 29 profession or activity of farming, the term shall not include: 30 (1) any interest earnings generated from any monetary 20070S1063B2186 - 39 -
1 accounts or investment instruments of the farming business; 2 (2) any gain on the sale of farm machinery; 3 (3) any gain on the sale of livestock held twelve months or 4 more for draft, breeding or dairy purposes; and 5 (4) any gain on the sale of other capital assets of the 6 farm. 7 "Nonresident." A person, partnership, association or other 8 entity domiciled outside the taxing district. 9 "Person or individual." A natural person. 10 "Preceding year." The calendar year before the current year. 11 "Resident." A person, partnership, association or other 12 entity domiciled in the taxing district. 13 "Succeeding year." The calendar year following the current 14 year. 15 "Taxpayer." A person, partnership, association, or any other 16 entity, required hereunder to file a return of earned income or 17 net profits, or to pay a tax thereon. 18 II. Imposition of Tax 19 The tax levied under this act shall be applicable to earned 20 income received and to net profits earned in the period 21 beginning January 1, of the current year, and ending December 22 31, of the current year or for taxpayer fiscal years beginning 23 in the current year, except that taxes imposed for the first 24 time shall become effective from the date specified in the 25 ordinance or resolution, and the tax shall continue in force on 26 a calendar year or taxpayer fiscal year basis, without annual 27 reenactment, unless the rate of the tax is subsequently changed. 28 Changes in rate shall become effective on the date specified in 29 the ordinance. 30 III. Declaration and Payment of Tax 20070S1063B2186 - 40 -
1 A. Net Profits. 2 (1) Every taxpayer making net profits shall, as the 3 governing body elects, (i) pay to the officer an annual payment 4 of tax due on or before April 15, of the succeeding year for the 5 period beginning January 1, and ending December 31, of the 6 current year, or (ii) on or before April 15, of the current 7 year, make and file with the officer on a form prescribed or 8 approved by the officer, a declaration of his estimated net 9 profits during the period beginning January 1, and ending 10 December 31, of the current year, and pay to the officer in four 11 equal quarterly installments the tax due thereon as follows: the 12 first installment at the time of filing the declaration, and the 13 other installments on or before June 15, of the current year, 14 September 15, of the current year, and January 15, of the 15 succeeding year, respectively. 16 (2) Where the governing body elects to require the filing of 17 a declaration and quarterly payments, any taxpayer who first 18 anticipates any net profit after April 15, of the current year, 19 shall make and file the declaration hereinabove required on or 20 before June 15, of the current year, September 15, of the 21 current year, or December 31, of the current year, whichever of 22 these dates next follows the date on which the taxpayer first 23 anticipates such net profit, and pay to the officer in equal 24 installments the tax due thereon on or before the quarterly 25 payment dates which remain after the filing of the declaration. 26 (3) Where the governing body requires a declaration of 27 estimated net profits and quarterly payments of tax due on such 28 profits, every taxpayer shall, on or before April 15, of the 29 succeeding year, make and file with the officer on a form 30 prescribed or approved by the officer a final return showing the 20070S1063B2186 - 41 -
1 amount of net profits earned during the period beginning January 2 1, of the current year, and ending December 31, of the current 3 year, the total amount of tax due thereon and the total amount 4 of tax paid thereon. At the time of filing the final return, the 5 taxpayer shall pay to the officer the balance of tax due or 6 shall make demand for refund or credit in the case of 7 overpayment. 8 Any taxpayer may, in lieu of paying the fourth quarterly 9 installment of his estimated tax, elect to make and file with 10 the officer on or before January 31, of the succeeding year, the 11 final return as hereinabove required. 12 (4) The officer may be authorized to provide by regulation 13 for the making and filing of adjusted declarations of estimated 14 net profits, and for the payments of the estimated tax in cases 15 where a taxpayer who has filed the declaration hereinabove 16 required anticipates additional net profits not previously 17 declared or finds that he has overestimated his anticipated net 18 profits. 19 (5) Every taxpayer who discontinues business prior to 20 December 31, of the current year, shall, within thirty days 21 after the discontinuance of business, file his final return as 22 hereinabove required and pay the tax due. 23 B. Earned Income. 24 Annual Earned Income Tax Return. 25 At the election of the governing body every taxpayer shall, 26 on or before April 15, of the succeeding year, make and file 27 with the officer on a form prescribed or approved by the officer 28 a final return showing the amount of earned income received 29 during the period beginning January 1, of the current year, and 30 ending December 31, of the current year, the total amount of tax 20070S1063B2186 - 42 -
1 due thereon, the amount of tax paid thereon, the amount of tax 2 thereon that has been withheld pursuant to the provisions 3 relating to the collection at source and the balance of tax due. 4 At the time of filing the final return, the taxpayer shall pay 5 the balance of the tax due or shall make demand for refund or 6 credit in the case of overpayment. 7 Earned Income Not Subject to Withholding. 8 Every taxpayer who is employed for a salary, wage, 9 commission, or other compensation and who received any earned 10 income not subject to the provisions relating to collection at 11 source, shall as the governing body elects: 12 (1) Make and file with the officer on a form prescribed or 13 approved by the officer, an annual return setting forth the 14 aggregate amount of earned income not subject to withholding 15 from him during the period beginning January 1, and ending 16 December 31, of the current year, and such other information as 17 the officer may require, and pay to the officer the amount of 18 tax shown as due thereon on or before April 15, of the 19 succeeding year, or 20 (2) Make and file with the officer on a form prescribed or 21 approved by the officer, a quarterly return on or before April 22 30, of the current year, July 31, of the current year, October 23 31, of the current year, and January 31, of the succeeding year, 24 setting forth the aggregate amount of earned income not subject 25 to withholding by him during the three-month periods ending 26 March 31, of the current year, June 30, of the current year, 27 September 30, of the current year, and December 31, of the 28 current year, respectively, and subject to the tax, together 29 with such other information as the officer may require. Every 30 taxpayer making such return shall, at the time of filing 20070S1063B2186 - 43 -
1 thereof, pay to the officer the amount of tax shown as due 2 thereon. 3 IV. Collection at Source 4 (a) Every employer having an office, factory, workshop, 5 branch, warehouse, or other place of business within the taxing 6 jurisdiction imposing a tax on earned income or net profits 7 within the taxing district who employs one or more persons, 8 other than domestic servants, for a salary, wage, commission or 9 other compensation, who has not previously registered, shall, 10 within fifteen days after becoming an employer, register with 11 the officer his name and address and such other information as 12 the officer may require. 13 (b) Every employer having an office, factory, workshop, 14 branch, warehouse, or other place of business within the taxing 15 jurisdiction imposing a tax on earned income or net profits 16 within the taxing district who employs one or more persons, 17 other than domestic servants, for a salary, wage, commission, or 18 other compensation, shall deduct at the time of payment thereof, 19 the tax imposed by ordinance or resolution on the earned income 20 due to his employe or employes, and shall, on or before April 21 30, of the current year, July 31, of the current year, October 22 31, of the current year, and January 31, of the succeeding year, 23 file a return and pay to the officer the amount of taxes 24 deducted during the preceding three-month periods ending March 25 31, of the current year, June 30, of the current year, September 26 30, of the current year, and December 31, of the current year, 27 respectively. Such return unless otherwise agreed upon between 28 the officer and employer shall show the name and social security 29 number of each such employe, the earned income of such employe 30 during such preceding three-month period, the tax deducted 20070S1063B2186 - 44 -
1 therefrom, the political subdivisions imposing the tax upon such 2 employe, the total earned income of all such employes during 3 such preceding three-month period, and the total tax deducted 4 therefrom and paid with the return. 5 Any employer who for two of the preceding four quarterly 6 periods has failed to deduct the proper tax, or any part 7 thereof, or has failed to pay over the proper amount of tax to 8 the taxing authority, may be required by the officer to file his 9 return and pay the tax monthly. In such cases, payments of tax 10 shall be made to the officer on or before the last day of the 11 month succeeding the month for which the tax was withheld. 12 (c) On or before February 28, of the succeeding year, every 13 employer shall file with the officer: 14 (1) An annual return showing the total amount of earned 15 income paid, the total amount of tax deducted, and the total 16 amount of tax paid to the officer for the period beginning 17 January 1, of the current year, and ending December 31, of the 18 current year. 19 (2) A return withholding statement for each employe employed 20 during all or any part of the period beginning January 1, of the 21 current year, and ending December 31, of the current year, 22 setting forth the employe's name, address and social security 23 number, the amount of earned income paid to the employe during 24 said period, the amount of tax deducted, the political 25 subdivisions imposing the tax upon such employe, the amount of 26 tax paid to the officer. Every employer shall furnish two copies 27 of the individual return to the employe for whom it is filed. 28 (d) Every employer who discontinues business prior to 29 December 31, of the current year, shall, within thirty days 30 after the discontinuance of business, file the returns and 20070S1063B2186 - 45 -
1 withholding statements hereinabove required and pay the tax due. 2 (e) Except as otherwise provided in section 9, every 3 employer who wilfully or negligently fails or omits to make the 4 deductions required by this section shall be liable for payment 5 of the taxes which he was required to withhold to the extent 6 that such taxes have not been recovered from the employe. 7 (f) The failure or omission of any employer to make the 8 deductions required by this section shall not relieve any 9 employe from the payment of the tax or from complying with the 10 requirements of the ordinance or resolution relating to the 11 filing of declarations and returns. 12 V. Powers and Duties of Officer 13 (a) It shall be the duty of the officer to collect and 14 receive the taxes, fines and penalties imposed by the ordinance 15 or resolution. It shall also be his duty to keep a record 16 showing the amount received by him from each person or business 17 paying the tax and the date of such receipt. 18 (b) Each officer, before entering upon his official duties 19 shall give and acknowledge a bond to the political subdivision 20 or political subdivisions appointing him. If such political 21 subdivision or political subdivisions shall by resolution 22 designate any bond previously given by the officer as adequate, 23 such bond shall be sufficient to satisfy the requirements of the 24 subsection. 25 Each such bond shall be joint and several, with one or more 26 corporate sureties which shall be surety companies authorized to 27 do business in this Commonwealth and duly licensed by the 28 Insurance Commissioner of this Commonwealth. 29 Each bond shall be conditioned upon the faithful discharge by 30 the officer, his clerks, assistants and appointees of all trusts 20070S1063B2186 - 46 -
1 confided in him by virtue of his office, upon the faithful 2 execution of all duties required of him by virtue of his office, 3 upon the just and faithful accounting or payment over, according 4 to law, of all moneys and all balances thereof paid to, received 5 or held by him by virtue of his office and upon the delivery to 6 his successor or successors in office of all books, papers, 7 documents or other official things held in right of his office. 8 Each such bond shall be taken in the name of the appointing 9 authority or authorities, and shall be for the use of the 10 political subdivision or political subdivisions appointing the 11 officer, and for the use of such other person or persons for 12 whom money shall be collected or received, or as his or her 13 interest shall otherwise appear, in case of a breach of any of 14 the conditions thereof by the acts or neglect of the principal 15 on the bond. 16 The political subdivision or political subdivisions 17 appointing the officer, or any person may sue upon the said bond 18 in its or his own name for its or his own use. 19 Each such bond shall contain the name or names of the surety 20 company or companies bound thereon. The political subdivision or 21 political subdivisions appointing the officer shall fix the 22 amount of the bond at an amount equal to the maximum amount of 23 taxes which may be in the possession of the officer at any given 24 time. 25 The political subdivision or political subdivisions 26 appointing the officer may, at any time, upon cause shown and 27 due notice to the officer, and his surety or sureties, require 28 or allow the substitution or the addition of a surety company 29 acceptable to such political subdivision or political 30 subdivisions for the purpose of making the bond sufficient in 20070S1063B2186 - 47 -
1 amount, without releasing the surety or sureties first approved 2 from any accrued liability or previous action on such bond. 3 The political subdivision or political subdivisions 4 appointing the officer shall designate the custodian of the bond 5 required to be given by the officer. 6 (c) The officer charged with the administration and 7 enforcement of the provisions of the ordinance or resolution is 8 hereby empowered to prescribe, adopt, promulgate and enforce, 9 rules and regulations relating to any matter pertaining to the 10 administration and enforcement of the ordinance or resolution, 11 including provisions for the re-examination and correction of 12 declarations and returns, and of payments alleged or found to be 13 incorrect, or as to which an overpayment is claimed or found to 14 have occurred, and to make refunds in case of overpayment, for 15 any period of time not to exceed six years subsequent to the 16 date of payment of the sum involved, and to prescribe forms 17 necessary for the administration of the ordinance or resolution. 18 No rule or regulation of any kind shall be enforceable unless it 19 has been approved by resolution by the governing body. A copy of 20 such rules and regulations currently in force shall be available 21 for public inspection. 22 (d) The officer shall refund, on petition of, and proof by 23 the taxpayer, earned income tax paid on the taxpayer's ordinary 24 and necessary business expenses, to the extent that such 25 expenses are not paid by the taxpayer's employer. 26 (e) The officer and agents designated by him are hereby 27 authorized to examine the books, papers, and records of any 28 employer or of any taxpayer or of any person whom the officer 29 reasonably believes to be an employer or taxpayer, in order to 30 verify the accuracy of any declaration or return, or if no 20070S1063B2186 - 48 -
1 declaration or return was filed, to ascertain the tax due. Every 2 employer and every taxpayer and every person whom the officer 3 reasonably believes to be an employer or taxpayer, is hereby 4 directed and required to give to the officer, or to any agent 5 designated by him, the means, facilities and opportunity for 6 such examination and investigations, as are hereby authorized. 7 (f) Any information gained by the officer, his agents, or by 8 any other official or agent of the taxing district, as a result 9 of any declarations, returns, investigations, hearings or 10 verifications required or authorized by the ordinance or 11 resolution, shall be confidential, except for official purposes 12 and except in accordance with a proper judicial order, or as 13 otherwise provided by law. 14 (g) The officer is authorized to establish different filing, 15 reporting and payment dates for taxpayers whose fiscal years do 16 not coincide with the calendar year. 17 (h) The officer shall distribute earned income taxes to the 18 appropriate political subdivisions within sixty days of the 19 deadline for payment by an employer as set forth in Division 20 IV(b). The political subdivisions shall not be required to 21 request the officer to distribute the funds collected but shall 22 at least annually reconcile their receipts with the records of 23 the officer and return to or credit the officer with any 24 overpayment. A political subdivision shall not be required to 25 pay a fee or commission to the other political subdivision or 26 its tax officer for tax revenue distributed under this 27 subsection. If the officer, within one year after receiving a 28 tax payment, cannot identify the taxing jurisdiction entitled to 29 a tax payment, he shall make payment to the municipality in 30 which the tax was collected. If earned income taxes are not 20070S1063B2186 - 49 -
1 distributed to the appropriate political subdivision within one 2 year of receipt, the political subdivision may make a written 3 demand on a tax officer or political subdivision for tax 4 revenues collected and attributable to residents of the 5 political subdivision making the demand. If the taxes 6 attributable to residents of the political subdivision making 7 the demand are not paid within thirty days from the date of the 8 demand, the political subdivision, person, public employe or 9 private agency designated by the political subdivision may enter 10 into an arbitration agreement with the officer under 42 Pa.C.S. 11 Ch. 73 Subch. A (relating to statutory arbitration) or bring an 12 action in an appropriate court of common pleas in the name of 13 the taxing district for the recovery of taxes not distributed in 14 accordance with this subsection. The action must be brought 15 within seven years of the collection of the taxes. 16 VI. Compensation of Income Tax Officer 17 The income tax officer shall receive such compensation for 18 his services and expenses as determined by the governing body. 19 In the case of a single collector established pursuant to 20 subsection (b) of section 10 of this act, the taxing 21 jurisdictions shall share in the compensation and expenses of a 22 single officer according to the proportionate share that the 23 total annual collections for each jurisdiction bears to the 24 total annual collection for all political subdivisions in a 25 single collector district, except that with the agreement of 26 two-thirds of all participating political subdivisions, a 27 different manner of sharing may be substituted. 28 VII. Suit for Collection of Tax 29 (a) The officer may sue in the name of the taxing district 30 for the recovery of taxes due and unpaid under this ordinance. 20070S1063B2186 - 50 -
1 (b) Any suit brought to recover the tax imposed by the 2 ordinance or resolution shall be begun within three years after 3 such tax is due, or within three years after the declaration or 4 return has been filed, whichever date is later: Provided, 5 however, That this limitation shall not prevent the institution 6 of a suit for the collection of any tax due or determined to be 7 due in the following cases: 8 (1) Where no declaration or return was filed by any person 9 although a declaration or return was required to be filed by him 10 under provisions of the ordinance or resolution, there shall be 11 no limitation. 12 (2) Where an examination of the declaration or return filed 13 by any person, or of other evidence relating to such declaration 14 or return in the possession of the officer, reveals a fraudulent 15 evasion of taxes, there shall be no limitation. 16 (3) In the case of substantial understatement of tax 17 liability of twenty-five percent or more and no fraud, suit 18 shall be begun within six years. 19 (4) Where any person has deducted taxes under the provisions 20 of the ordinance or resolution, and has failed to pay the 21 amounts so deducted to the officer, or where any person has 22 wilfully failed or omitted to make the deductions required by 23 this section, there shall be no limitation. 24 (5) This section shall not be construed to limit the 25 governing body from recovering delinquent taxes by any other 26 means provided by this act. 27 (c) The officer may sue for recovery of an erroneous refund 28 provided such suit is begun two years after making such refund, 29 except that the suit may be brought within five years if it 30 appears that any part of the refund was induced by fraud or 20070S1063B2186 - 51 -
