PRINTER'S NO. 671
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
671
Session of
2023
INTRODUCED BY FARRY, LAUGHLIN, PENNYCUICK AND MARTIN,
APRIL 28, 2023
REFERRED TO FINANCE, APRIL 28, 2023
AN ACT
Amending the act of December 31, 1965 (P.L.1257, No.511),
entitled "An act empowering cities of the second class,
cities of the second class A, cities of the third class,
boroughs, towns, townships of the first class, townships of
the second class, school districts of the second class,
school districts of the third class and school districts of
the fourth class including independent school districts, to
levy, assess, collect or to provide for the levying,
assessment and collection of certain taxes subject to maximum
limitations for general revenue purposes; authorizing the
establishment of bureaus and the appointment and compensation
of officers, agencies and employes to assess and collect such
taxes; providing for joint collection of certain taxes,
prescribing certain definitions and other provisions for
taxes levied and assessed upon earned income, providing for
annual audits and for collection of delinquent taxes, and
permitting and requiring penalties to be imposed and
enforced, including penalties for disclosure of confidential
information, providing an appeal from the ordinance or
resolution levying such taxes to the court of quarter
sessions and to the Supreme Court and Superior Court,"
further providing for title of act; providing for local taxes
in cities of the first class, for prohibition of tax on
certain individuals and for reimbursement of taxes; and
making repeals.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The title of the act of December 31, 1965
(P.L.1257, No.511), known as The Local Tax Enabling Act, is
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
amended to read:
AN ACT
Empowering cities of the first class, second class, cities of
the second class A, cities of the third class, boroughs,
towns, townships of the first class, townships of the second
class, school districts of the second class, school districts
of the third class and school districts of the fourth class
including independent school districts, to levy, assess,
collect or to provide for the levying, assessment and
collection of certain taxes subject to maximum limitations
for general revenue purposes; authorizing the establishment
of bureaus and the appointment and compensation of officers,
agencies and employes to assess and collect such taxes;
providing for joint collection of certain taxes, prescribing
certain definitions and other provisions for taxes levied and
assessed upon earned income, providing for annual audits and
for collection of delinquent taxes, and permitting and
requiring penalties to be imposed and enforced, including
penalties for disclosure of confidential information,
providing an appeal from the ordinance or resolution levying
such taxes to the court of quarter sessions and to the
Supreme Court and Superior Court.
Section 2. The act is amended by adding a chapter to read:
CHAPTER 6
LOCAL TAXES IN CITIES OF THE FIRST CLASS
Section 601. Authority to levy taxes.
(a) General rule.--The council of a city of the first class
shall have the authority, by ordinance, for general revenue
purposes, to levy, assess and collect taxes or provide for the
levying, assessment and collection of taxes on persons,
20230SB0671PN0671 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
transactions, occupations, privileges, subjects and personal
property within the limits of a city of the first class, as it
shall determine, except that the council shall not have the
authority to levy, assess and collect a tax or provide for the
levying, assessment and collection of a tax on a privilege,
transaction, subject or occupation, or on personal property,
which is or may become subject to a State tax or license fee.
If, subsequent to the passage of an ordinance under the
authority of this chapter, the General Assembly enacts a tax or
license fee on a privilege, transaction, subject or occupation,
or on personal property taxed by a city of the first class under
this chapter, the act imposing the State tax or license fee
shall automatically vacate the city ordinance passed under the
authority of this chapter as to all taxes accruing subsequent to
the effective date of the act imposing the State tax or license
fee. It is the intention of this section to confer upon cities
of the first class the power to levy, assess and collect taxes
upon any and all subjects of taxation which the Commonwealth has
power to tax but which it does not now tax or license, subject
only to this section, that any tax upon a subject which the
Commonwealth may tax or license shall automatically terminate
upon the effective date of the State act imposing the new tax or
license fee.
