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Pennsylvania House of Representatives
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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2013 - 2014 Regular Session


Posted: April 8, 2013 11:12 AM
From: Representative Jim Christiana
To: All House members
Subject: Co Sponsorship: CHRISTIANA - Mercantile/Business Privilege Tax Reform
In July of 2008, the General Assembly amended the Local Tax Enabling Act to allow political subdivisions formed via a merger of one or more existing political subdivisions on or after August 1, 2008 to continue a levy a mercantile or business privilege tax if it was levied by one or more of the political subdivisions participating in the merger. When this language was added to the Local Tax Enabling Act, a revenue neutral provision was included which limited the political subdivision from collecting any funds in excess of the amount generated in the last fiscal year the tax was levied before the merger.

This revenue neutral provision significantly handicaps our merging political subdivisions by restricting their ability to generate revenues from a tax that is lawfully imposed. In the near future, I will be introducing legislation that will limit the applicability of the revenue neutral provision to the first year following the merger. After the first year, my legislation will allow political subdivision to tap into the revenues generated from the mercantile/business privilege tax. The tax rate will be locked in at the revenue neutral rate but if the rate generates more revenues, the political subdivision will be permitted to collect those revenues.

I believe my legislation is necessary to allow political subdivisions to realize the full benefit of economic growth in their regions.

If you would like to join me in sponsoring this bill, please contact Josh Konecheck at jkonecheck@pahousegop.com .

Introduced as HB1172