1 misrepresentation of material fact. 2 VIII. Interest and Penalties 3 (a) If for any reason the tax is not paid when due, interest 4 at the rate of six percent per annum on the amount of said tax, 5 and an additional penalty of one-half of one percent of the 6 amount of the unpaid tax for each month or fraction thereof 7 during which the tax remains unpaid, shall be added and 8 collected. Where suit is brought for the recovery of any such 9 tax, the person liable therefor shall, in addition, be liable 10 for the costs of collection and the interest and penalties 11 herein imposed. 12 (b) Notwithstanding the provisions of subsection (a), the 13 governing body may, by ordinance or resolution, establish a one- 14 time period during which interest or interest and penalties that 15 would otherwise be imposed for the nonreporting or 16 underreporting of earned income tax liabilities or for the 17 nonpayment of earned income taxes previously imposed and due 18 shall be waived in total or in part if the taxpayer voluntarily 19 files delinquent returns and pays the taxes in full during the 20 period so established. Each governing body may adopt regulations 21 to implement the provisions of this subsection. 22 (c) The provisions of subsection (b) shall not affect or 23 terminate any petitions, investigations, prosecutions or other 24 proceedings pending under the provisions of this act, or prevent 25 the commencement or further prosecution of any proceedings by 26 the proper authorities for violations of this act. No 27 proceedings shall, however, be commenced on the basis of 28 delinquent returns filed pursuant to subsection (b) if the 29 returns are determined to be substantially true and correct and 30 the taxes are paid in full within the prescribed time. 20070S1063B2186 - 52 -
1 IX. Fines and Penalties for Violation 2 of Ordinances or Resolutions 3 (a) Any person who fails, neglects, or refuses to make any 4 declaration or return required by the ordinance or resolution, 5 any employer who fails, neglects or refuses to register or to 6 pay the tax deducted from his employes, or fails, neglects or 7 refuses to deduct or withhold the tax from his employes, any 8 person who refuses to permit the officer or any agent designated 9 by him to examine his books, records, and papers, and any person 10 who knowingly makes any incomplete, false or fraudulent return, 11 or attempts to do anything whatsoever to avoid the full 12 disclosure of the amount of his net profits or earned income in 13 order to avoid the payment of the whole or any part of the tax 14 imposed by the ordinance or resolution, shall, upon conviction 15 thereof before any justice of the peace, alderman or magistrate, 16 or court of competent jurisdiction in the county or counties in 17 which the political subdivision imposing the tax is located, be 18 sentenced to pay a fine of not more than five hundred dollars 19 ($500) for each offense, and costs, and, in default of payment 20 of said fine and costs to be imprisoned for a period not 21 exceeding thirty days. 22 (b) Any person who divulges any information which is 23 confidential under the provisions of the ordinance or 24 resolution, shall, upon conviction thereof before any justice of 25 the peace, alderman or magistrate, or court of competent 26 jurisdiction, be sentenced to pay a fine of not more than five 27 hundred dollars ($500) for each offense, and costs, and, in 28 default of payment of said fines and costs to be imprisoned for 29 a period not exceeding thirty days. 30 (c) The penalties imposed under this section shall be in 20070S1063B2186 - 53 -
1 addition to any other penalty imposed by any other section of 2 the ordinance or resolution. 3 (d) The failure of any person to receive or procure forms 4 required for making the declaration or returns required by the 5 ordinance or resolution shall not excuse him from making such 6 declaration or return.] 7 Section 18. The act is amended by adding a section to read: 8 Section 316. (Reserved). 9 Section 19. Section 14 of the act, amended October 26, 1972 10 (P.L.1043, No.261), is renumbered and amended to read: 11 Section [14] 317. Payment of Tax to Other Political 12 Subdivisions or States as Credit or Deduction; Withholding 13 Tax.--Payment of any tax to any political subdivision pursuant 14 to an ordinance or resolution passed or adopted prior to the 15 effective date of this act shall be credited to and allowed as a 16 deduction from the liability of taxpayers for any like tax 17 respectively on salaries, wages, commissions, other compensation 18 or on net profits of businesses, professions or other activities 19 and for any income tax imposed by any other political 20 subdivision of this Commonwealth under the authority of this 21 [act] chapter. 22 Payment of any tax on salaries, wages, commissions, other 23 compensation or on net profits of business, professions or other 24 activities to a political subdivision by residents thereof 25 pursuant to an ordinance or resolution passed or adopted under 26 the authority of this [act] chapter shall be credited to and 27 allowed as a deduction from the liability of such persons for 28 any other like tax respectively on salaries, wages, commissions, 29 other compensation or on net profits of businesses, professions 30 or other activities imposed by any other political subdivision 20070S1063B2186 - 54 -
1 of this Commonwealth under the authority of this [act] chapter. 2 Payment of any tax on income to any political subdivision by 3 residents thereof pursuant to an ordinance or resolution passed 4 or adopted under the authority of this [act] chapter shall, to 5 the extent that such income includes salaries, wages, 6 commissions, other compensation or net profits of businesses, 7 professions or other activities, but in such proportion as 8 hereinafter set forth, be credited to and allowed as a deduction 9 from the liability of such persons for any other tax on 10 salaries, wages, commissions, other compensation or on net 11 profits of businesses, professions, or other activities imposed 12 by any other political subdivision of this Commonwealth under 13 the authority of this [act] chapter. 14 Payment of any tax on income to any state or to any political 15 subdivision thereof by residents thereof, pursuant to any State 16 or local law, may, at the discretion of the Pennsylvania 17 political subdivision imposing such tax, to the extent that such 18 income includes salaries, wages, commissions, or other 19 compensation or net profits of businesses, professions or other 20 activities but in such proportions as hereinafter set forth, be 21 credited to and allowed as a deduction from the liability of 22 such person for any other tax on salaries, wages, commissions, 23 other compensation or net profits of businesses, professions or 24 other activities imposed by any political subdivision of this 25 Commonwealth under the authority of this [act] chapter, if 26 residents of the political subdivision in Pennsylvania receive 27 credits and deductions of a similar kind to a like degree from 28 the tax on income imposed by the other state or political 29 subdivision thereof. 30 Payment of any tax on income to any State other than 20070S1063B2186 - 55 -
1 Pennsylvania or to any political subdivision located outside the 2 boundaries of this Commonwealth, by residents of a political 3 subdivision located in Pennsylvania shall, to the extent that 4 such income includes salaries, wages, commissions, or other 5 compensation or net profits of businesses, professions or other 6 activities but in such proportions as hereinafter set forth, be 7 credited to and allowed as a deduction from the liability of 8 such person for any other tax on salaries, wages, commissions, 9 other compensation or net profits of businesses, professions or 10 other activities imposed by any political subdivision of this 11 Commonwealth under the authority of this [act.] chapter. 12 Where a credit or a deduction is allowable in any of the 13 several cases hereinabove provided, it shall be allowed in 14 proportion to the concurrent periods for which taxes are imposed 15 by the other state or respective political subdivisions, but not 16 in excess of the amount previously paid for a concurrent period. 17 No credit or deduction shall be allowed against any tax on 18 earned income imposed under authority of this [act] chapter to 19 the extent of the amount of credit or deduction taken for the 20 same period by the taxpayer against any income tax imposed by 21 the Commonwealth of Pennsylvania under section 314 of the act of 22 March 4, 1971 (P.L.6) known as the "Tax Reform Code of 1971," on 23 account of taxes imposed on income by other states or by their 24 political subdivisions. 25 Section 20. Section 15 of the act, amended June 27, 1968 26 (P.L.271, No.128), is renumbered and amended to read: 27 Section [15] 318. Personal Property.--Any assessment of a 28 tax on personal property of a decedent shall include all 29 property owned, held or possessed by a decedent, which should 30 have been returned by him for taxation for any former year or 20070S1063B2186 - 56 -
1 years not exceeding five years prior to the year in which the 2 decedent died. Wherever any personal property taxable under the 3 provisions of this [act] chapter, was owned by a decedent at the 4 time of his death and is held by his executor or administrator, 5 return of such personal property shall be made and the tax paid, 6 if such decedent was domiciled at the time of his death in the 7 political subdivision imposing the tax, notwithstanding the 8 residence or location of such executor or administrator or of 9 any beneficiary, or the place which such securities are kept. 10 Section 21. Sections 16 and 17 of the act are renumbered and 11 amended to read: 12 Section [16] 319. Limitation on Assessment.--No assessment 13 may be made of any tax imposed under this [act] chapter more 14 than five years after the date on which such tax should have 15 been paid except where a fraudulent return or no return has been 16 filed. 17 Section [17] 320. Tax Limitations.--(a) Over-all Limit of 18 Tax Revenues.--The aggregate amount of all taxes imposed by any 19 political subdivision under this section and in effect during 20 any fiscal year shall not exceed an amount equal to the product 21 obtained by multiplying the latest total market valuation of 22 real estate in such political subdivision, as determined by the 23 board for the assessment and revision of taxes or any similar 24 board established by the assessment laws which determines market 25 values of real estate within the political subdivision, by 26 twelve mills. In school districts of the second class, third 27 class and fourth class and in any political subdivision within a 28 county where no market values of real estate have been 29 determined by the board for the assessment and revision of 30 taxes, or any similar board, the aggregate amount of all taxes 20070S1063B2186 - 57 -
1 imposed under this section and in effect during any fiscal year 2 shall not exceed an amount equal to the product obtained by 3 multiplying the latest total market valuation of real estate in 4 such school district, or other political subdivision, as 5 certified by the State Tax Equalization Board, by twelve mills. 6 In school districts of the third and fourth class, taxes imposed 7 on sales involving the transfer of real property shall not be 8 included in computing the aggregate amount of taxes for any 9 fiscal year in which one hundred or more new homes or other 10 major improvements on real estate were constructed in the school 11 district. 12 The aggregate amount of all taxes imposed by any independent 13 school district under this section during any fiscal year shall 14 not exceed an amount equal to the product obtained by 15 multiplying the latest total valuation of real estate in such 16 district by fifteen mills. 17 (b) Reduction of Rates Where Taxes Exceed Limitations; Use 18 of Excess Moneys.--If, during any fiscal year, it shall appear 19 that the aggregate revenues from taxes levied and collected 20 under the authority of this [act] chapter will materially exceed 21 the limitations imposed by this [act] chapter, the political 22 subdivision shall forthwith reduce the rate or rates of such tax 23 or taxes to stay within such limitations as nearly as may be. 24 Any one or more persons liable for the payment of taxes levied 25 and collected under the authority of this [act] chapter shall 26 have the right to complain to the court of common pleas of the 27 county in an action of mandamus to compel compliance with the 28 preceding provision of this subsection. Tax moneys levied and 29 collected in any fiscal year in excess of the limitations 30 imposed by this [act] chapter shall not be expended during such 20070S1063B2186 - 58 -
1 year, but shall be deposited in a separate account in the 2 treasury of the political subdivision for expenditure in the 3 following fiscal year. The rates of taxes imposed under this 4 [act] chapter for the following fiscal year shall be so fixed 5 that the revenues thereby produced, together with the excess tax 6 moneys on deposit as aforesaid, shall not exceed the limitations 7 imposed by this [act] chapter. 8 Section 22. The act is amended by adding sections to read: 9 Section 329. Legal Representation.--When bringing a suit 10 under any provision of this chapter, the taxing district or the 11 person, public employe or private agency designated by the 12 taxing district shall be represented by an attorney. 13 Section 330. Restricted Use.--(a) Any municipality deriving 14 funds from the local services tax may only use the funds for: 15 (1) Emergency services, which shall include emergency 16 medical services, police services and/or fire services. 17 (2) Road construction and/or maintenance. 18 (3) Reduction of property taxes. 19 (4) Property tax relief through implementation of a 20 homestead and farmstead exclusion in accordance with 53 Pa.C.S. 21 Ch. 85 Subch. F (relating to homestead property exclusion). 22 (a.1) A municipality shall use no less than twenty-five 23 percent of the funds derived from the local services tax for 24 emergency services. 25 (b) In the event that a municipality decides to implement a 26 homestead and farmstead exclusion for purposes of providing 27 property tax relief in accordance with subsection (a)(4), the 28 following shall apply: 29 (1) The decision to provide a homestead and farmstead 30 exclusion shall be made, by ordinance, prior to December 1, with 20070S1063B2186 - 59 -
1 the homestead and farmstead exclusion to take effect for the 2 fiscal year beginning the first day of January following 3 adoption of the ordinance. Upon adopting an ordinance in 4 accordance with this paragraph, a municipality shall, by first 5 class mail, notify the assessor, as defined in 53 Pa.C.S. § 8582 6 (relating to definitions), of its decision to provide a 7 homestead and farmstead exclusion. 8 (2) The assessor shall provide a municipality that will be 9 imposing a homestead and farmstead exclusion in accordance with 10 subsection (a)(4) with a certified report, as provided in 53 11 Pa.C.S. § 8584(i) (relating to administration and procedure), 12 listing information regarding homestead and farmstead properties 13 in the municipality as determined pursuant to applications filed 14 with the assessor in connection with this or any other law under 15 which a homestead or farmstead exclusion has been adopted. In 16 the year in which an ordinance is adopted in accordance with 17 paragraph (1), the assessor shall provide the certified report 18 after being notified by the municipality of its decision to 19 provide a homestead and farmstead exclusion. In each succeeding 20 year, the assessor shall provide the certified report by 21 December 1 or at the same time the tax duplicate is certified to 22 the municipality, whichever occurs first. Any duty placed on an 23 assessor in accordance with this paragraph shall be in addition 24 to those established in 53 Pa.C.S. Ch. 85 Subch. F and the act 25 of June 27, 2006 (1st Sp.Sess. P.L.1873, No.1), known as the 26 "Taxpayer Relief Act." 27 (3) Only homestead or farmstead properties identified in the 28 certified report of the assessor obtained in any year shall be 29 eligible to receive the exclusion for the next fiscal year. 30 (4) In the year in which a municipality adopts the ordinance 20070S1063B2186 - 60 -
1 evidencing its decision to implement a homestead and farmstead 2 exclusion, the municipality shall notify by first class mail the 3 owner of each parcel of residential property within the 4 municipality which is not approved as a homestead or farmstead 5 property or for which the approval is due to expire of the 6 following: 7 (i) That the homestead and farmstead exclusion program is to 8 be implemented to provide property tax relief as authorized by 9 subsection (a)(4), beginning in the next fiscal year. 10 (ii) That only properties currently identified in the 11 certified report of the assessor as having been approved in 12 whole or in part as homestead or farmstead properties shall be 13 entitled to an exclusion in the next fiscal year. 14 (iii) That owners of properties that have not been approved 15 by the assessor as homestead or farmstead properties may file an 16 application in accordance with 53 Pa.C.S. § 8584(a) by the 17 annual application deadline of March 1 in order to qualify for 18 the program in the year following the next fiscal year. 19 (5) The one-time notice required by paragraph (4) may be 20 combined and made together with the annual notice required by 21 paragraph (7) or with an annual notice by a coterminous 22 political subdivision that has implemented a homestead and 23 farmstead exclusion. 24 (6) In the year in which the initial decision to provide a 25 homestead and farmstead exclusion is made and in each succeeding 26 year, a municipality shall, by resolution, fix the dollar amount 27 that is to be excluded from the assessed value of each homestead 28 and farmstead property for the next fiscal year, consistent with 29 53 Pa.C.S. §§ 8583 (relating to exclusion for homestead 30 property) and 8586 (relating to limitations). This determination 20070S1063B2186 - 61 -
1 of the amount of the homestead and farmstead exclusion shall be 2 made, after receipt of the tax duplicate and the certified 3 report from the assessor, at the time the governing body of a 4 municipality determines the municipal budget and estimates 5 revenues to be derived from the local services tax for the next 6 fiscal year. 7 (7) Each year after the year in which the municipality 8 implements a homestead and farmstead exclusion and no later than 9 one hundred twenty days prior to the application deadline, the 10 municipality shall give notice of the existence of the 11 municipality's homestead and farmstead exclusion program; the 12 need to file an application in accordance with 53 Pa.C.S. § 13 8584(a) in order to qualify for the program; and the application 14 deadline, which, notwithstanding 53 Pa.C.S. § 8584(b), shall be 15 December 15. This annual notice, which shall be given by first 16 class mail, need only be sent to the owner of each parcel of 17 residential property in the municipality which is not approved 18 as homestead or farmstead property or for which the approval is 19 due to expire. 20 (c) For purposes of this section, the term "municipality" 21 does not include a school district. 22 Section 23. The act is amended by adding a chapter to read: 23 CHAPTER 5 24 CONSOLIDATED COLLECTION OF LOCAL INCOME TAXES 25 Section 501. Definitions. 26 The following words and phrases when used in this chapter 27 shall have the meanings given to them in this section unless the 28 context clearly indicates otherwise: 29 "Article XIII tax officer." The tax officer authorized by a 30 political subdivision to collect income taxes levied prior to 20070S1063B2186 - 62 -