(b) Prohibition of tax on salaries, wages, commissions or
other compensation on certain individuals.--
(1) A city of the first class may not impose a tax on
salaries, wages, commissions or other compensation on a
nonresident individual who is employed by an employer whose
place of business is located in a city of the first class and
performs all employment duties or services outside of the
20230SB0671PN0671 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
city of the first class.
(2) If a nonresident individual performs a portion of
the individual's employment duties or services outside of the
city of the first class, the city of the first class may only
impose a tax on salaries, wages, commissions or other
compensation on that portion of salaries, wages, commissions
or other compensation attributable to duties performed by the
individual within the city of the first class.
(3) For purposes of this subsection, an employment duty
or service is deemed to be performed where the employee is
physically located, notwithstanding any electronic device,
computer network or other technology that connects the
employee to a person or premises located in a city of the
first class.
(c) Duties.--
(1) The State Treasurer or other appropriate State
official shall, at the time of payment of the salary, wage or
other compensation to an officer or employee of the
Commonwealth, with the exception of elected officials,
domiciled or rendering services within a city of the first
class, deduct any tax imposed by the city on the salary, wage
or other compensation paid by the Commonwealth to the officer
or employee.
(2) The State Treasurer or other appropriate State
official shall, on or before the last day of April, July,
October and January of each year, make a return on a form
furnished by or obtainable from the revenue commissioner of
the city and remit to the revenue commissioner the amount of
tax so deducted for the three-month period ending on the last
day of the month preceding.
20230SB0671PN0671 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Section 602. Creation of offices necessary for the collection
of taxes.
A city of the first class is authorized to provide, by
ordinance, for the creation of bureaus or the appointment and
compensation of officers, clerks, collectors and other
assistants and employees, either under existing departments or
otherwise, as may be deemed necessary for the assessment and
collection of taxes imposed under the authority of this chapter.
Section 603. Penalties and enforcement of nonpayment of taxes.
The council of a city of the first class shall have the power
to prescribe and enforce penalties for the nonpayment, within
the time fixed for their payment, of taxes imposed under the
authority of this chapter and for the violation of the
provisions of ordinances passed under the authority of this
chapter.
Section 604. Reimbursement.
(a) Applicability.--Notwithstanding any other provision of
law or this act, this section shall only apply to a taxpayer who
is a resident of this Commonwealth and not a resident of a city
of the first class but who is subject to the tax on salaries,
wages, commissions or other compensation imposed by a city of
the first class under this chapter.
(b) Employer duty.--Each employer of a taxpayer shall report
on or before the last day of April, July, October and January of
each year to a city of the first class all of the following:
(1) The amount of tax on salaries, wages, commissions or
other compensation under subsection (a) imposed by the school
district in which the taxpayer resides.
(2) The amount of tax on salaries, wages, commissions or
other compensation under subsection (a) imposed by the
20230SB0671PN0671 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
municipality in which the taxpayer resides.
(c) School districts.--
(1) Notwithstanding any other provision of law or this
act, for tax years beginning after December 31, 2023, payment
of a tax on salaries, wages, commissions or other
compensation to a city of the first class shall be credited
by the school district of the taxpayer's residence at an
amount no greater than the tax on salaries, wages,
commissions or other compensation imposed by the school
district in which the taxpayer resides.
(2) In order to facilitate the prompt implementation of
this section, the Department of Education shall, in
consultation with the Department of Community and Economic
Development, promulgate temporary regulations to calculate
the amount equal to the aggregate amount of the tax credited
under paragraph (1) which is due to each school district
qualifying under this subsection. The temporary regulations
shall expire no later than two years following the
publication of the temporary regulations. The temporary
regulations shall not be subject to:
(i) Section 612 of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of
1929.
(ii) Sections 201, 202, 203, 204 and 205 of the act
of July 31, 1968 (P.L.769, No.240), referred to as the
Commonwealth Documents Law.
(iii) Sections 204(b) and 301(10) of the act of
October 15, 1980 (P.L.950, No.164), known as the
Commonwealth Attorneys Act.
