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House of Representatives
Session of 2013 - 2014 Regular Session


Posted: January 13, 2013 03:52 PM
From: Representative Scott A. Petri
To: All House members
Subject: Occupation Tax Assessment - Former House Bill 411 (2007-2008)
I plan to reintroduce legislation which would amend the “Local Tax Enabling Act,” Act of December 31, 1965, to give additional taxpayers the opportunity for relief from the occupation assessment tax.

By almost any standard the occupation assessment tax is unfair and inequitable. This tax is levied based on the value of the taxpayer’s occupation, not the income derived from that occupation. Current law authorizes a referendum where citizens could vote on whether to abolish the occupation tax and obtain replacement revenue from a higher earned income tax.

While this option has enjoyed a reasonable degree of success, taxpayers in many other taxing districts have not had the opportunity to vote on the elimination of the occupation assessment tax. Under my proposed legislation taxing districts that still impose the occupation assessment tax on July 1, 2011 would be required to offer a referendum on the elimination of this tax to their taxpayers in the November 2013 municipal election. As already provided under current law, the increase in the local earned income tax (for replacement revenue) would be stated in the ballot question.

This draft would also change the basis to be used to calculate replacement revenue. Under current law, replacement revenue is based on calendar year ending December 31, 2001 for municipalities and the fiscal year ending 2002 for school districts. With each passing year it becomes less likely that taxing districts will receive full replacement revenue. My legislation addresses this issue by using an average of the two immediately preceding years for the calculation of replacement revenue. Under this proposal, taxing districts will be using more up to date figures. However, the two year average will diminish the impact of a sharp one year increase in occupation assessment tax revenue.

If you have any questions, or if you would like a copy of the bill, please contact Lea Farrell at 787-9033 or lfarrell@pahousegop.com. Thank you for your consideration of this matter.

Introduced as HB634