1 January 1, 2012. 2 "Business." An enterprise, activity, profession or any other 3 undertaking of an unincorporated nature conducted for profit or 4 ordinarily conducted for profit whether by a person, 5 partnership, association or any other entity. 6 "Business entity." A sole proprietorship, corporation, 7 joint-stock association or company, partnership, limited 8 partnership, limited liability company, association, business 9 trust, syndicate or other commercial or professional activity 10 organized under the laws of this Commonwealth or any other 11 jurisdiction. 12 "Certified public accountant" or "public accountant." A 13 certified public accountant, public accountant or firm, as 14 provided for in the act of May 26, 1947 (P.L.318, No.140), known 15 as the CPA Law. 16 "Claim." A written demand for payment made by a tax officer 17 or tax collection district for income taxes collected by another 18 tax officer or tax collection district. 19 "Corporation." A corporation or joint stock association 20 organized under the laws of the United States, the Commonwealth 21 of Pennsylvania or any other state, territory, foreign country 22 or dependency. The term shall include an entity which is 23 classified as a corporation for Federal income tax purposes. 24 "Current year." The calendar year for which the tax is 25 levied. 26 "Department." The Department of Community and Economic 27 Development of the Commonwealth. 28 "Domicile." The place where a person lives and has a 29 permanent home and to which the person has the intention of 30 returning whenever absent. Actual residence is not necessarily 20070S1063B2186 - 63 -
1 domicile, for domicile is the fixed place of abode which, in the 2 intention of the taxpayer, is permanent rather than transitory. 3 Domicile is the voluntarily fixed place of habitation of a 4 person, not for a mere special or limited purpose, but with the 5 present intention of making a permanent home, until some event 6 occurs to induce the person to adopt some other permanent home. 7 In the case of a business, domicile is that place considered as 8 the center of business affairs and the place where its functions 9 are discharged. 10 "Earned income." The compensation as required to be reported 11 to or as determined by the Department of Revenue under section 12 303 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax 13 Reform Code of 1971, and rules and regulations promulgated under 14 that section. Employee business expenses as reported to or 15 determined by the Department of Revenue under Article III of the 16 Tax Reform Code of 1971 shall constitute allowable deductions in 17 determining earned income. The term does not include offsets for 18 business losses. THE AMOUNT OF ANY HOUSING ALLOWANCE PROVIDED TO <-- 19 A MEMBER OF THE CLERGY SHALL NOT BE TAXABLE AS EARNED INCOME. 20 "Earned income and net profits tax." The tax levied by a 21 political subdivision on earned income and net profits. 22 "Effective local services tax rate." The actual local 23 services tax rate levied by a political subdivision on taxpayers 24 based on the total of all local services taxes imposed under 25 this act and all other acts, adjusted under section 311. 26 "Effective income tax rate." The actual tax rate levied by a 27 political subdivision on a taxpayer based on the total of all 28 income taxes imposed under this act and all other acts, adjusted 29 under section 311. 30 "Employer." A person, business entity or other entity, 20070S1063B2186 - 64 -
1 employing one or more persons for a salary, wage, commission or 2 other compensation. The term includes the Commonwealth, a 3 political subdivision and an instrumentality or public authority 4 of either. 5 "Income tax." Except as set forth in section 511(b), an 6 earned income and net profits tax, personal income tax or other 7 tax that is assessed on the income of a taxpayer levied by a 8 political subdivision under the authority of this act or any 9 other act. 10 "Joint tax collection committee." An entity formed by two or 11 more tax collection committees for the purpose of income tax 12 collection in more than one tax collection district. 13 "Local services tax." A tax on individuals for the privilege 14 of engaging in an occupation that is levied, assessed and 15 collected only by the political subdivision of the taxpayer's 16 place of employment under the authority of this act or any other 17 act. 18 "Municipality." A city of the second class, city of the 19 second class A, city of the third class, borough, town, township 20 of the first class or township of the second class. 21 "Net profits." The net income from the operation of a 22 business, other than a corporation, as required to be reported 23 to or as determined by the Department of Revenue under section 24 303 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax 25 Reform Code of 1971, and rules and regulations promulgated under 26 that section. The term does not include income which: <-- 27 (1) is not paid for services provided; and 28 (2) is in the nature of earnings from an investment. 29 UNDER ANY OF THE FOLLOWING PARAGRAPHS: <-- 30 (1) INCOME WHICH: 20070S1063B2186 - 65 -
1 (I) IS NOT PAID FOR SERVICES PROVIDED; AND 2 (II) IS IN THE NATURE OF EARNINGS FROM AN 3 INVESTMENT. 4 (2) INCOME WHICH REPRESENTS: 5 (I) ANY GAIN ON THE SALE OF FARM MACHINERY; 6 (II) ANY GAIN ON THE SALE OF LIVESTOCK HELD 12 7 MONTHS OR MORE FOR DRAFT, BREEDING OR DAIRY PURPOSES; OR 8 (III) ANY GAIN ON THE SALE OF OTHER CAPITAL ASSETS 9 OF A FARM. 10 "Nonresident." A person or business domiciled outside the 11 political subdivision levying the tax. 12 "Nonresident tax." An income tax levied by a municipality on 13 a nonresident. 14 "Official register." The part of the tax register that 15 includes withholding tax rates as provided in section 511(a)(3). 16 "Person." A natural person. 17 "Political subdivision." A city of the second class, city of 18 the second class A, city of the third class, borough, town, 19 township of the first class, township of the second class, 20 school district of the first class A, school district of the 21 second class, school district of the third class, school 22 district of the fourth class or municipal authority. 23 "Preceding year." The calendar year before the current year. 24 "Private agency." A business entity or person appointed as a 25 tax officer by a tax collection committee. 26 "PUBLIC AGENCY." ANY AND ALL PUBLIC BODIES, AUTHORITIES, <-- 27 AGENCIES, INSTRUMENTALITIES, POLITICAL SUBDIVISIONS, 28 INTERMEDIATE UNITS, COUNCILS, BOARDS, COMMISSIONS OR SIMILAR 29 GOVERNMENTAL ENTITIES. 30 "Resident." A person or business domiciled in the political 20070S1063B2186 - 66 -
1 subdivision levying the tax. 2 "Resident tax." An income tax levied by: 3 (1) a municipality on a resident of that municipality; 4 or 5 (2) a school district on a resident of that school 6 district. 7 "Resident tax officer." The tax officer administering and 8 collecting income taxes for the tax collection district in which 9 a taxpayer is domiciled. 10 "Succeeding year." The calendar year following the current 11 year. 12 "Tax bureau." A public nonprofit entity established for the 13 administration and collection of taxes. 14 "Tax collection committee." The committee established to 15 govern each tax collection district for the purpose of income 16 tax collection. The term shall include a joint tax collection 17 committee. 18 "Tax collection district." A tax collection district 19 established under section 504. 20 "Tax officer." A political subdivision, public employee, tax 21 bureau, county, except a county of the first class, or private 22 agency which administers and collects income taxes for one or 23 more tax collection districts. Unless otherwise specifically 24 provided, for purposes of the obligations of an employer, the 25 term shall mean the tax officer for the tax collection district 26 within which the employer is located, or, if an employer 27 maintains workplaces in more than one district, the tax officer 28 for each such district with respect to employees principally 29 employed therein. 30 "Tax records." Tax returns, supporting schedules, 20070S1063B2186 - 67 -
1 correspondence with auditors or taxpayers, account books and 2 other documents, including electronic records, obtained or 3 created by the tax officer to administer or collect a tax under 4 this act. The term includes documents required by section 5 509(e). The term "electronic records" includes data and 6 information inscribed on a tangible medium or stored in an 7 electronic or other medium and which is retrievable in 8 perceivable form. 9 "Tax register." A database of all county, municipal and 10 school tax rates available on the Internet as provided in 11 section 511(a)(1). 12 "Taxable income." Includes: 13 (1) In the case of an earned income and net profits tax, 14 earned income and net profits. 15 (2) In the case of a personal income tax, income 16 enumerated in section 303 of the act of March 4, 1971 (P.L.6, 17 No.2), known as the Tax Reform Code of 1971, as reported to 18 and determined by the Department of Revenue, subject to 19 correction for fraud, evasion or error, as finally determined 20 by the Commonwealth. 21 "Taxpayer." A person or business required under this act to 22 file a return of an income tax or to pay an income tax. 23 "Withholding tax." An income tax or a local services tax 24 levied by a political subdivision under the authority of this 25 act or any other act, or any other tax levied by a municipality 26 or school district for which employer withholding may be 27 required under this act or any other act. 28 Section 502. Declaration and payment of income taxes. 29 (a) Application.-- 30 (1) Income taxes shall be applicable to taxable income 20070S1063B2186 - 68 -
1 earned or received based on the method of accounting used by 2 the taxpayer in the period beginning January 1 of the current 3 year and ending December 31 of the current year; except that 4 taxes imposed for the first time and changes to existing tax 5 rates shall become effective on January 1 or July 1, as 6 specified in the ordinance or resolution, and the tax shall 7 continue in force on a calendar year or taxpayer fiscal year 8 basis, without annual reenactment, unless the rate of the tax 9 is subsequently changed. 10 (2) For a taxpayer whose fiscal year is not a calendar 11 year, the tax officer shall establish deadlines for filing, 12 reporting and payment of taxes which provide time periods 13 equivalent to those provided for a calendar year taxpayer. 14 (b) Partial domicile.--The taxable income subject to tax of 15 a taxpayer who is domiciled in a political subdivision for only 16 a portion of the tax year shall be an amount equal to the 17 taxpayer's taxable income multiplied by a fraction, the 18 numerator of which is the number of calendar months during the 19 tax year that the individual is domiciled in the political 20 subdivision, and the denominator of which is 12. A taxpayer 21 shall include in the numerator any calendar month during which 22 the taxpayer is domiciled for more than half the calendar month. 23 A day that a taxpayer's domicile changes shall be included as a 24 day the individual is in the new domicile and not the old 25 domicile. If the number of days in the calendar month in which 26 the individual lived in the old and new domiciles are equal, the 27 calendar month shall be included in calculating the number of 28 months in the new domicile. 29 (c) Declaration and payment.--Except as provided in 30 subsection (a)(2), taxpayers shall declare and pay income taxes 20070S1063B2186 - 69 -
1 as follows: 2 (1) Every taxpayer shall, on or before April 15 of the 3 succeeding year, make and file with the resident tax officer, 4 a final return showing the amount of taxable income received 5 during the period beginning January 1 of the current year and 6 ending December 31 of the current year, the total amount of 7 tax due on the taxable income, the amount of tax paid, the 8 amount of tax that has been withheld under section 512 and 9 the balance of tax due. All amounts reported shall be rounded 10 to the nearest whole dollar. At the time of filing the final 11 return, the taxpayer shall pay the resident tax officer the 12 balance of the tax due or shall make demand for refund or 13 credit in the case of overpayment. 14 (2) (i) Every taxpayer making net profits shall, by 15 April 15 of the current year, make and file with the 16 resident tax officer a declaration of the taxpayer's 17 estimated net profits during the period beginning January 18 1 and ending December 31 of the current year, and shall 19 pay to the resident tax officer in four equal quarterly 20 installments the tax due on the estimated net profits. 21 The first installment shall be paid at the time of filing 22 the declaration, and the other installments shall be paid 23 on or before June 15 of the current year, September 15 of 24 the current year and January 15 of the succeeding year, 25 respectively. 26 (ii) Any taxpayer who first anticipates any net 27 profit after April 15 of the current year, shall make and 28 file the declaration required on or before June 15 of the 29 current year, September 15 of the current year or 30 December 31 of the current year, whichever date next 20070S1063B2186 - 70 -
1 follows the date on which the taxpayer first anticipates 2 such net profit, and shall pay to the resident tax 3 officer in equal installments the tax due on or before 4 the quarterly payment dates that remain after the filing 5 of the declaration. 6 (iii) Every taxpayer shall, on or before April 15 of 7 the succeeding year, make and file with the resident tax 8 officer a final return showing the amount of net profits 9 earned or received based on the method of accounting used 10 by the taxpayer during the period beginning January 1 of 11 the current year, and ending December 31 of the current 12 year, the total amount of tax due on the net profits and 13 the total amount of tax paid. At the time of filing the 14 final return, the taxpayer shall pay to the resident tax 15 officer the balance of tax due or shall make demand for 16 refund or credit in the case of overpayment. Any taxpayer 17 may, in lieu of paying the fourth quarterly installment 18 of the estimated tax, elect to make and file with the 19 resident tax officer on or before January 31 of the 20 succeeding year, the final return. 21 (iv) The department, in consultation with the 22 Department of Revenue, shall provide by regulation for 23 the filing of adjusted declarations of estimated net 24 profits and for the payments of the estimated tax in 25 cases where a taxpayer who has filed the declaration 26 required under this subsection anticipates additional net 27 profits not previously declared or has overestimated 28 anticipated net profits. 29 (v) Every taxpayer who discontinues business prior 30 to December 31 of the current year, shall, within 30 days 20070S1063B2186 - 71 -
1 after the discontinuance of business, file a final return 2 as required under this paragraph and pay the tax due. 3 (3) Every taxpayer who receives any other taxable income 4 not subject to withholding under section 512(3) shall make 5 and file with the resident tax officer a quarterly return on 6 or before April 15 of the current year, June 15 of the 7 current year, September 15 of the current year, and January 8 15 of the succeeding year, setting forth the aggregate amount 9 of taxable income not subject to withholding by the taxpayer 10 during the three-month periods ending March 31 of the current 11 year, June 30 of the current year, September 30 of the 12 current year, and December 31 of the current year, 13 respectively, and subject to income tax, together with such 14 other information as the department may require. Every 15 taxpayer filing a return shall, at the time of filing the 16 return, pay to the resident tax officer the amount of income 17 tax due. The department shall establish criteria under which 18 the tax officer may waive the quarterly return and payment of 19 the income tax and permit a taxpayer to file the receipt of 20 taxable income on the taxpayer's annual return and pay the 21 income tax due on or before April 15 of the succeeding year. 22 Section 503. (Reserved). 23 Section 504. Tax collection districts. 24 (a) General rule.--A tax collection district is established 25 in each county, except a county of the first class or second <-- 26 class, for purposes of collecting income taxes. The geographic 27 boundaries of a tax collection district shall be coterminous 28 with the county in which it is created, except as provided in 29 this section. A school district located in more than one county 30 shall be included in the tax collection district with the 20070S1063B2186 - 72 -
1 greatest share of the school district's population based on the 2 2000 Federal Decennial Census. A municipality shall be included 3 in the tax collection district in which its school district is 4 located. If a municipality is located in more than one school 5 district, each of which is in a different tax collection 6 district, the portion of the municipality in each school 7 district shall be included in the tax collection district for 8 that school district. The department shall establish a list of 9 all tax collection districts and the political subdivisions in 10 each tax collection district. By January 16, 2009, the list 11 shall be transmitted to the Legislative Reference Bureau for 12 publication in the Pennsylvania Bulletin; and by January 28, 13 2009, the list shall be made available on the department's 14 Internet website. 15 (b) Counties of the second class.--Each county of the second 16 class with a population of over 1,000,000 persons, and which 17 also contains a city of the second class, shall be divided into 18 four tax collection districts, each to be as consistent as 19 practicable with the general rules pertaining to municipalities 20 and school districts contained in subsection (a), and to be 21 further established as follows: 22 (1) One district shall be comprised of a city of the 23 second class and any municipality and school district 24 geographically located within the boundaries of such city. 25 (2) The remainder of the county shall be divided into 26 three tax collection districts of relatively equal population 27 which contain coterminous municipalities and school districts 28 that are bordered by the county boundaries and by 29 commercially navigable rivers which are at least 100 miles in 30 length. 20070S1063B2186 - 73 -
1 (3) The department shall develop a map and a list of all 2 tax collection districts in each county of the second class 3 and the political subdivisions in each tax collection 4 district. By January 16, 2009, the list shall be transmitted 5 to the Legislative Reference Bureau for publication in the 6 Pennsylvania Bulletin and by January 28, 2009, the list shall 7 be made available on the department's Internet website. 8 (C) EXISTING CONSOLIDATED COLLECTION ARRANGEMENTS.-- <-- 9 NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A), IN ANY COUNTY 10 IN WHICH, ON THE EFFECTIVE DATE OF THIS SECTION, ALL POLITICAL 11 SUBDIVISIONS LEVYING AN INCOME TAX, INCLUDING A COUNTY SCHOOL 12 DISTRICT LOCATED PARTIALLY OUTSIDE OF BUT CONTIGUOUS TO THE 13 COUNTY, ARE SERVED BY ONE EXISTING TAX BUREAU, THE COUNTY TAX 14 COLLECTION DISTRICT SHALL ALSO INCLUDE SUCH A SCHOOL DISTRICT 15 AND ALL OF ITS COMPONENT MUNICIPALITIES IN THE EVENT A TAX 16 COLLECTION COMMITTEE IS ESTABLISHED FOR THAT COUNTY PURSUANT TO 17 SECTION 505(M). 18 Section 505. Tax collection committees. 19 (a) General rule.--Each SUBJECT TO THE PROVISIONS OF <-- 20 SUBSECTION (M), EACH tax collection district shall be governed 21 by a tax collection committee constituted and operated as set 22 forth in this section. Meetings of the tax collection committee 23 shall be conducted under 65 Pa.C.S. Ch. 7 (relating to open 24 meetings) and the act of June 21, 1957 (P.L.390, No.212), 25 referred to as the Right-to-Know Law. 26 (a.1) Duties.--A tax collection committee has the following 27 duties: 28 (1) To keep records of all votes and other actions taken 29 by the tax collection committee. 30 (2) To appoint and oversee a tax officer for the tax 20070S1063B2186 - 74 -
1 collection district as provided in section 507(a). 2 (3) To set the compensation of the tax officer under 3 section 507(c). 4 (4) To require, hold, set and review the tax officer's 5 bond required by section 509(d). 6 (5) To establish the manner and extent of financing of 7 the tax collection committee. 8 (6) To adopt, amend and repeal bylaws for the management 9 of its affairs consistent with subsection (f) and regulations 10 under section 508. 11 (7) To adopt, amend and repeal policies and procedures 12 consistent with the regulations under section 508 for the 13 administration of income taxes within the tax collection 14 district. The procedures shall supersede any contrary 15 resolutions or ordinances adopted by a political subdivision. 16 This authority shall not be construed to permit a tax 17 collection committee to change the rate or subject of any 18 tax. 19 (a.2) Powers.--A tax collection committee has the following 20 powers: 21 (1) To adopt, amend and repeal resolutions to carry out 22 its powers and duties under this section. 23 (2) To create a tax bureau and to provide for its 24 operation and administration. The department shall, upon 25 request of a tax collection committee, provide technical 26 assistance to the tax collection committee in the creation of 27 a tax bureau. 28 (3) To enter into contracts as necessary. 29 (4) To appoint a director for the tax collection 30 committee and other employees as necessary and to fix their 20070S1063B2186 - 75 -
