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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: January 10, 2019 11:17 AM
From: Senator Patrick M. Browne
To: All Senate members
Subject: Further Consolidation of Local Tax Collection
 
In the near future, I plan on reintroducing legislation that was introduced last session as Senate Bill 653, to further consolidate the collection of local, non-real estate taxes, at the county regional level. I plan to introduce the version of Senate Bill 653 that was passed by the Senate, Printer's Number 1660.

With the establishment of regional tax collection districts (TCDs) under Act 32, the number of taxing districts was reduced to 69, and the number of tax collectors was reduced to fewer than 20. Further, according to the Legislative Budget and Finance Committee (LBFC), an estimated $173 million in additional earned income tax collections annually can be attributed to Act 32, or an 8.6 percent increase in collections over the average annual collections for the three-year period prior to implementation of Act 32. The LBFC also noted in its impact report of Act 32 that of the wide range of associations and organizations representing employers, municipalities, providers of payroll and tax services contacted, all indicated that the EIT collection process is operating relatively smoothly and that Act 32 has been successful in simplifying and improving EIT collections and many mentioned they would like to see the consolidation of the collection of property, local services, and business privilege taxes.

My legislation would further extend the consolidation of the collection of all of the other local non-real estate taxes imposed under the Local Tax Enabling Act (LTEA) at the county regional level using the mechanics created under Act 32. This legislation would provide an increased level of stability and uniformity to our local tax collection process.

Cosponsors of Senate Bill 653 of last session included: Senators BOSCOLA, FOLMER, MCGARRIGLE, BARTOLOTTA, SCAVELLO, REGAN, EICHELBERGER, WILLIAMS, LAUGHLIN, MARTIN, WAGNER and SCHWANK. Senate Bill 653, PN 1660 passed the Senate on April 18, 2018, by a vote of 39-10.

Senate Amendments to Senate Bill 653 included:
  • Provided for an opt out from consolidated collection under the bill for mercantile or business privilege tax (BPT) if a political subdivision adopts a resolution to retain its tax collection authority over a mercantile or business privilege tax not less than 90 days prior to the effective date of January 1, 2020.
  • Excluded payroll prep tax (PPT) from consolidated collection.
  • Provided that appeals are to be made to the Tax Collection Committee (TCC) Board of Appeals instead of the taxing jurisdiction for the following:
    • Any tax provided for under this act, except a tax upon the transfer or real property or an interest in real property (this captures appeals for all Act 511 taxes, including BPT)
    • A tax levied on payroll amounts generated as a result of business activity as authorized by this or any other act (this captures appeals for PPT)
  • Provided that, when an appeal is filed to the TCC, a copy of the appeal shall be concurrently filed with the taxing jurisdiction named in the appeal.
  • Removed language contained in Senate Bill 653 that provided that a contingent fee audit may not be conducted in the collection of delinquent taxes.
  • Changed effective date of the bill to January 1, 2020 (from January 1, 2019), to allow taxing jurisdictions time to prepare for the transition to consolidated collection and the appeals process to the TCC.




Introduced as SB636