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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session


Posted: January 15, 2013 12:41 PM
From: Senator Jim Ferlo
To: All Senate members
Subject: Pittsburgh Payroll Preparation Tax Reform
In the near future I plan to introduce an amendment to the Local Tax Enabling Act (An act of Dec. 31, 1965, P.L. 1257, No. 511) that will allow the City of Pittsburgh to reform how it collects its payroll preparation tax (PPT). The bill will reduce the rate of the PPT that the City can impose on for-profit companies to .5%, and permit the City to impose a .4% PPT on charitable organizations that have 250 or more employees.

Because of the growth of non-profits into major centers of property ownership, and their ever-increasing percentage of urban employment, we need to address how these corporations can fairly participate in the tax base of Pittsburgh City Government. It is unsustainable and unreasonable to continue treating the expansion of these large non-profits as if they are unable to pay their fair share for the upkeep of basic city services and infrastructure.

Currently, a few non-profits do participate in a payment-in-lieu-of-taxes program, or PILOT, but too few of them have voluntarily participated, and the level of involvement has been inequitable.

The reduction in the rate for the City’s for-profit community would amount to more than a $5 million tax break while the imposition of the PPT on the non-profit community at the lower rate would raise between $10 million and $15 million in new revenue. Non-profit employers with over 250 employees account for more than 70% of the total employment in the non-profit sector in the City. Non-profits employ nearly 25% of the workforce within the City, well above Pennsylvania’s 11% average.

Introduced as SB1127