1 compensation. 2 (5) To retain counsel, auditors and other consultants or 3 advisors to render professional services as necessary. 4 (6) To acquire, lease, rent or dispose of real or 5 personal property. 6 (7) To enter into agreements with one or more other tax 7 collection committees to form a joint tax collection 8 committee. Such agreements may assign to a joint tax 9 collection committee some or all of the powers and duties 10 enumerated in subsection (a.1) and this subsection with 11 respect to all tax collection districts from which the joint 12 tax collection committee is formed. 13 (8) To sue and be sued, and complain and defend in all 14 courts. 15 (9) To borrow money, accept grants, incur indebtedness 16 and issue notes, debentures and other obligations to evidence 17 borrowing for the purposes for which it is organized in an 18 amount not to exceed 50% of the total revenues anticipated in 19 the following fiscal year. 20 (b) Delegates.-- 21 (1) The governing body of each political subdivision 22 within a tax collection district that imposed an income tax 23 prior to July 1, 2009, shall appoint one voting delegate and 24 one or more alternates to represent the political subdivision 25 on the tax collection committee by September 15, 2009. The 26 governing body of each political subdivision that after June 27 30, 2009, imposes an income tax for the first time shall 28 appoint one voting delegate and one or more alternates to 29 represent the political subdivision on the tax collection 30 committee. A voting delegate or alternate shall serve at the 20070S1063B2186 - 76 -
1 pleasure of the governing body of the political subdivision. 2 (2) The governing body of each political subdivision 3 within a tax collection district that prior to July 1, 2009, 4 does not impose an income tax may appoint one nonvoting 5 delegate and one or more alternates to represent the 6 political subdivision on the tax collection committee. If, 7 after June 30, 2009, the political subdivision imposes an 8 income tax, the nonvoting delegate shall become a voting 9 delegate to represent the political subdivision on the tax 10 collection committee. 11 (b.1) Quorum.--Unless otherwise provided for in the bylaws 12 of a tax collection committee, a majority of the delegates of a 13 tax collection committee appointed under subsection (b)(1) 14 constitutes a quorum. A quorum must be present in order to take 15 official action. 16 (b.2) Lack of quorum AT FIRST MEETING.--If a quorum is not <-- 17 present at the first meeting, the chair of the governing body of 18 the county in which the tax collection district is located or 19 the chair's designee shall reschedule the meeting within three 20 weeks. The chair or the chair's designee shall provide, by first 21 class mail, notice of the rescheduled meeting to the department 22 and to the governing bodies of all political subdivisions in the 23 tax collection district on a form prescribed by the department. 24 The form shall include the date, time and location of the 25 rescheduled meeting and a notice that the delegates present at 26 the rescheduled meeting shall constitute a quorum. The 27 rescheduled meeting shall be deemed to be the first meeting for 28 purposes of this chapter. 29 (c) Voting rights.-- 30 (1) Only a delegate appointed by the governing body of a 20070S1063B2186 - 77 -
1 political subdivision may represent a political subdivision 2 at a tax collection committee meeting. If a delegate cannot 3 be present for a tax collection committee meeting, the 4 alternate appointed under this section may represent the 5 political subdivision. Each delegate or alternate shall be 6 entitled to vote upon any action authorized or required of 7 the tax collection committee under this chapter. 8 (2) For the first meeting of the tax collection 9 committee, actions of the tax collection committee shall be 10 determined by a majority vote of those delegates present. 11 Votes shall be weighted among the governing bodies of the 12 member political subdivisions according to the following 13 formula: 50% shall be allocated according to the proportional 14 population of each political subdivision in proportion to the 15 population of each tax collection district as determined by 16 the most recent Federal decennial census data and 50% shall 17 be weighted in direct proportion to income tax revenues 18 collected in each political subdivision, based on each 19 political subdivision's most recent annual financial report 20 submitted to the department or the Department of Education. 21 For subsequent meetings, votes shall be taken in accordance 22 with this paragraph unless the bylaws provide otherwise. 23 (3) No later than September 1, 2009, the department 24 shall calculate the weighted vote for each political 25 subdivision within each tax collection district based on the 26 formula specified in paragraph (2). By July 1 of the year 27 following the first meeting, and of each year thereafter, 28 each tax collection committee shall recalculate the weighted 29 vote unless the bylaws provide for a more frequent 30 recalculation. 20070S1063B2186 - 78 -
1 (4) If a political subdivision within the tax collection 2 district imposes an income tax for the first time, the tax 3 collection committee shall recalculate the weighted vote or 4 other method of voting under the bylaws. 5 (d) First meeting schedule.--The first meeting of the tax 6 collection committee in each tax collection district shall be on 7 or before November 15, 2009. The chair of the county 8 commissioners or the chief executive of the county in which the 9 tax collection district is primarily located or the chair's 10 designee shall schedule the first meeting of the tax collection 11 committee and shall provide, at least 21 days before the 12 meeting, public notice, as required by 65 Pa.C.S. § 703 13 (relating to definitions), and notice by first class mail by 14 September 15, 2009, to the department and to the governing body 15 of each political subdivision located in the tax collection 16 district. 17 (e) First meeting agenda.--The chair of the county 18 commissioners or the chair's designee or the chief executive of 19 the county or his designee shall convene the first meeting of 20 the tax collection committee, conduct the meeting and record all 21 votes until a chairperson, vice chairperson and secretary are 22 elected by the tax collection committee. The voting delegates of 23 the tax collection committee shall elect a chairperson and a 24 vice chairperson, each of whom must be duly appointed voting 25 delegates, and a secretary who need not be a duly appointed 26 voting delegate. The chairperson shall schedule meetings, set 27 the agenda, conduct meetings, record votes and perform other 28 duties as determined by the tax collection committee. The 29 secretary shall maintain the minutes and records of the tax 30 collection committee and provide public notices and all notices 20070S1063B2186 - 79 -
1 to each delegate and alternate appointed to the tax collection 2 committee. 3 (f) Bylaws.--No later than April 15, 2010, the delegates of 4 each tax collection committee shall adopt bylaws to govern the 5 tax collection committee and notify the department within 30 6 days of adoption. The department shall provide sample bylaws to 7 the tax collection committee. Written notice shall be provided 8 to each delegate and alternate delegate that the adoption or 9 amendment of bylaws will be considered at a meeting. Notice 10 shall include copies of the proposed bylaws or amendments. The 11 bylaws for each tax collection committee shall provide for the 12 following: 13 (1) Rules of procedure, quorum requirements, voting 14 rights and provisions for managing the affairs of the tax 15 collection committee. 16 (2) A list of officers, their terms and powers and a 17 process for their election. 18 (3) Meetings, including special meetings. 19 (4) The process for adopting and amending bylaws. 20 (5) The procedure for the addition of new political 21 subdivisions to the tax collection committee. 22 (g) Officers.--Upon the election of any new officers, the 23 tax collection committee shall notify the department within 30 24 days and shall provide the department with the name and address 25 of each officer. 26 (h) Audits of taxes received and disbursed.-- 27 (1) By the end of each calendar year, the tax collection 28 committee shall provide for at least one examination for each 29 calendar year of the books, accounts, financial statements, 30 compliance reports and records of the tax officer by a 20070S1063B2186 - 80 -
1 certified public accountant or public accountant approved by 2 the tax collection committee. The examination shall include 3 an audit of all records relating to the cash basis receipt 4 and disbursement of all public money by the tax officer, a 5 reconciliation of the monthly reports required by section 6 509(b), an analysis of the bond amount under section 509(d) 7 and an analysis of the collection fees charged to the tax 8 collection committee. In the case of a private agency, the 9 examination shall not include payroll and other proprietary 10 information. The examination shall be conducted according to 11 generally accepted governmental auditing standards. 12 (2) The certified public accountant or public accountant 13 shall issue a report, in a format prescribed by the 14 department, to the tax collection committee, which shall 15 include an auditor's opinion letter, a financial statement, a 16 reconciliation of the monthly reports required by section 17 509(b) with the receipts and disbursements, a summary of 18 collection fees charged to the tax collection committee, a 19 report on the tax officer's compliance with this act, a list 20 of any findings of noncompliance with this act and a copy of 21 a management letter if one is issued by the auditor. If there 22 are findings of noncompliance, a copy of the report shall be 23 filed with the Department of the Auditor General and the 24 department. A copy of the report shall be filed with all 25 political subdivisions within the tax collection district and 26 the department on or before September 1 of the succeeding 27 year. The department may make available on its Internet 28 website summary data from the reports filed under this 29 subsection. 30 (i) Applicability of statutes.--Each tax collection 20070S1063B2186 - 81 -
1 committee shall be subject to the provisions of the following: 2 (1) The Right-to-Know Law. 3 (2) The act of July 19, 1957 (P.L.1017, No.451), known 4 as the State Adverse Interest Act. 5 (3) 65 Pa.C.S. Ch. 7 (relating to open meetings). 6 (4) 65 Pa.C.S. Ch. 11 (relating to ethics standards and 7 financial disclosure). 8 (j) Appeals board.-- 9 (1) By June 1, 2010, each tax collection committee shall 10 establish an appeals board comprised of a minimum of three 11 delegates OR, IN THE CASE OF A TAX COLLECTION COMMITTEE <-- 12 ESTABLISHED PURSUANT TO SUBSECTION (M), A MINIMUM OF THREE 13 RESIDENTS OF THE COUNTY. 14 (2) A determination of the tax officer relating to the 15 assessment, collection, refund, withholding, remittance or 16 distribution of income taxes may be appealed to the appeals 17 board by a taxpayer, employer, political subdivision or 18 another tax collection district. 19 (3) All appeals, other than those brought under 20 subsection (k), shall be conducted in a manner consistent 21 with 53 Pa.C.S. §§ 8431 (relating to petitions), 8432 22 (relating to practice and procedure), 8433 (relating to 23 decisions), 8434 (relating to appeals) and 8435 (relating to 24 equitable and legal principles to apply). 25 (4) A tax collection committee may enter into agreement 26 with another tax collection committee to establish a joint 27 appeals board. 28 (5) No member of an appeals board or joint appeals board 29 may be a tax officer or an employee, agent or attorney for a 30 tax officer. 20070S1063B2186 - 82 -
1 (6) An appeals board appointed pursuant to this section 2 shall constitute a joint local tax appeals board as provided 3 for in 53 Pa.C.S. § 8430 (relating to administrative appeals) 4 for purposes of taxes collected under the supervision of the 5 appointing tax collection committee. 6 (k) Mediation and appeals of tax collector actions.-- 7 (1) Any dispute among the affected parties involving a 8 10% or greater deviation from taxes received in the previous 9 tax year shall be subject to mandatory mediation under this 10 section, in accordance with regulations and guidelines to be 11 adopted by the department. A dispute involving less than the 12 10% threshold may be the subject of voluntary mediation in 13 accordance with regulations and guidelines to be adopted by 14 the department. 15 (2) One or more affected political subdivisions shall 16 give written notice to the tax collection committee and the 17 department of its desire to submit the disputed matter to 18 mediation by the department. Thereafter, the affected 19 political subdivisions, tax collection committee and tax 20 officer shall submit to mediation to which the following 21 provisions shall apply: 22 (i) Within 20 days of submission of the written 23 notice, the affected political subdivisions, tax 24 collection committee and tax officer shall each submit to 25 the mediator and each other party to the mediation a 26 statement of no more than five pages, stating the 27 position of such party as to the disputed and undisputed 28 facts and issues in the case and whether prior settlement 29 negotiations have occurred. 30 (ii) Within 30 days of submission of the written 20070S1063B2186 - 83 -
1 notice, the department shall determine whether the 2 dispute meets the threshold conditions for mandatory 3 mediation under paragraph (1), which decision shall be 4 final and not appealable. Notice of such determination 5 shall be given in writing to all affected parties. 6 (iii) If the mediator determines that the dispute 7 meets the threshold conditions of paragraph (1), a 8 mediation shall be commenced in accordance with 9 procedures established under guidelines adopted by the 10 department. The mediation efforts shall be completed no 11 later than 30 days following the notice that the dispute 12 has met the threshold requirement of paragraph (1), 13 unless the time period is extended by mutual agreement of 14 the parties to the mediation. The parties shall have any 15 official authorized to settle the matter on their behalf 16 available at the mediation. At the discretion of the 17 mediator, the mediation may be held via telephonic 18 communication or in person. 19 (iv) The mediation sessions shall be closed to the 20 public and shall not be subject to the requirements of 65 21 Pa.C.S. Ch. 7 (relating to open meetings). 22 (v) No offers or statements made in a mediation 23 session, excluding the final written settlement 24 agreement, if any, shall be admissible as evidence in any 25 subsequent judicial or administrative proceedings in 26 accordance with the provisions of 42 Pa.C.S. § 5949 27 (relating to confidential mediation communications and 28 documents). 29 (vi) If a settlement is reached during the 30 mediation, the department shall prepare a written 20070S1063B2186 - 84 -
1 settlement agreement and obtain all necessary signatures 2 of the parties within 30 days of the agreement of the 3 parties to settle the issue. The settlement agreement 4 shall be binding upon the parties to the agreement. Such 5 settlement agreement shall be subject to the provisions 6 of the Right-to-Know Law. Such agreements shall be 7 admissible as evidence in any subsequent judicial or 8 administrative proceedings in accordance with the 9 provisions of the Pennsylvania Rules of Court, the 10 Pennsylvania Rules of Evidence and 42 Pa.C.S. § 5949. 11 (vii) If the mediation has not resulted in a written 12 agreement signed by the parties as provided in 13 subparagraph (vi), the mediation shall be deemed to have 14 been unsuccessful unless all parties and the department 15 agree in writing to extend the mediation. The mediator 16 shall have the right to determine that the mediation has 17 been unsuccessful and to terminate the mediation if the 18 parties have not executed a settlement agreement by the 19 ending date of the extension, or any further extension 20 agreeable to the affected parties and the mediator. 21 (viii) Costs incurred by the department for a 22 mandatory mediation under this section shall be equitably 23 assessed by the department against the parties to the 24 mediation. The assessment of costs shall be final and not 25 appealable. 26 (3) The department shall adopt guidelines to further 27 provide for the mandatory and voluntary mediation processes 28 in this subsection. 29 (l) Annual budget required.-- 30 (1) Each tax collection committee shall adopt an annual 20070S1063B2186 - 85 -
1 budget providing for compensation of the tax officer and 2 other expenses of operating the tax collection district. 3 (2) The expenses of operating the tax collection 4 district shall be shared among and paid by all political 5 subdivisions within the tax collection district that are 6 represented by voting delegates on the tax collection 7 committee and shall be weighted in direct proportion to 8 income tax revenues collected in each participating political 9 subdivision based on the political subdivision's most recent 10 annual audit report required under this section. 11 (M) COMMITTEE ESTABLISHMENT IN COUNTIES WITH EXISTING <-- 12 CONSOLIDATED COLLECTION ARRANGEMENTS.--IN ANY COUNTY IN WHICH, 13 ON THE EFFECTIVE DATE OF THIS SECTION, ALL POLITICAL 14 SUBDIVISIONS LEVYING AN INCOME TAX, INCLUDING A COUNTY SCHOOL 15 DISTRICT LOCATED PARTIALLY OUTSIDE OF BUT CONTIGUOUS TO THE 16 COUNTY, ARE SERVED BY ONE EXISTING TAX BUREAU AND THAT TAX 17 BUREAU IS GOVERNED BY A SINGLE GOVERNING ENTITY CREATED SOLELY 18 BY THE ACTION OF THE SCHOOL DISTRICTS LOCATED WHOLLY WITHIN AND 19 ONE OR MORE PARTIALLY OUTSIDE OF BUT CONTIGUOUS TO THAT COUNTY, 20 SUCH EXISTING GOVERNING ENTITY SHALL CONSTITUTE THE TAX 21 COLLECTION COMMITTEE FOR THAT COUNTY AND SCHOOL DISTRICT 22 PROVIDED A MAJORITY OF THE GOVERNING BODIES OF THE POLITICAL 23 SUBDIVISIONS SERVED BY SUCH TAX BUREAU ADOPT UNIFORM RESOLUTIONS 24 ON OR BEFORE JULY 1, 2009, DESIGNATING SAID GOVERNING ENTITY AS 25 THE COUNTY TAX COLLECTION COMMITTEE FOR PURPOSES OF THIS ACT. IN 26 THE EVENT SUCH A MAJORITY IS NOT ACHIEVED, THE ESTABLISHMENT OF 27 A TAX COLLECTION COMMITTEE FOR THAT COUNTY AND SUCH SCHOOL 28 DISTRICT SHALL PROCEED AS OTHERWISE PROVIDED FOR IN THIS 29 SECTION. THE FOLLOWING APPLY: 30 (1) A TAX COLLECTION COMMITTEE ESTABLISHED PURSUANT TO 20070S1063B2186 - 86 -
1 THIS SUBSECTION SHALL NOT BE SUBJECT TO ANY OF THE FOLLOWING: 2 (I) SUBSECTION (B). 3 (II) SUBSECTION (B.1). 4 (III) SUBSECTION (B.2). 5 (IV) SUBSECTION (C). 6 (V) SUBSECTION (D). 7 (VI) SUBSECTION (E). 8 (VII) SUBSECTION (F), EXCEPT THAT THE SUBSTANCE OF 9 BYLAWS UTILIZED BY SUCH A TAX COLLECTION COMMITTEE SHALL 10 ADDRESS THE SUBJECTS ENUMERATED THEREIN. 11 (VIII) SUBSECTION (L)(2). 12 (2) ALL OF THE FOLLOWING REQUIREMENTS SHALL BE DEEMED TO 13 HAVE BEEN MET WITHOUT THE NECESSITY OF FURTHER ACTION BY A 14 TAX COLLECTION COMMITTEE ESTABLISHED PURSUANT TO THIS 15 SUBSECTION: 16 (I) THE INITIAL ADOPTION OF BYLAWS OTHERWISE 17 REQUIRED OF A TAX COLLECTION COMMITTEE UNDER SUBSECTION 18 (A.1)(6). 19 (II) THE INITIAL ADOPTION OF POLICIES AND PROCEDURES 20 OTHERWISE REQUIRED OF A TAX COLLECTION COMMITTEE UNDER 21 SUBSECTION (A.1)(7). 22 (3) IN ADDITION TO THE WITHDRAWAL OPTIONS FOR POLITICAL 23 SUBDIVISIONS UNDER SECTION 510(H), EACH POLITICAL SUBDIVISION 24 GOVERNED BY A TAX COLLECTION COMMITTEE ESTABLISHED PURSUANT 25 TO THIS SUBSECTION MAY, WITHIN THE 90-DAY PERIOD ENDING 26 NOVEMBER 15, 2013, AND NOVEMBER 15 EVERY FOURTH YEAR 27 THEREAFTER, ADOPT AND FILE WITH THE DEPARTMENT AND THE TAX 28 COLLECTION COMMITTEE A RESOLUTION EVIDENCING ITS DESIRE TO 29 WITHDRAW FROM GOVERNANCE BY SUCH TAX COLLECTION COMMITTEE AS 30 OF JANUARY 1 OF THE SECOND SUCCEEDING CALENDAR YEAR. THE 20070S1063B2186 - 87 -