(iv) The act of June 25, 1982 (P.L.633, No.181),
20230SB0671PN0671 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
known as the Regulatory Review Act.
(3) The Department of Education shall certify the amount
calculated pursuant to the regulations under paragraph (2) to
the city of the first class. The amount certified shall,
within 30 days of receipt of the certification, be paid by
the city of the first class to the school district of
residence of each taxpayer.
(d) Municipalities.--
(1) Notwithstanding any other provision of law or this
act, for tax years beginning after December 31, 2023, payment
of a tax on salaries, wages, commissions or other
compensation to a city of the first class shall be credited
by the municipality of the taxpayer's residence at an amount
no greater than the tax on salaries, wages, commissions or
other compensation imposed by the municipality in which the
taxpayer resides.
(2) In order to facilitate the prompt implementation of
this section, the Department of Community and Economic
Development shall, in consultation with the Department of
Education, promulgate temporary regulations to calculate the
amount equal to the aggregate amount of the tax credited
under paragraph (1) which is due to each municipality
qualifying under this subsection. The temporary regulations
shall expire no later than two years following the
publication of the temporary regulations. The temporary
regulations shall not be subject to:
(i) Section 612 of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of
1929.
(ii) Sections 201, 202, 203, 204 and 205 of the act
20230SB0671PN0671 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
of July 31, 1968 (P.L.769, No.240), referred to as the
Commonwealth Documents Law.
(iii) Sections 204(b) and 301(10) of the act of
October 15, 1980 (P.L.950, No.164), known as the
Commonwealth Attorneys Act.
(iv) The act of June 25, 1982 (P.L.633, No.181),
known as the Regulatory Review Act.
(3) The Department of Community and Economic Development
shall certify the amount calculated pursuant to the
regulations under paragraph (2) to the city of the first
class. The amount certified shall, within 30 days of receipt
of the certification, be paid by the city of the first class
to the municipality of residence of each taxpayer.
Section 3. Repeals are as follows:
(1) The General Assembly declares that the repeal under
paragraph (2) is necessary to effectuate the addition of
Chapter 6 of the act.
(2) The act of August 5, 1932 (Sp.Sess., P.L.45, No.45),
referred to as the Sterling Act, is repealed.
(3) The General Assembly declares that the repeal under
paragraph (4) is necessary to effectuate the addition of
Chapter 6 of the act.
(4) Section 324 of the act of June 27, 2006 (1st
Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act,
is repealed.
Section 4. The addition of Chapter 6 of the act is a
continuation of the act of August 5, 1932 (Sp.Sess., P.L.45,
No.45), referred to as the Sterling Act. The following apply:
(1) Except as otherwise provided in Chapter 6 of the
act, all activities initiated under the Sterling Act shall
20230SB0671PN0671 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
continue and remain in full force and effect and may be
completed under Chapter 6 of the act. Orders, regulations,
rules and decisions which were made under the Sterling Act
and which are in effect on the effective date of Chapter 6 of
the act shall remain in full force and effect until revoked,
vacated or modified under Chapter 6 of the act. Contracts,
obligations and collective bargaining agreements entered into
under the Sterling Act are not affected nor impaired by the
repeal of the Sterling Act.
(2) Except as provided in paragraph (3), any difference
in language between Chapter 6 of the act and the Sterling Act
is intended only to conform to the style of the act and is
not intended to change or affect the legislative intent,
judicial construction or administration and implementation of
the Sterling Act.
(3) Paragraph (2) does not apply to the addition of
section 601(b) or 604 of the act.
Section 5. A reference in statute or regulation to the act
of August 5, 1932 (Sp.Sess., P.L.45, No.45), referred to as the
Sterling Act, shall be deemed a reference to Chapter 6 of the
act.
Section 6. This act shall take effect as follows:
(1) This section shall take effective immediately.
(2) The remainder of this act shall take effect in 180
days or January 1, 2024, whichever is later.
20230SB0671PN0671 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25