1 FOLLOWING APPLY: 2 (I) IF A MAJORITY OF THE GOVERNING BODIES OF SUCH 3 POLITICAL SUBDIVISIONS ADOPT RESOLUTIONS EVIDENCING A 4 DESIRE TO WITHDRAW, A NEW TAX COLLECTION COMMITTEE SHALL 5 BE ESTABLISHED IN ACCORDANCE WITH SUBPARAGRAPH (III). 6 (II) IF A MAJORITY OF THE GOVERNING BODIES OF SUCH 7 POLITICAL SUBDIVISIONS FAIL TO ADOPT RESOLUTIONS 8 EVIDENCING A DESIRE TO WITHDRAW FROM GOVERNANCE BY THE 9 TAX COLLECTION COMMITTEE ESTABLISHED PURSUANT TO THIS 10 SUBSECTION, SUCH GOVERNANCE SHALL CONTINUE AS BEFORE FOR 11 ALL POLITICAL SUBDIVISIONS. 12 (III) THE DEPARTMENT SHALL PROMULGATE APPROPRIATE 13 REGULATIONS GOVERNING THE ESTABLISHMENT OF A NEW COUNTY 14 TAX COLLECTION COMMITTEE NECESSITATED BY THE ACTION OF 15 POLITICAL SUBDIVISIONS UNDER THIS PARAGRAPH IN 16 WITHDRAWING FROM A TAX COLLECTION COMMITTEE ESTABLISHED 17 PURSUANT TO THIS SUBSECTION. AMONG OTHER THINGS, SUCH 18 REGULATIONS SHALL PROVIDE FOR VOTING RIGHTS, QUORUM 19 REQUIREMENTS, MEETING REQUIREMENTS, MEETING AGENDAS, 20 BYLAW REQUIREMENTS AND OTHER ITEMS AS PROVIDED FOR IN 21 THIS SECTION AND OTHER PARTS OF THIS ACT DEALING WITH THE 22 INITIAL ESTABLISHMENT OF TAX COLLECTION COMMITTEES, TO 23 THE EXTENT WARRANTED, AND SHALL ESTABLISH THE TIME FRAME 24 AND SCHEDULE WITHIN WHICH ANY AND ALL ACTIONS NECESSARY 25 TO ESTABLISH SUCH A NEW TAX COLLECTION COMMITTEE ARE TO 26 BE EFFECTUATED TO ENSURE A TIMELY AND EFFICIENT TRANSFER 27 OF TAX COLLECTION AND GOVERNANCE RESPONSIBILITIES. 28 Section 506. Tax officer. 29 (a) Collection and administration.--Notwithstanding any 30 other provision of law to the contrary, income taxes shall be 20070S1063B2186 - 88 -
1 collected and administered by one tax officer in each tax 2 collection district appointed under section 507(a). Two or more 3 tax collection districts may appoint the same tax officer. If 4 two or more tax collection districts form a joint tax collection 5 committee, the joint tax collection committee shall appoint a 6 single tax officer. 7 (b) Standards.--A tax collection committee may not appoint a 8 tax officer that: 9 (1) has been convicted of a felony involving fraud, 10 extortion or dishonesty in any jurisdiction; 11 (2) has engaged in conduct which significantly adversely 12 reflects on the applicant's credibility, honesty or 13 integrity; 14 (3) is unable to obtain the bond required by section 15 509(d); 16 (4) has not satisfied the mandatory education 17 requirements under section 508(e); or 18 (5) does not meet the qualifications and requirements 19 established by the department under section 508(f). 20 Section 507. Appointment of tax officer. 21 (a) Appointment.--By September 15, 2010, each tax collection 22 committee shall appoint a tax officer by resolution and shall 23 notify the department of the appointment, including the tax 24 officer's name, address and telephone number and any other 25 information required by the department within ten days of the 26 appointment. The name, telephone number and address of the tax 27 officer appointed shall be added to the official register and 28 shall be effective for the assessment, collection and 29 administration of income taxes levied, imposed and collected in 30 fiscal years beginning on and after January 1, 2012. If the 20070S1063B2186 - 89 -
1 position of tax officer becomes vacant, the tax collection 2 committee shall appoint a new tax officer by resolution. 3 (b) Court selection.-- 4 (1) If a tax collection committee has not appointed a 5 tax officer under subsection (a) or if a tax officer ceases 6 to hold office and a successor has not been appointed within 7 30 days of the vacancy, the tax collection committee shall 8 immediately notify the department and shall submit the names 9 of at least two nominees for the position of tax officer to 10 the court of common pleas in the county in which the tax 11 collection district is located. The court shall select a tax 12 officer from among the nominees submitted by the tax 13 collection committee. 14 (2) If the tax collection committee fails to submit 15 nominees in accordance with this subsection, any political 16 subdivision within the tax collection district may, after 17 notifying the department, petition the court to select a tax 18 officer. The court may provide for other persons to submit 19 nominations for the position of tax officer. The court may 20 select a tax officer from among the nominees. 21 (3) In the event that a tax officer is to be selected by 22 the court under this subsection, the department shall inform 23 the court of the time frame by which an appointment of a tax 24 officer is needed and of upcoming deadlines which the tax 25 officer must meet in order to timely fulfill the duties of 26 appointment. 27 (4) Upon the selection of a tax officer by the court, 28 the tax collection committee shall appoint the person 29 selected. 30 (c) Compensation.--The tax officer shall receive reasonable 20070S1063B2186 - 90 -
1 compensation for services and expenses as determined by the tax 2 collection committee. At the discretion of the tax collection 3 committee, the tax officer may be permitted to withhold the 4 amount of the tax officer's compensation from income taxes 5 collected, if the monthly reports required by section 509(b) 6 submitted by the tax officer include an accounting for all 7 compensation withheld. 8 (d) Written agreement.--Except when a tax collection 9 committee establishes a tax bureau under section 505(a.2)(2), 10 all appointments of a tax officer shall be made pursuant to a 11 written agreement between the tax officer and the tax collection 12 committee. The agreement shall be approved by the committee by 13 resolution. 14 (E) ELIGIBILITY OF EXISTING TAX COLLECTION ENTITIES.-- <-- 15 NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, IT SHALL 16 NOT BE REGARDED AS A CONFLICT OF INTEREST FOR A DELEGATE OR 17 ALTERNATE TO PARTICIPATE IN DISCUSSIONS AND VOTING OF THE TAX 18 COLLECTION COMMITTEE RELATING TO THE APPOINTMENT OF A TAX 19 OFFICER, SOLELY ON THE BASIS THAT THE DELEGATE OR ALTERNATE ALSO 20 IS AN EMPLOYEE OR MEMBER OF THE GOVERNING BODY OF AN EXISTING 21 TAX BUREAU OR OTHER PUBLIC TAX COLLECTION ENTITY WHICH IS UNDER 22 CONSIDERATION FOR APPOINTMENT AS THE TAX OFFICER OR WHICH HAS 23 SUBMITTED A PROPOSAL FOR APPOINTMENT AS TAX OFFICER, OR IS AN 24 EMPLOYEE OR MEMBER OF THE GOVERNING BODY OF A POLITICAL 25 SUBDIVISION PARTICIPATING IN SUCH AN EXISTING TAX BUREAU OR 26 OTHER PUBLIC TAX COLLECTION ENTITY. 27 Section 508. Powers and duties of the department. 28 (a) Additional powers.--In addition to the powers and duties 29 provided for in this act, the department, in consultation with 30 the Department of Revenue, shall prescribe standardized forms, 20070S1063B2186 - 91 -
1 reports, notices, returns and schedules and shall promulgate 2 regulations as necessary to carry out the provisions of this 3 act. 4 (b) Temporary regulations.--The department may promulgate 5 temporary regulations, for a period of two years, as necessary, 6 which shall be published in the Pennsylvania Bulletin. The 7 temporary regulations promulgated by the department shall expire 8 no later than three years following the effective date of this 9 part or upon promulgation of regulations as generally provided 10 by law. The temporary regulations shall not be subject to any of 11 the following: 12 (1) Sections 201, 202, 203 and 204 of the act of July 13 31, 1968 (P.L.769, No.240), referred to as the Commonwealth 14 Documents Law. 15 (2) The act of June 25, 1982 (P.L.633, No.181), known as 16 the Regulatory Review Act. 17 (c) Interim regulations.--Until promulgation of the 18 temporary or permanent regulations under this section, rules and 19 regulations in use by tax officers under the former Division 20 V(c) of section 13 shall remain valid. 21 (d) Departmental study.-- 22 (1) Immediately upon the earliest effective date of this 23 section, the department shall commence a study of existing 24 local earned income tax collection methods and practices 25 within this Commonwealth, with particular attention to the 26 practices and methods of previously existing cooperative 27 collection bureaus established by one or more political 28 subdivisions, for the purpose of identifying, collecting and 29 comparing those practices, methods, structures, procedures, 30 regulations, software, information systems, governance 20070S1063B2186 - 92 -
1 alternatives, risk management strategies and other 2 characteristics that appear to promote the greatest 3 likelihood of effectiveness, cost efficiency, loss prevention 4 and willing intergovernmental cooperation. 5 (2) No later than December 31, 2009, the department 6 shall furnish each tax collection committee a report of the 7 findings and recommendations resulting from the study, 8 including sample bylaws, procedures, regulations, forms, 9 agreements, requests for proposals for the selection of tax 10 officers, requests for proposals for the procurement of 11 software systems and other critical systems and other 12 appropriate samples. 13 (3) As a part of the study, the department shall also 14 investigate and report upon the feasibility of contracting on 15 a Statewide basis for the development and/or procurement of 16 appropriate software systems that may be adopted and 17 purchased by county tax collection districts or their 18 appointed tax officers through the Commonwealth's cooperative 19 purchasing programs. 20 (4) Nothing in this subsection shall be construed to 21 authorize the department to compel the disclosure of 22 information that is confidential, proprietary or a trade 23 secret. 24 (e) Mandatory education for tax officers.--Persons and 25 entities seeking or maintaining appointment as tax officers 26 shall complete mandatory education as a prerequisite for their 27 appointment and, for continuing appointment, not less than 28 annually. The department shall provide the mandatory education 29 and shall adopt regulations, guidelines and procedures for the 30 mandatory education sufficient to meet the requirements of this 20070S1063B2186 - 93 -
1 act. 2 (f) Establishment of qualifications and requirements.-- 3 (1) The department shall, by regulation, establish the 4 qualifications and requirements a tax officer must meet prior 5 to being appointed and must meet for continuing appointment. 6 (2) A tax collection committee may establish additional 7 qualifications and requirements a tax officer must meet prior 8 to being appointed and must meet for continuing appointment. 9 Section 509. Powers and duties of tax officer. 10 (a) Tax collection.--In addition to any other power and duty 11 conferred upon a tax officer in this act, it shall be the duty 12 of the tax officer: 13 (1) To collect, reconcile, administer and enforce income 14 taxes imposed on residents and nonresidents of each political 15 subdivision included in the tax collection district. 16 (2) To receive and distribute income taxes and to 17 enforce withholding by employers located in the tax 18 collection district. 19 (3) To receive income taxes distributed by tax officers 20 for other tax collection districts. 21 (4) To distribute income taxes to political subdivisions 22 as required by section 513. 23 (5) To comply with all regulations adopted by the 24 department under this act and all resolutions, policies and 25 procedures adopted by the tax collection committee. 26 (6) To invest all income taxes in the custody of the tax 27 officer in authorized investments, subject to the approval of 28 the tax collection committee. The tax officer shall observe 29 the standard of care that would be observed by a prudent 30 person dealing with property of another. For the purposes of 20070S1063B2186 - 94 -
1 this paragraph, the term "authorized investment" shall 2 include all of the following: 3 (i) Short-term obligations of the United States 4 Government or its agencies or instrumentalities which are 5 backed by the full faith and credit of the United States 6 or are rated in the highest category by a nationally 7 recognized statistical rating organization. 8 (ii) Deposits in savings accounts, time deposits, 9 share accounts or certificates of deposit of 10 institutions, insured by the Federal Deposit Insurance 11 Corporation or the National Credit Union Share Insurance 12 Fund, or their successor agencies, to the extent that the 13 accounts are insured and, for the amount above the 14 insured maximum, that collateral, free from other liens, 15 for the amount is pledged by the depository institution. 16 (iii) Deposits in investment pools established by 17 the State Treasurer or established by local governments 18 pursuant to 53 Pa.C.S. Ch. 23 Subch. A (relating to 19 intergovernmental cooperation) and related statutes, 20 provided that the investment pools are rated in the 21 highest category by a nationally recognized statistical 22 rating organization. 23 (iv) Repurchase agreements which are fully 24 collateralized by obligations of the United States 25 Government or its agencies or instrumentalities, which 26 are free from other liens and backed by the full faith 27 and credit of the United States or are rated in the 28 highest category by a nationally recognized statistical 29 rating organization. 30 (7) To distribute income generated from investments 20070S1063B2186 - 95 -
1 authorized under paragraph (6) as determined by the tax 2 collection committee. 3 (b) Monthly reports.--The tax officer shall, within 20 days 4 after the end of each month, provide a written report, on forms 5 prescribed by the department, to the secretary of the tax 6 collection committee and to the secretary of each political 7 subdivision in the tax collection district for which taxes were 8 collected during the previous month. The report shall include a 9 breakdown of all income taxes, income generated from investments 10 under subsection (a)(6), penalties, costs and other money 11 received, collected, expended and distributed for each political 12 subdivision served by the tax officer and of all money 13 distributed to tax officers for other tax collection districts. 14 (c) Overpayments.--A tax officer shall refund, under 53 15 Pa.C.S. §§ 8425 (relating to refunds of overpayments) and 8426 16 (relating to interest on overpayment), on petition of and proof 17 by the taxpayer, income taxes paid in excess of income taxes 18 rightfully due. 19 (d) Bonds.--Prior to initiating any official duties, each 20 tax officer shall give and acknowledge a bond to the appointing 21 tax collection committee as follows: 22 (1) The tax collection committee shall fix the amount of 23 the bond in an amount equal to the maximum amount of taxes 24 that may be in the possession of the tax officer at any given 25 time or an amount sufficient, in combination with fiscal 26 controls, insurance and other risk management and loss 27 prevention measures used by the tax collection district, to 28 secure the financial responsibility of the tax officer in 29 accordance with guidelines adopted by the department. The 30 amount of the bond shall be revised annually by the tax 20070S1063B2186 - 96 -
1 collection committee based upon the annual examination 2 required under section 505(h). 3 (2) Each bond shall be joint and several, with one or 4 more corporate sureties, which shall be surety companies 5 authorized to do business in this Commonwealth and licensed 6 by the Insurance Department. 7 (3) Each bond shall be conditioned upon the completion 8 of all of the following by the tax officer's employees and 9 appointees: 10 (i) The faithful execution of all duties required of 11 the tax officer. 12 (ii) The just and faithful accounting or payment 13 over of all moneys and balances paid to, received or held 14 by the tax officer by virtue of the office in accordance 15 with law. 16 (iii) The delivery of all tax records or other 17 official items held in right as the tax officer to the 18 tax officer's successor in office. 19 (4) Each bond shall be taken in the name of the tax 20 collection district and shall be for the use of the tax 21 collection district appointing the tax officer, and for the 22 use of any other political subdivision or tax collection 23 district for which income taxes shall be collected or 24 distributed in case of a breach of any conditions of the bond 25 by the acts or neglect of the principal on the bond. 26 (5) A tax collection committee or any political 27 subdivision may sue upon the bond for the payment or 28 distribution of income taxes. 29 (6) Each bond shall contain the name of the surety 30 company bound on the bond. 20070S1063B2186 - 97 -
1 (7) The tax collection committee may, upon cause shown 2 and due notice to the tax officer and the tax officer's 3 sureties, require or allow the substitution or the addition 4 of a surety company acceptable to the tax collection 5 committee for the purpose of making the bond sufficient in 6 amount, without releasing the sureties first approved from 7 any accrued liability or previous action on the bond. 8 (8) The tax collection committee shall designate the 9 custodian of the bond. 10 (9) The tax officer shall file copies of all bonds in 11 effect with each political subdivision in the tax collection 12 district. 13 (10) A copy of all bonds in effect shall be made 14 available upon request and at no cost to the department or to 15 a tax collection district or political subdivision seeking 16 payment or distribution of income taxes authorized by this 17 act. 18 (e) Records.--It shall be the duty of the tax officer to 19 keep a record showing the amount of income taxes received from 20 each taxpayer or other tax officer, the date of receipt, the 21 amount and date of all other moneys received or distributed and 22 any other information required by the department. All tax 23 records shall be the property of the political subdivision and 24 the tax collection district in which the taxes were collected. 25 The tax collection district and tax officer shall retain all tax 26 records as directed by the tax collection committee and, when 27 applicable, in accordance with retention and disposition 28 schedules established by the Local Government Records Committee 29 of the Pennsylvania Historical and Museum Commission under 53 30 Pa.C.S. Ch. 13 Subch. F (relating to records). Tax records under 20070S1063B2186 - 98 -
1 this subsection may be retained electronically as permitted by 2 law. 3 (f) Employer and taxpayer audits.-- 4 (1) In order to verify the accuracy of any income tax 5 declaration or return or, if no declaration or return was 6 filed, to ascertain the income tax due, the tax officer and 7 the tax officer's designated employees may examine or audit 8 the records pertaining to income taxes due of any of the 9 following: 10 (i) An employer. 11 (ii) A taxpayer. 12 (iii) A person whom the tax officer reasonably 13 believes to be an employer or taxpayer. 14 (2) The examination or audit conducted by the tax 15 officer and the tax officer's designated employees shall 16 conform to the requirements set forth in 53 Pa.C.S. Ch. 84, 17 Subch. C (relating to local taxpayers bill of rights). 18 (3) Every employer and taxpayer or other person whom the 19 tax officer reasonably believes to be an employer or taxpayer 20 shall provide to the tax officer and the tax officer's 21 designated employees the means, facilities and opportunity 22 for the examination and investigation authorized under 23 paragraph (1). 24 (4) For purposes of this subsection, the term "records" 25 shall include any books, papers, and relevant Federal or 26 State tax returns and accompanying schedules, or supporting 27 documentation for any income taxable under this act. 28 (g) Exchange of information.-- 29 (1) The tax officer of each tax collection district 30 shall ensure that the tax collection district enters into an 20070S1063B2186 - 99 -
1 agreement with the Department of Revenue for the exchange of 2 information as necessary for the collection of income taxes. 3 (2) The Department of Revenue may enter into agreements 4 with each tax collection district and shall establish 5 procedures under which tax collection, filing and other 6 taxpayer and locality information in its custody will be made 7 available to tax officers for purposes of collection, 8 reconciliation and enforcement no later than one year after 9 the deadline for filing returns for the tax year in question. 10 (h) Actions for collection of income taxes.--The tax officer 11 may file an action in the name of a political subdivision within 12 the tax collection district for the recovery of income taxes due 13 to the political subdivision and unpaid. Nothing in this 14 subsection shall affect the authority of a political subdivision 15 to file an action in its own name for collection of income taxes 16 under this chapter. This subsection shall not be construed to 17 limit a tax officer, a tax collection district or political 18 subdivision from recovering delinquent income taxes by any other 19 means provided by this act. Actions for collection of income 20 taxes shall be subject to the following: 21 (1) Except as set forth in paragraph (2) or (4), an 22 action brought to recover income taxes must be commenced 23 within three years of the later of the date: 24 (i) the income taxes are due; 25 (ii) the declaration or return has been filed; or 26 (iii) of a redetermination of compensation or net 27 profits by the Department of Revenue. 28 (2) If there is substantial understatement of income tax 29 liability of 25% or more and there is no fraud, an action 30 must be commenced within six years. 20070S1063B2186 - 100 -
1 (3) Except as set forth in paragraph (4)(ii), (iii) or 2 (iv), an action by a tax officer for recovery of an erroneous 3 refund must be commenced as follows: 4 (i) Except as set forth in subparagraph (ii), within 5 two years after making the refund. 6 (ii) If it appears that any part of the refund was 7 induced by fraud or misrepresentation of material fact, 8 within five years after making the refund. 9 (4) There is no limitation of action if any of the 10 following apply: 11 (i) A taxpayer fails to file a declaration or return 12 required under this act. 13 (ii) An examination of a declaration or return or of 14 other evidence in the possession of the tax officer 15 relating to the declaration or return reveals a 16 fraudulent evasion of income taxes. 17 (iii) An employer has deducted income taxes under 18 section 512 and has failed to pay the amount deducted to 19 the tax officer. 20 (iv) An employer has intentionally failed to make 21 deductions required by this act. 22 (i) Interest and penalties.-- 23 (1) Except as provided in paragraph (2), if the income 24 tax is not paid when due, interest at the rate the taxpayer 25 is required to pay to the Commonwealth under section 806 of 26 the act of April 9, 1929 (P.L.343, No.176), known as The 27 Fiscal Code, on the amount of the income tax, and an 28 additional penalty of 1% of the amount of the unpaid income 29 tax for each month or fraction of a month during which the 30 income tax remains unpaid shall be added and collected but 20070S1063B2186 - 101 -
1 the amount shall not exceed 15% in the aggregate. Where an 2 action is brought for the recovery of the income tax, the 3 taxpayer liable for the income tax shall, in addition, be 4 liable for the costs of collection, interest and penalties. 5 (2) The department may establish conditions under which 6 a tax officer, with the concurrence of the tax collection 7 committee, may abate interest or penalties that would 8 otherwise be imposed for the nonreporting or underreporting 9 of income tax liabilities or for the nonpayment of income 10 taxes previously imposed and due if the taxpayer voluntarily 11 files delinquent returns and pays the income taxes in full. 12 (3) The provisions of paragraph (2) shall not affect or 13 terminate any petitions, investigations, prosecutions or 14 other proceedings pending under of this chapter, or prevent 15 the commencement or further prosecution of any proceedings by 16 the proper authorities for violations of this act. No 17 proceedings shall, however, be commenced on the basis of 18 delinquent returns filed pursuant to subsection (h) if the 19 returns are determined to be substantially true and correct 20 and the income taxes are paid in full within the prescribed 21 time. 22 (j) Fines and penalties for violations.-- 23 (1) Any taxpayer who fails, neglects or refuses to make 24 any declaration or return required by this chapter, any 25 employer who fails, neglects or refuses to register, keep or 26 supply records or returns required by section 512 or to pay 27 the income tax deducted from employees, or fails, neglects or 28 refuses to deduct or withhold the income tax from employees, 29 any taxpayer or employer who refuses to permit the tax 30 officer appointed by a tax collection committee or an 20070S1063B2186 - 102 -
1 employee or agent of the tax officer to examine books, 2 records and papers, and any taxpayer or employer who 3 knowingly makes any incomplete, false or fraudulent return, 4 or attempts to do anything whatsoever to avoid the full 5 disclosure of the amount of income in order to avoid the 6 payment of income taxes shall, upon conviction thereof, be 7 sentenced to pay a fine of not more than $2,500 for each 8 offense and reasonable costs, and in default of payment of 9 said fine and costs, to imprisonment for not more than six 10 months. 11 (2) Any employer required under this chapter to collect, 12 account for and distribute income taxes who willfully fails 13 to collect or truthfully account for and distribute income 14 taxes, commits a misdemeanor and shall, upon conviction, be 15 sentenced to pay a fine not exceeding $25,000 or to 16 imprisonment not exceeding two years, or both. 17 (3) The penalties imposed under this subsection shall be 18 in addition to any other costs and penalties imposed by this 19 act. 20 (4) The failure of any person to obtain forms required 21 for making the declaration or returns required by this act 22 shall not excuse the person from making the declaration or 23 return. 24 (k) Collection.--In addition to the powers and duties 25 enumerated in this section, when designated by the tax 26 collection committee a tax officer may collect other taxes 27 levied pursuant to this act, the act of June 27, 2006 (1st 28 Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act, or 29 other statutory law. 30 Section 510. Fines and penalties against tax officers. 20070S1063B2186 - 103 -
1 (a) Distribution of nonresident taxes.--The Attorney <-- 2 General, a A tax collection district or a political subdivision <-- 3 that brings an action under subsection (e) with respect to 4 distribution of income taxes under section 513 may seek 5 equitable relief from a tax officer, including an accounting of 6 all undistributed income taxes and monetary damages, in the form 7 of recovery of the income taxes not previously distributed plus 8 interest calculated from the date that the income taxes should 9 have been distributed. In addition, the court may impose a civil 10 penalty not to exceed $2,500 for each quarter for which income 11 taxes were not distributed in accordance with section 513, plus 12 reasonable costs and attorney fees. If a tax officer fails to 13 distribute income taxes to the appropriate political subdivision 14 as required under section 513 for four consecutive tax quarters, 15 the court may impose a civil penalty not to exceed $5,000. In 16 addition, the court may impose a fine not to exceed $100 per day 17 for every day past the deadline that a tax officer does not 18 respond to a claim under section 513(b). 19 (b) Monthly reports and audits of income taxes.--If a tax 20 officer fails to submit the report required under section 21 509(b), a tax collection district or a political subdivision 22 entitled to receive the report may bring an action in the court 23 of common pleas of the county in which the tax collection 24 district is primarily located. The court may impose a civil 25 penalty of $20 a day for each day that the report is overdue, 26 not to exceed $500. If an examination submitted under section 27 505(h) includes any findings of noncompliance, the court may 28 impose an additional civil penalty of not less than $500 but not 29 more than $2,500. 30 (c) Failure of duty.--An action may be brought against the 20070S1063B2186 - 104 -
1 tax officer to compel the performance of duties required by this 2 chapter or imposed by regulations adopted pursuant to this 3 chapter, including the duty to deliver all tax records and other 4 official items held in right as tax officer to the tax officer's 5 successor. Upon a finding of failure to perform a duty, the 6 court may impose a penalty not to exceed $5,000; and the tax 7 officer may be held liable for the cost of reproducing tax 8 records if they are lost or cannot be delivered. 9 (d) Other violations.--A tax officer who violates any other 10 provision of this act shall be subject to a civil penalty of up 11 to $2,500 for each violation. 12 (e) Actions against a tax officer.--An action against a tax 13 officer for a violation of this chapter may be brought by a tax 14 collection district or a political subdivision for which the tax 15 officer collects income taxes, a political subdivision or tax 16 collection committee owed income taxes by the tax officer or by 17 a surety. 18 (f) Rescinded appointment.-- 19 (1) A tax collection committee shall temporarily remove 20 a tax officer if a criminal action is commenced against the 21 tax officer for an offense which would constitute a violation 22 of the standards of office under section 506(b). If the tax 23 officer is convicted or pleads guilty or nolo contendere in 24 the action, the tax collection committee shall rescind the 25 appointment and remove the tax officer permanently. 26 (2) A tax collection committee may remove or rescind the 27 appointment of a tax officer where the tax officer or an 28 employee or agent of the tax officer violates the provisions 29 under section 514(b). 30 (3) A tax collection committee may remove or rescind the 20070S1063B2186 - 105 -
1 appointment of a tax officer for cause. 2 (4) A tax collection committee may not retain a tax 3 officer who has been penalized under subsection (a), (b), (c) 4 or (d) more than three times or who fails to satisfy the 5 requirements under section 506. 6 (g) Interpretation.--A tax officer shall not be considered a 7 debt collector for purposes of the act of March 28, 2000 8 (P.L.23, No.7), known as the Fair Credit Extension Uniformity 9 Act. Except as otherwise authorized in this act, a tax officer 10 shall be subject to the restrictions and prohibitions imposed on 11 creditors. Notwithstanding the provisions of the Fair Credit 12 Extension Uniformity Act, this act shall supersede any 13 restrictions and prohibitions on creditors otherwise applicable 14 under the Fair Credit Extension Uniformity Act. 15 (h) Withdrawal from tax collection district.-- 16 (1) In an action brought by a political subdivision 17 under this section after January 1, 2014, the court may, in 18 addition to other available remedies, grant a request by the 19 political subdivision to withdraw from the tax collection 20 district for good cause, provided the court determines, after 21 hearing, that all of the following conditions exist: 22 (i) The political subdivision has suffered loss in 23 income tax revenues that is directly and primarily 24 attributable to the willful and continued failure of the 25 tax officer or tax collection committee to comply with 26 the provisions of this act. 27 (ii) The tax collection committee has failed to take 28 reasonable measures to correct the deficiencies in the 29 performance of the tax officer and otherwise assure 30 compliance with the requirements of this act. 20070S1063B2186 - 106 -
1 (iii) The political subdivision and the tax 2 collection committee have engaged in good faith mediation 3 before a special master appointed by the court, but 4 nonetheless have failed to reach agreement about 5 alternative corrective measures in lieu of withdrawal of 6 the political subdivision from the tax collection 7 district. 8 (iv) Other relief available that could be ordered by 9 the court would not be adequate to provide a reasonable 10 prospect of compliance by the tax officer and tax 11 collection committee with the requirements of this act 12 and that withdrawal of the political subdivision from the 13 tax collection district is otherwise in the best 14 interests of the political subdivision, taxpayers and 15 employers. 16 (2) (i) In the event the court grants a request by a 17 political subdivision under this section to withdraw from 18 the tax collection district in which it is located, the 19 governing body of the political subdivision may withdraw 20 by adopting a resolution to that effect and appointing a 21 tax officer to collect the income tax levied by that 22 political subdivision, effective for the next calendar 23 year beginning at least six months after the adoption of 24 such resolution. 25 (ii) With respect to the income tax levied by that 26 political subdivision, a tax officer appointed pursuant 27 to this paragraph shall have the same powers and duties 28 as a tax officer appointed by a tax collection district 29 and all other requirements of this act pertaining to the 30 functions and qualifications of tax collection districts 20070S1063B2186 - 107 -
1 and tax officers, and the related obligations of 2 employers and taxpayers shall apply equally to the 3 political subdivision, its governing body and a tax 4 officer appointed by that political subdivision. 5 Section 511. Tax registers. 6 (a) Requirement.--The department shall maintain a tax 7 register and an official register. All of the following shall 8 apply: 9 (1) The department shall maintain a tax register on the 10 department's Internet website. Information for the tax 11 register shall be furnished by each county and each political 12 subdivision to the department as prescribed by the 13 department. The department shall continuously update the tax 14 register. 15 (2) As part of the tax register under paragraph (1), the 16 department shall maintain an official register. The 17 requirement to maintain an official register in accordance 18 with this section shall supersede the requirements for an 19 official register in any act. 20 (3) The official register shall be organized by 21 municipality and shall list: 22 (i) Each municipality and coterminous school 23 district. 24 (ii) The effective income tax rate on taxpayers who 25 reside in the municipality. 26 (iii) The effective income tax rate on taxpayers who 27 reside in the school district. 28 (iv) The combined municipal and school district 29 income tax rate on taxpayers residing in each 30 municipality. 20070S1063B2186 - 108 -
1 (v) The income tax rate on taxpayers working within 2 the municipality. 3 (vi) Whether an income tax is a personal income tax 4 levied under the act of June 27, 2006 (1st Sp.Sess., 5 P.L.1873, No.1), known as the Taxpayer Relief Act, or any 6 other act. 7 (vii) The effective emergency and municipal services 8 tax rate on taxpayers working within the municipality. 9 (viii) The effective emergency and municipal 10 services tax rate on taxpayers working within the school 11 district. 12 (ix) The combined municipal and school district 13 emergency and municipal services tax rate. 14 (x) The amount of any other withholding tax. 15 (xi) The name, telephone number, address, e-mail and 16 Internet address, where available, of the tax officer 17 responsible for administering the collection of the tax. 18 (xii) Any other information deemed necessary by the 19 department. 20 (4) Each year the department shall update and officially 21 release withholding tax rates on the official register on 22 June 15 and December 15. Tax rates released on June 15 shall 23 become effective July 1. Tax rates released on December 15 24 shall become effective January 1 of the following year. The 25 department may revise the notification, official release and 26 effective dates of the register for good cause. Six months 27 prior to the revision, the department shall notify each 28 affected political subdivision of the revision and shall 29 publish notice of the revision in the Pennsylvania Bulletin. 30 (5) Information for the official register shall be 20070S1063B2186 - 109 -
1 furnished by each political subdivision to the department as 2 prescribed by the department and shall include a copy of the 3 ordinance or resolution enacting, repealing or changing the 4 tax. The department shall be notified of changes to the 5 official register as follows: 6 (i) New withholding tax enactments, repeals and 7 changes shall be received by the department no later than 8 June 1 to require withholding of a new tax, withholding 9 at a new rate or to suspend withholding of such tax 10 effective July 1 of that year. All new withholding tax 11 enactments, repeals and changes received by the 12 department by June 1 shall be officially released by the 13 department June 15 and become effective July 1. Failure 14 of the department to receive information by June 1 from 15 political subdivisions regarding current withholding tax 16 rates, new withholding tax enactments, repeals and 17 changes shall be construed by the department to mean that 18 the information contained in the previous December 15 19 release of the official register is still in force. 20 Information received by the department after June 1 but 21 before December 1 shall be officially released on 22 December 15. 23 (ii) New withholding tax enactments, repeals and 24 changes shall be received by the department no later than 25 December 1 to require withholding of a new tax, 26 withholding at a new rate or to suspend withholding of 27 such tax effective January 1 of the following year. All 28 new withholding tax enactments, repeals and changes 29 received by the department by December 1 shall be 30 officially released by the department on December 15 and 20070S1063B2186 - 110 -
1 become effective January 1 of the following year. Failure 2 of the department to receive information by December 1 3 from political subdivisions regarding current withholding 4 tax rates, new withholding tax enactments, repeals and 5 changes shall be construed by the department to mean that 6 the information contained in the previous June 15 release 7 of the official register is still in force. Information 8 received by the department after December 1 but before 9 June 1 shall be officially released on June 15. 10 (6) (i) Employers shall not be required to deduct from 11 compensation of their employees or make reports of 12 compensation in connection with any withholding tax that 13 is not released on the official register as of June 15 14 and December 15 of each year as provided in paragraphs 15 (4) and (5), unless the political subdivision imposing 16 the tax has provided written notice to the employer of 17 the tax or tax rate and the withholding requirement. 18 (ii) Notwithstanding any law to the contrary, no 19 political subdivision or tax officer may require any 20 employer to deduct a withholding tax at a rate or amount 21 that is not released on the official register, unless the 22 political subdivision imposing the tax has provided 23 written notice to the employer of the tax or tax rate and 24 the withholding requirement. 25 (iii) The provisions of this paragraph shall not 26 affect the liability of any taxpayer for withholding 27 taxes lawfully imposed under this act. 28 (7) An employer may withhold at the most recently 29 available rate on the tax register even if such rate is 30 different than the tax rate released on the official register 20070S1063B2186 - 111 -
1 as provided in paragraphs (4) and (5), provided that an 2 employer shall not be required to withhold at a tax rate that 3 is not released on the official register, unless the 4 political subdivision imposing the tax has provided written 5 notice to the employer of the current tax rate. 6 (8) No employer shall be held liable for failure to 7 withhold an income tax from an employee if the failure to 8 withhold the income tax arises from incorrect information 9 submitted by the employee as to the employee's place of 10 residence. 11 (9) No employer shall be held liable for failure to 12 withhold the emergency and municipal services tax or for the 13 payment of tax money withheld to a tax officer if the failure 14 to withhold the taxes arises from incorrect information 15 submitted by the employee as to the employee's place of 16 employment, the employee's principal office or where the 17 employee is principally employed. 18 (b) Definition.--As used in this section, notwithstanding 19 section 501, the terms "income tax" and "withholding tax" 20 include a tax assessed on the income of a taxpayer and levied by 21 a municipality under the act of August 5, 1932 (Sp.Sess., 22 P.L.45, No.45), referred to as the Sterling Act. 23 Section 512. Withholding and remittance. 24 For taxable years commencing on and after January 1, 2012, OR <-- 25 EARLIER TAXABLE YEARS IF SPECIFIED BY A TAX COLLECTION DISTRICT, 26 income taxes shall be withheld, remitted and reported as 27 follows: 28 (1) Every employer having an office, factory, workshop, 29 branch, warehouse or other place of business within a tax 30 collection district who employs one or more persons, other 20070S1063B2186 - 112 -
1 than domestic servants, for a salary, wage, commission or 2 other compensation, who has not previously registered, shall, 3 within 15 days after becoming an employer, register with the 4 tax officer the name and address of the employer and such 5 other information as the department may require. 6 (2) An employer shall require each new employee to 7 complete a certificate of residency form, which shall be an 8 addendum to the Federal Employee's Withholding Allowance 9 Certificate (Form W-4). An employer shall also require any 10 employee who changes their address or domicile to complete a 11 certificate of residency form. Upon request, certificate of 12 residency forms shall be provided by the department. The 13 certificate of residency form shall provide information to 14 help identify the political subdivisions where an employee 15 lives and works. 16 (3) Every employer having an office, factory, workshop, 17 branch, warehouse or other place of business within a tax 18 collection district that employs one or more persons, other 19 than domestic servants, for a salary, wage, commission or 20 other compensation, shall, at the time of payment, deduct 21 from the compensation due each employee employed at such 22 place of business the greater of the employee's resident tax 23 or the employee's nonresident tax as released in the official 24 register under section 511. 25 (4) Except as set forth in paragraph (5), within 30 days 26 following the end of each calendar quarter, every employer 27 shall file a quarterly return and pay the amount of income 28 taxes deducted during the preceding calendar quarter to the 29 tax officer for the place of employment of each employee. The 30 form shall show the name, address and Social Security number 20070S1063B2186 - 113 -
1 of each employee, the compensation of the employee during the 2 preceding three-month period, the income tax deducted from 3 the employee, the political subdivisions imposing the income 4 tax upon the employee, the total compensation of all 5 employees during the preceding calendar quarter, the total 6 income tax deducted from the employees and paid with the 7 return and any other information prescribed by the 8 department. 9 (5) Notwithstanding paragraph (4), the provisions of 10 this paragraph shall apply if an employer has more than one 11 place of employment in more than one tax collection district. 12 Within 30 days following the last day of each month, the 13 employer may file the return required by paragraph (4) and 14 pay the total amount of income taxes deducted from employees 15 in all work locations during the preceding month to the tax 16 officer for either the tax collection district in which the 17 employer's payroll operations are located or as determined by 18 the department. The return and income taxes deducted shall be 19 filed and paid electronically. The employer must file a 20 notice of intention to file combined returns and make 21 combined payments with the tax officer for each place of 22 employment at least one month before filing its first 23 combined return or making its first combined payment. This 24 paragraph shall not be construed to change the location of an 25 employee's place of employment for purposes of nonresident 26 tax liability. 27 (6) Any employer who for two of the preceding four 28 quarterly periods has failed to deduct the proper income tax, 29 or any part of the income tax, or has failed to pay over the 30 proper amount of income tax as required by paragraph (3) to 20070S1063B2186 - 114 -
1 the tax collection district, may be required by the tax 2 officer to file returns and pay the income tax monthly. In 3 such cases, payments of income tax shall be made to the tax 4 officer on or before the last day of the month succeeding the 5 month for which the income tax was withheld. 6 (7) On or before February 28 of the succeeding year, 7 every employer shall file with the tax officer where income 8 taxes have been deducted and remitted pursuant to paragraph 9 (3): 10 (i) An annual return showing, for the period 11 beginning January 1 of the current year and ending 12 December 31 of the current year, the total amount of 13 compensation paid, the total amount of income tax 14 deducted, the total amount of income tax paid to the tax 15 officer and any other information prescribed by the 16 department. 17 (ii) An individual withholding statement, which may 18 be integrated with the Federal Wage and Tax Statement 19 (Form W-2), for each employee employed during all or any 20 part of the period beginning January 1 of the current 21 year and ending December 31 of the current year, setting 22 forth the address and Social Security number, the amount 23 of compensation paid to the employee during the period, 24 the amount of income tax deducted, the amount of income 25 tax paid to the tax officer, the numerical code 26 prescribed by the department representing the tax 27 collection district where the payments required by 28 paragraphs (4) and (5) were remitted and any other 29 information required by the department. Every employer 30 shall furnish one copy of the individual withholding 20070S1063B2186 - 115 -
1 statement to the employee for whom it is filed. 2 (8) Any employer who discontinues business prior to 3 December 31 of the current year shall, within 30 days after 4 the discontinuance of business, file returns and withholding 5 statements required under this section and pay the income tax 6 due. 7 (9) Except as otherwise provided in section 511, an 8 employer who willfully or negligently fails or omits to make 9 the deductions required by this subsection shall be liable 10 for payment of income taxes which the employer was required 11 to withhold to the extent that the income taxes have not been 12 recovered from the employee. The failure or omission of any 13 employer to make the deductions required by this section 14 shall not relieve any employee from the payment of the income 15 tax or from complying with the requirements for filing of 16 declarations and returns. 17 Section 513. Distribution of income taxes. 18 (a) General rule.--Subject to subsection (b), all of the 19 following apply: 20 (1) Unless otherwise agreed to or required by the tax 21 collection committee, distribution of income taxes from a tax 22 officer to political subdivisions within the tax collection 23 district or to other tax collection districts shall be as 24 follows: 25 (i) Income taxes received from employers prior to 26 April 1, 2013, under section 512(4) shall be distributed 27 within 60 days of the later of: 28 (A) receipt; or 29 (B) the deadline for payment under section 30 512(4). 20070S1063B2186 - 116 -
1 (ii) Income taxes received from employers on or 2 after April 1, 2013, under section 512(4) shall be 3 distributed within 30 days of the later of: 4 (A) receipt; or 5 (B) the deadline for payment under section 6 512(4). 7 (iii) Income taxes received from employers under 8 section 512(5) shall be distributed within 30 days of the 9 last day of the month following receipt. 10 (iv) Income taxes received from taxpayers and other 11 tax collection districts prior to April 1, 2013, shall be 12 distributed within 60 days of receipt. 13 (v) Income taxes received from taxpayers and other 14 tax collection districts on or after April 1, 2013, shall 15 be distributed within 30 days of receipt. 16 (2) Income taxes received from employers, taxpayers or 17 other tax collection districts shall be distributed based on 18 the information submitted by the employers, taxpayers or tax 19 collection districts. It shall not be permissible to base the 20 distribution of income taxes on any method not expressly 21 authorized by act of the General Assembly. 22 (3) A tax officer shall maintain a record of all income 23 taxes distributed under this section, which shall include all 24 of the information required in the reports under section 25 512(4) and (5), the date of distribution, the political 26 subdivision or tax officer to which the income taxes are 27 distributed and any other information required by the 28 department. The record shall be provided to another tax 29 collection district at the time of distribution. 30 (4) A tax officer who, within two years after receiving 20070S1063B2186 - 117 -
1 an income tax payment after reasonable efforts meeting 2 conditions established by the tax collection committee, 3 cannot identify the political subdivision entitled to the 4 income tax payment shall make payment to the municipality in 5 which the income tax was collected. 6 (b) Other tax collection districts.--In addition to 7 subsection (a), for distribution of income taxes to other tax 8 collection districts, the following shall apply: 9 (1) If nonresident taxes are not distributed to the 10 appropriate tax officer as required under subsection (a)(1), 11 a tax officer may make a claim for income taxes attributable 12 to residents of the tax collection district served by that 13 tax officer. The tax officer for the tax collection district 14 against which a claim is made shall, within 30 days: 15 (i) pay the claim if it is undisputed; or 16 (ii) respond in writing stating the reasons why the 17 claim cannot be paid. 18 (2) If the tax officer for the tax collection district 19 against which the claim is made does not act under paragraph 20 (1)(i) or (ii), the tax officer making the claim may bring an 21 action in the court of common pleas in the county in which 22 the tax collection district with the claim is primarily 23 located for both the amount of the claim and interest at the 24 rate provided for in 53 Pa.C.S. § 8426 (relating to interest 25 on overpayment) from the date which the income taxes were 26 received from the taxpayer, employer or other tax officer. 27 Notwithstanding any other law to the contrary, an action 28 under this paragraph must be brought within seven years after 29 the claim is made. 30 (c) Codes.--Employers and tax officers shall use political 20070S1063B2186 - 118 -
1 subdivision and tax collection district codes prescribed by the 2 department. 3 (d) Fee prohibition.--No tax officer, political subdivision 4 or tax collection district shall be required to pay a fee or 5 commission to another tax collection district on account of 6 income taxes distributed under this section. 7 Section 514. Confidentiality. 8 (a) General rule.--Any information gained by a tax officer 9 or any employee or agent of a tax officer or of the tax 10 collection committee as a result of any declarations, returns, 11 investigations, hearings or verifications shall be confidential 12 tax information. 13 (b) Prohibited conduct.--It shall be unlawful, except for 14 official purposes or as provided by law, for the Commonwealth, 15 any political subdivision, tax collection committee member, tax 16 officer, or employee or agent of a tax officer or tax collection 17 committee to do any of the following: 18 (1) Divulge or make known confidential tax information. 19 (2) Permit confidential tax information or a book 20 containing an abstract or particulars of the abstract to be 21 seen or examined by any person. 22 (3) Print, publish or otherwise make known any 23 confidential tax information. 24 (c) Penalties.--A person that violates subsection (b) 25 commits a misdemeanor of the third degree and shall, upon 26 conviction, be sentenced to pay a fine of not more than $2,500 27 or to imprisonment for not more than one year, or both. If the 28 offender is a member of the tax collection committee, the member 29 shall be removed from the tax collection committee. If the 30 offender is an employee of a tax collection committee or a 20070S1063B2186 - 119 -
1 political subdivision, the employee shall be discharged from 2 employment. The offender shall pay the costs of prosecution. 3 Section 515. Transition. 4 (a) Fines and penalties against tax officers.-- 5 (1) A political subdivision which brings an action under 6 former Division V(h) of section 13 may seek equitable relief 7 from a tax officer, including an accounting of all 8 undistributed income taxes and monetary damages, in the form 9 of recovery of the income taxes not previously distributed. 10 In addition, the court may impose a civil penalty not to 11 exceed $2,500 for each quarter for which income taxes were 12 not distributed in accordance with former Division V(h) of 13 section 13, plus reasonable costs and attorney fees. 14 (2) If a tax officer fails to distribute income taxes to 15 the appropriate political subdivision as required under 16 former Division V(h) of section 13 for four consecutive 17 quarters, the court may impose a civil penalty not to exceed 18 $5,000. 19 (3) An action may be brought against the tax officer to 20 compel the performance of duties required by Chapter 3 or 21 former section 13 or imposed by regulations adopted pursuant 22 to Chapter 5, including the duty to deliver all tax records 23 and other official items held in right as tax officer to the 24 tax officer's successor. Upon a finding of failure to perform 25 a duty, the court may impose a penalty not to exceed $5,000; 26 and the tax officer may be held liable for the cost or 27 reproducing tax records if they are lost or cannot be 28 delivered. 29 (4) An Article XIII tax officer who violates any other 30 provision of this section or former section 13 shall be 20070S1063B2186 - 120 -
1 subject to a civil penalty of up to $2,500 for each 2 violation. 3 (5) An action against an Article XIII tax officer for a 4 violation of this act may be brought by the Attorney General, <-- 5 a political subdivision for which the Article XIII tax 6 officer collects income taxes, a political subdivision owed 7 income taxes by the Article XIII tax officer or by a surety 8 that is liable because of the violation. 9 (6) A political subdivision shall remove or rescind the 10 appointment of an Article XIII tax officer who has been 11 penalized more than three times under paragraph (1), (2), (3) 12 or (4). 13 (b) Transition.-- 14 (1) (i) The governing body of each political 15 subdivision which imposed an income tax prior to January 16 1, 2011, shall do all of the following: 17 (A) Determine by November 1, 2010, whether the 18 Article XIII tax officer or the newly appointed tax 19 officer shall collect 2011 income taxes. 20 (B) Notify the department by December 1, 2010, 21 of the determination under clause (A) in accordance 22 with section 511(a)(5). 23 (ii) Every employer shall remit 2011 income taxes 24 and file the quarterly and annual reports required by 25 former Division IV(b) and (c) of section 13 to either the 26 Article XIII tax officer or the newly appointed tax 27 officer, as determined by the appropriate political 28 subdivision and released on the official register in 29 accordance with section 511. 30 (2) By July 1, 2011, each tax collection committee shall 20070S1063B2186 - 121 -
1 develop a plan to transition from the provisions of former 2 section 13 to the provisions of sections 512 and 513, and 3 from the Article XIII tax officer to the newly appointed tax 4 officer for 2012 income taxes. 5 (3) The Article XIII tax officer shall deliver all tax 6 records to the political subdivision and the newly appointed 7 tax officer by June 30, 2012, unless otherwise agreed to by 8 the political subdivision and the newly appointed tax 9 officer. 10 (4) Any delinquent income taxes or reports from 2011, or 11 previous years which have not been remitted or provided to 12 the Article XIII tax officer by June 30, 2012, shall become 13 the responsibility of the newly appointed tax officer. A 14 political subdivision which has made other provisions for the 15 collection of delinquent income taxes or reports for 2011 or 16 previous years shall notify the newly appointed tax officer. 17 (5) Beginning with the first quarter of 2012, employers 18 shall remit income taxes withheld and make reports as 19 required by section 512 to the newly appointed tax officer. 20 (c) Definitions.--The following words and phrases when used 21 in this section shall have the meanings given to them in this 22 subsection unless the context clearly indicates otherwise: 23 "Newly appointed tax officer." A tax officer appointed under 24 section 507(a) responsible for the collection of 2012 income 25 taxes. 26 Section 516. Regulatory conflict. 27 In the event of a conflict between a regulation under this 28 chapter and a regulation under the act of June 27, 2006 (1st 29 Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act, in 30 the area of tax collection, the regulation under this chapter 20070S1063B2186 - 122 -
1 shall prevail. 2 Section 517. Audit and evaluation. 3 (a) General rule.--Before 2017, the Legislative Budget and 4 Finance Committee shall conduct an audit and evaluation of the 5 impact of this chapter and consolidated collection of local 6 income taxes. The committee shall consult with the Auditor 7 General in the course of its audit and evaluation. The audit and 8 evaluation shall: 9 (1) Determine the extent to which income tax revenue 10 losses have been minimized or eliminated by the 11 implementation of uniform collection standards and a 12 countywide income tax collection system. 13 (2) Determine whether consolidated collection and 14 standardized withholding and remittance of local income taxes 15 as required in section 512 has simplified the system, reduced 16 fragmentation and reduced the burden of withholding, 17 remitting and distributing the local income tax for 18 employers. 19 (3) Determine if tax compliance is simpler, easier, 20 fairer and less time-consuming for taxpayers. 21 (4) Determine whether the tax collection system under 22 this chapter is more efficient than the prior system. 23 (5) Determine if tax collection committees are 24 exercising their powers and duties under section 505 25 effectively. 26 (6) Determine the extent to which cooperation and 27 coordination exists among tax officers and tax collection 28 districts. 29 (7) Determine whether authorized investments under 30 509(a)(6) and the bonding requirements under section 509(d) 20070S1063B2186 - 123 -
1 provide sufficient protection to income tax collections. 2 (8) Determine whether nonresident and resident taxes are 3 being properly distributed among tax collection districts 4 within this Commonwealth and to political subdivisions within 5 each tax collection district. 6 (9) Determine whether the reporting, audit, 7 accountability, transparency and oversight requirements for 8 taxes collected, distributed and administered in this chapter 9 are adequate and being met within and among tax collection 10 districts. 11 (10) Determine if the appeals boards created under 12 section 505(j) are impartial, fair and effective. 13 (11) Determine whether the penalties against tax 14 officers under section 510 are effective and the extent to 15 which tax officers are in compliance with the rules and 16 regulations required by this chapter, and identify any tax 17 officers that are in substantial noncompliance with these 18 rules and regulations. 19 (12) Determine whether the agreements under section 20 509(g) have been approved by the Department of Revenue and 21 each tax collection district, and that the exchange of 22 information is reciprocal, timely and useful. 23 (13) Determine whether the interest, penalties and fines 24 under section 509(i) and (j) are appropriate and adequate. 25 (14) Recommend needed improvements to the system. 26 (b) Filing requirement.--Copies of the audit findings of the 27 Legislative Budget and Finance Committee under subsection (a) 28 shall be filed with the chair of the Finance Committee of the 29 Senate, the chair of the Finance Committee of the House of 30 Representatives, the department, the Auditor General and with 20070S1063B2186 - 124 -
1 each tax collection committee. 2 Section 24. The act is amended by adding a chapter heading 3 to read: 4 CHAPTER 7 5 COLLECTION OF DELINQUENT TAXES 6 Section 25. The act is amended by adding a section to read: 7 Section 701. Definitions.--As used in this chapter: 8 "Business entity" means a sole proprietorship, corporation, 9 joint-stock association or company, partnership, limited 10 partnership, limited liability company, association, business 11 trust, syndicate or other commercial or professional activity 12 organized under the laws of this Commonwealth or any other 13 jurisdiction. 14 "Employer" means a person, business entity or other entity, 15 including the Commonwealth, its political subdivisions and 16 instrumentalities and public authorities, employing one or more 17 persons for a salary, wage, commission or other compensation. 18 "Private agency" means a business entity or person appointed 19 as a tax collector by a political subdivision. 20 Section 26. Section 18 of the act is renumbered and amended 21 to read: 22 Section [18] 701.1. Distress and Sale of Goods and Chattels 23 of Taxpayer.--Every tax collector under Chapter 3 and tax 24 officer under Chapter 5 shall have power, in case of the neglect 25 or refusal of any person[, copartnership, association, or 26 corporation] or business entity, to make payment of the amount 27 of any tax due [by him] from the person or the business entity, 28 after two months from the date of the tax notice, to levy the 29 amount of such tax, any penalty due thereon and costs, not 30 exceeding costs and charges allowed constables for similar 20070S1063B2186 - 125 -
1 services by distress and sale of the goods and chattels of such 2 delinquent, wherever situate or found, upon giving at least ten 3 days' public notice of such sale, by posting ten written or 4 printed notices, and by one advertisement in a newspaper of 5 general circulation published in the county. 6 No failure to demand or collect any taxes by distress and 7 sale of goods and chattels shall invalidate any return made, or 8 lien filed for nonpayment of taxes, or any tax sale for the 9 collection of taxes. 10 Section 27. Sections 19 and 20 of the act, amended June 21, 11 2007 (P.L.13, No.7), are renumbered and amended to read: 12 Section [19] 702. Collection of Delinquent Per Capita, 13 Occupation, Occupational Privilege, Emergency and Municipal 14 Services, Local Services and [Earned] Income Taxes from 15 Employers, etc.--The tax collector under Chapter 3 and the tax 16 officer under Chapter 5 shall demand, receive and collect from 17 all [corporations, political subdivisions, associations, 18 companies, firms or individuals,] employers, other than the 19 Commonwealth, employing persons owing delinquent per capita, 20 [or] occupation[,] or occupational privilege[,] taxes under 21 Chapter 3 or emergency and municipal services, local services 22 and [earned] income taxes under Chapter 5, or whose spouse owes 23 delinquent per capita, occupation[,] or occupational 24 privilege[,] taxes under Chapter 3 or emergency and municipal 25 services, local services and [earned] income taxes under Chapter 26 5, or having in possession unpaid commissions or earnings 27 belonging to any person or persons owing delinquent per capita, 28 occupation[,] or occupational privilege[,] taxes under Chapter 3 29 or emergency and municipal services, local services and [earned] 30 income taxes under Chapter 5, or whose spouse owes delinquent 20070S1063B2186 - 126 -
1 per capita, occupation[,] or occupational privilege[,] taxes 2 under Chapter 3 or emergency and municipal services, local 3 services and [earned] income taxes under Chapter 5, upon the 4 presentation of a written notice and demand certifying that the 5 information contained therein is true and correct and containing 6 the name of the taxable or the spouse thereof and the amount of 7 tax due. Upon the presentation of such written notice and 8 demand, it shall be the duty of any [such corporation, political 9 subdivision, association, company, firm or individual] employer 10 to deduct from the wages, commissions or earnings of such 11 individual employes, then owing or that shall within sixty days 12 thereafter become due, or from any unpaid commissions or 13 earnings of any such taxable in [its or his] the employer's 14 possession, or that shall within sixty days thereafter come into 15 [its or his] the employer's possession, a sum sufficient to pay 16 the respective amount of the delinquent [per capita, occupation, 17 occupational privilege, emergency and municipal services, local 18 services and earned income] taxes and costs, shown upon the 19 written notice or demand, and to pay the same to the tax 20 collector of the taxing district or to the tax officer for the 21 tax collection district in which such delinquent tax was levied 22 within sixty days after such notice shall have been given. No 23 more than ten percent of the wages, commissions or earnings of 24 the delinquent taxpayer or spouse thereof may be deducted at any 25 one time for delinquent [per capita, occupation, occupational 26 privilege, emergency and municipal services, local services and 27 earned income] taxes and costs. [Such corporation, political 28 subdivision, association, firm or individual] The employer shall 29 be entitled to deduct from the moneys collected from each 30 employe the costs incurred from the extra bookkeeping necessary 20070S1063B2186 - 127 -
1 to record such transactions, not exceeding two percent of the 2 amount of money so collected and paid over to the tax collector 3 or tax officer. Upon the failure of any [such corporation, 4 political subdivision, association, company, firm or individual] 5 employer to deduct the amount of such taxes or to pay the same 6 over to the tax collector or tax officer, less the cost of 7 bookkeeping involved in such transaction, as herein provided, 8 within the time hereby required, [such corporation, political 9 subdivision, association, company, firm or individual] the 10 employer shall forfeit and pay the amount of such tax for each 11 such taxable whose taxes are not withheld and paid over, or that 12 are withheld and not paid over together with a penalty of ten 13 percent added thereto, to be recovered by an action of assumpsit 14 in a suit to be instituted by the tax collector or tax officer, 15 or by the proper authorities of the taxing district or tax 16 collection district, as debts of like amount are now by law 17 recoverable, except that such person shall not have the benefit 18 of any stay of execution or exemption law. The tax collector or 19 tax officer shall not proceed against a spouse or [his] the 20 spouse's employer until [he] the tax collector or tax officer 21 has pursued collection remedies against the delinquent taxpayer 22 and his employer under this section. 23 Section [20] 703. Collection of Delinquent Per Capita, 24 Occupation, Occupational Privilege, Emergency and Municipal 25 Services, Local Services and [Earned] Income Taxes from the 26 Commonwealth.--Upon presentation of a written notice and demand 27 under oath or affirmation, to the State Treasurer or any other 28 fiscal officer of the State, or its boards, authorities, 29 agencies or commissions, it shall be the duty of the treasurer 30 or officer to deduct from the wages then owing, or that shall 20070S1063B2186 - 128 -
1 within sixty days thereafter become due to any employe, a sum 2 sufficient to pay the respective amount of the delinquent per 3 capita, occupation[,] or occupational privilege, emergency and 4 municipal services, local services under Chapter 3 and [earned] 5 income taxes under Chapter 5 and costs shown on the written 6 notice. The same shall be paid to the tax collector or the tax 7 officer of the tax collection district of the taxing district in 8 which said delinquent tax was levied within sixty days after 9 such notice shall have been given. 10 Section 28. Section 20.1 of the act, added October 18, 1975 11 (P.L.425, No.118), is renumbered and amended to read: 12 Section [20.1] 704. Notice.--The tax collector or tax 13 officer shall, at least fifteen days prior to the presentation 14 of a written notice and demand to the State Treasurer or other 15 fiscal officer of the State, or to any [corporation, political 16 subdivision, association, company or individual] employer, 17 notify the taxpayer owing the delinquent tax by registered or 18 certified mail that a written notice and demand shall be 19 presented to [his] the taxpayer's employer unless such tax is 20 paid. The return receipt card for certified or registered mail 21 shall be marked delivered to addressee only, and the cost of 22 notification by certified or registered mail shall be added to 23 the costs for collecting taxes. 24 Section 29. Section 21 of the act, amended November 30, 2004 25 (P.L.1520, No.192), is renumbered and amended to read: 26 Section [21] 705. Collection of Taxes by Suit.--Each taxing 27 district or person, public employe or private agency designated 28 by the taxing district under Chapter 3 and each tax officer 29 under Chapter 5 shall have power to collect unpaid taxes from 30 the persons owing such taxes by suit in assumpsit or other 20070S1063B2186 - 129 -
1 appropriate remedy. Upon each such judgment, execution may be 2 issued without any stay or benefit of any exemption law. The 3 right [of each such taxing district] to collect unpaid taxes 4 under the provisions of this section shall not be affected by 5 the fact that such taxes have been entered as liens in the 6 office of the prothonotary, or the fact that the property 7 against which they were levied has been returned to the county 8 commissioners for taxes for prior years. 9 Section 30. Section 22 of the act is renumbered and amended 10 to read: 11 Section [22] 706. Penalties.--Except as otherwise provided 12 in the case of any tax levied and assessed upon [earned] income, 13 any such political subdivision shall have power to prescribe and 14 enforce reasonable penalties for the nonpayment, within the time 15 fixed for their payment, of taxes imposed under authority of 16 this act and for the violations of the provisions of ordinances 17 or resolutions passed under authority of this act. 18 If for any reason any tax levied and assessed upon [earned] 19 income by any such political subdivision is not paid when due, 20 interest [at the rate of six percent per annum on the amount of 21 said tax, and an additional penalty of one-half of one percent 22 of the amount of the unpaid tax for each month or fraction 23 thereof during which the tax remains unpaid,] and penalties as 24 provided in section 509(i) shall be added and collected. When 25 suit is brought for the recovery of any such tax, the person 26 liable therefor shall, in addition, be liable for the costs of 27 collection and the interest and penalties herein imposed. 28 Section 31. Section 22.1 of the act, amended June 21, 2007 29 (P.L.13, No.7), is renumbered and amended to read: 30 Section [22.1] 707. Costs of Collection of Delinquent Per 20070S1063B2186 - 130 -
1 Capita, Occupation, Occupational Privilege, Emergency and 2 Municipal Services, Local Services and [Earned] Income Taxes.-- 3 (a) A [person, public employe] bureau, political subdivision or 4 private agency designated by a governing body of a political 5 subdivision or a tax collection district to collect and 6 administer [a] per capita, occupation[,] or occupational 7 privilege, emergency and municipal services, local services 8 taxes under Chapter 3 or [earned income tax] income taxes under 9 Chapter 5 may impose and collect the reasonable costs incurred 10 to provide notices of delinquency or to implement similar 11 procedures utilized to collect delinquent taxes from a taxpayer 12 as approved by the governing body of the political subdivision 13 or the tax collection committee. Reasonable costs collected may 14 be retained by the [person, public employe or private agency 15 designated to collect the tax as agreed to by the governing body 16 of the political subdivision] tax collector under Chapter 3 or 17 the tax officer under Chapter 5. An itemized accounting of all 18 costs collected shall be remitted to the political subdivision 19 or the tax collection committee on an annual basis. 20 (b) Costs related to the collection of unpaid per capita, 21 occupation [or], occupational privilege, emergency and municipal 22 services or local services taxes may only be assessed, levied 23 and collected for five years from the last day of the calendar 24 year in which the tax was due. 25 (c) A delinquent taxpayer may not bring an action for 26 reimbursement, refund or elimination of reasonable costs of 27 collection assessed or imposed prior to the effective date of 28 this section. Additional costs may not be assessed on delinquent 29 taxes collected prior to the effective date of this section. 30 Section 32. Section 22.2 of the act, added November 30, 2004 20070S1063B2186 - 131 -
1 (P.L.1520, No.192), is renumbered and amended to read: 2 Section [22.2] 708. Clarification of Existing Law.--The 3 addition of section [22.1 of this act] 707 is intended as a 4 clarification of existing law and is not intended to: 5 (1) establish new rights or enlarge existing rights of 6 political subdivisions or employes or agents of political 7 subdivisions; or 8 (2) establish new obligations or enlarge existing 9 obligations of taxpayers. 10 Section 33. Section 22.3 of the act, added November 30, 2004 11 (P.L.1520, No.192), is repealed: 12 [Section 22.3. Legal Representation.--When bringing a suit 13 under any provision of this act, the taxing district, officer, 14 person, public employe or private agency designated by the 15 taxing district shall be represented by an attorney.] 16 Section 34. Section 22.6 of the act, added June 21, 2007 17 (P.L.13, No.7), is repealed: 18 [Section 22.6. Restricted Use.--(a) Any municipality 19 deriving funds from the local services tax may only use the 20 funds for: 21 (1) Emergency services, which shall include emergency 22 medical services, police services and/or fire services. 23 (2) Road construction and/or maintenance. 24 (3) Reduction of property taxes. 25 (4) Property tax relief through implementation of a 26 homestead and farmstead exclusion in accordance with 53 Pa.C.S. 27 Ch. 85 Subch. F (relating to homestead property exclusion). 28 (a.1) A municipality shall use no less than twenty-five 29 percent of the funds derived from the local services tax for 30 emergency services. 20070S1063B2186 - 132 -
1 (b) In the event that a municipality decides to implement a 2 homestead and farmstead exclusion for purposes of providing 3 property tax relief in accordance with subsection (a)(4), the 4 following shall apply: 5 (1) The decision to provide a homestead and farmstead 6 exclusion shall be made, by ordinance, prior to December 1, with 7 the homestead and farmstead exclusion to take effect for the 8 fiscal year beginning the first day of January following 9 adoption of the ordinance. Upon adopting an ordinance in 10 accordance with this paragraph, a municipality shall, by first 11 class mail, notify the assessor, as defined in 53 Pa.C.S. § 8582 12 (relating to definitions), of its decision to provide a 13 homestead and farmstead exclusion. 14 (2) The assessor shall provide a municipality that will be 15 imposing a homestead and farmstead exclusion in accordance with 16 subsection (a)(4) with a certified report, as provided in 53 17 Pa.C.S. § 8584(i) (relating to administration and procedure), 18 listing information regarding homestead and farmstead properties 19 in the municipality as determined pursuant to applications filed 20 with the assessor in connection with this or any other law under 21 which a homestead or farmstead exclusion has been adopted. In 22 the year in which an ordinance is adopted in accordance with 23 paragraph (1), the assessor shall provide the certified report 24 after being notified by the municipality of its decision to 25 provide a homestead and farmstead exclusion. In each succeeding 26 year, the assessor shall provide the certified report by 27 December 1 or at the same time the tax duplicate is certified to 28 the municipality, whichever occurs first. Any duty placed on an 29 assessor in accordance with this paragraph shall be in addition 30 to those established in 53 Pa.C.S. Ch. 85 Subch. F and the act 20070S1063B2186 - 133 -
1 of June 27, 2006 (1st Sp.Sess. P.L.1873, No.1), known as the 2 "Taxpayer Relief Act." 3 (3) Only homestead or farmstead properties identified in the 4 certified report of the assessor obtained in any year shall be 5 eligible to receive the exclusion for the next fiscal year. 6 (4) In the year in which a municipality adopts the ordinance 7 evidencing its decision to implement a homestead and farmstead 8 exclusion, the municipality shall notify by first class mail the 9 owner of each parcel of residential property within the 10 municipality which is not approved as a homestead or farmstead 11 property or for which the approval is due to expire of the 12 following: 13 (i) That the homestead and farmstead exclusion program is to 14 be implemented to provide property tax relief as authorized by 15 subsection (a)(4), beginning in the next fiscal year. 16 (ii) That only properties currently identified in the 17 certified report of the assessor as having been approved in 18 whole or in part as homestead or farmstead properties shall be 19 entitled to an exclusion in the next fiscal year. 20 (iii) That owners of properties that have not been approved 21 by the assessor as homestead or farmstead properties may file an 22 application in accordance with 53 Pa.C.S. § 8584(a) by the 23 annual application deadline of March 1 in order to qualify for 24 the program in the year following the next fiscal year. 25 (5) The one-time notice required by paragraph (4) may be 26 combined and made together with the annual notice required by 27 paragraph (7) or with an annual notice by a coterminous 28 political subdivision that has implemented a homestead and 29 farmstead exclusion. 30 (6) In the year in which the initial decision to provide a 20070S1063B2186 - 134 -
1 homestead and farmstead exclusion is made and in each succeeding
2 year, a municipality shall, by resolution, fix the dollar amount
3 that is to be excluded from the assessed value of each homestead
4 and farmstead property for the next fiscal year, consistent with
5 53 Pa.C.S. §§ 8583 (relating to exclusion for homestead
6 property) and 8586 (relating to limitations). This determination
7 of the amount of the homestead and farmstead exclusion shall be
8 made, after receipt of the tax duplicate and the certified
9 report from the assessor, at the time the governing body of a
10 municipality determines the municipal budget and estimates
11 revenues to be derived from the local services tax for the next
12 fiscal year.
13 (7) Each year after the year in which the municipality
14 implements a homestead and farmstead exclusion and no later than
15 one hundred twenty days prior to the application deadline, the
16 municipality shall give notice of the existence of the
17 municipality's homestead and farmstead exclusion program; the
18 need to file an application in accordance with 53 Pa.C.S. §
19 8584(a) in order to qualify for the program; and the application
20 deadline, which, notwithstanding 53 Pa.C.S. § 8584(b), shall be
21 December 15. This annual notice, which shall be given by first
22 class mail, need only be sent to the owner of each parcel of
23 residential property in the municipality which is not approved
24 as homestead or farmstead property or for which the approval is
25 due to expire.
26 (c) For purposes of this section, the term "municipality"
27 does not include a school district.]
28 Section 35. The act is amended by adding a chapter heading
29 to read:
30 CHAPTER 9
20070S1063B2186 - 135 -
1 MISCELLANEOUS PROVISIONS 2 Section 36. Section 23 of the act is renumbered and amended 3 to read: 4 Section [23] 901. Repeals.--(a) (1) The act of June 25, 5 1947 (P.L.1145), entitled, as amended, "An act empowering cities 6 of the second class, cities of the second class A, cities of the 7 third class, boroughs, towns, townships of the first class, 8 townships of the second class, school districts of the second 9 class, school districts of the third class and school districts 10 of the fourth class to levy, assess and collect or to provide 11 for the levying, assessment and collection of certain additional 12 taxes subject to maximum limitations for general revenue 13 purposes; authorizing the establishment of bureaus and the 14 appointment and compensation of officers and employes to assess 15 and collect such taxes; and permitting penalties to be imposed 16 and enforced; providing an appeal from the ordinance or 17 resolution levying such taxes to the court of quarter sessions 18 and to the Supreme Court and Superior Court," is repealed. 19 (2) All other acts and parts of acts are repealed in so 20 far as they are inconsistent herewith. 21 (b) The following acts and parts of acts are repealed to the 22 extent specified: 23 (1) Section 224 of the act of April 9, 1929 (P.L.177, 24 No.175), known as The Administrative Code of 1929, insofar as 25 it is inconsistent with this act. 26 (2) The act of August 24, 1961 (P.L.1135, No.508), 27 referred to as the First Class A School District Earned 28 Income Tax Act, insofar as it is inconsistent with this act. 29 (3) Sections 322, 326, 351 and 5004.1 of the act of June 30 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as the 20070S1063B2186 - 136 -
1 Taxpayer Relief Act, insofar as it is inconsistent with this 2 act. 3 Section 37. Any ordinance or resolution providing for the 4 levying, assessment or collection of a tax on individuals for 5 the privilege of engaging in an occupation which has been 6 enacted by a political subdivision prior to December 1, 2004, 7 shall continue in full force and effect, without reenactment, as 8 if such tax had been levied, assessed or collected as a local 9 services tax under section 301.1(f)(9) of the act. All 10 references in any ordinance or resolution to a tax on the 11 privilege of engaging in an occupation shall be deemed to be a 12 reference to a local services tax for the purposes of the act. 13 Section 38. All emergency and municipal services taxes 14 levied for the calendar year beginning on January 1, 2007, shall 15 remain in effect for the calendar year beginning on January 1, 16 2007, and ending December 31, 2007, and are not otherwise 17 altered. 18 Section 39. This act shall apply as follows: 19 (1) The following provisions shall not apply to an 20 Article XIII tax officer with respect to income taxes levied 21 before January 1, 2012: 22 (i) The amendment of section 10 of the act. 23 (ii) The repeal of section 11 of the act. 24 (2) The repeal of divisions (II), (III), (IV), (V), 25 (VI), (VII), (VIII) and (IX) of section 13 of the act shall 26 not apply to income taxes levied and collected prior to 27 January 1, 2012. 28 (3) Except as set forth in paragraph (4) and sections 29 508 and 515 of the act, the addition of Chapter 5 of the act 30 shall apply to income taxes levied and collected after 20070S1063B2186 - 137 -
1 December 31, 2011. 2 (4) The addition of section 511 of the act shall apply 3 to the official register released June 15, 2008, and each 4 year thereafter. 5 Section 40. This act shall take effect as follows: 6 (1) The following provisions shall take effect January 7 1, 2012: 8 (i) The amendment of section 10 of the act. 9 (ii) The repeal of section 11 of the act. 10 (2) The amendment of section 13 of the act shall take 11 effect June 30, 2012. 12 (3) The remainder of this act shall take effect 13 immediately. H29L53DMS/20070S1063B2186 - 138 -