PRINTER'S NO. 881
No. 792 Session of 2001
INTRODUCED BY GERLACH, HELFRICK, CONTI, M. WHITE, WOZNIAK,
MOWERY, KITCHEN, WAUGH AND CORMAN, APRIL 9, 2001
REFERRED TO FINANCE, APRIL 9, 2001
AN ACT
1 Authorizing counties to impose sales, use, occupancy, personal
2 income or earned income and net profits taxes; empowering
3 municipalities and school districts to require county sales
4 and use taxes; and providing for the powers and duties of the
5 Department of Community and Economic Development, the
6 Department of Revenue and the State Treasurer.
7 TABLE OF CONTENTS
8 Chapter 1. General Provisions
9 Section 101. Short title.
10 Section 102. Definitions.
11 Section 103. Scope and limitations.
12 Section 104. Preemption.
13 Section 105. Home rule counties.
14 Chapter 3. Subjects of Taxation
15 Subchapter A. Tax Authorization
16 Section 301. General tax authorization.
17 Section 302. Continuity of tax.
18 Section 303. Election to participate under act.
19 Section 304. Public referendum requirements for increasing
1 property taxes previously reduced.
2 Section 305. Local tax study commission.
3 Subchapter B. County Sales and Use Tax
4 Section 311. Construction.
5 Section 312. Imposition.
6 Section 313. Situs.
7 Section 314. Licenses.
8 Section 315. Rules and regulations; collection costs.
9 Section 316. Procedure and administration.
10 Section 317. County sales and use tax funds.
11 Section 318. Disbursements.
12 Section 319. Adoption of municipal resolutions and school
13 district petitions.
14 Section 320. Qualified municipalities and school districts;
15 municipal and school district sales and use
16 tax initiative.
17 Subchapter C. Personal Income Tax
18 Section 321. Construction.
19 Section 322. Local personal income tax.
20 Section 323. Collections.
21 Section 324. Rules and regulations.
22 Section 325. Procedure and administration.
23 Subchapter D. Earned Income and Net Profits Tax
24 Section 331. Earned income and net profits tax.
25 Section 332. Collections.
26 Section 333. Rules and regulations.
27 Section 334. Procedure and administration.
28 Subchapters E through I (Reserved)
29 Chapter 5. Credits and Exemptions
30 Section 501. Credits.
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1 Section 502. Low-income tax provisions.
2 Section 503. Regulations.
3 Chapter 7. Disposition of Tax Revenues
4 Section 701. Sales tax revenues.
5 Section 702. Income tax revenues.
6 Section 703. Revenue limitation exceptions.
7 Section 704. Methods of reducing real property tax.
8 Chapter 9. Register for Certain Taxes
9 Section 901. Definitions.
10 Section 902. Register for taxes under this act.
11 Section 903. Information for register.
12 Section 904. Availability and effective period of register.
13 Section 905. Effect of nonfiling.
14 Section 906. Effect of chapter on liability of taxpayer.
15 Chapter 15. Miscellaneous Provisions
16 Section 1501. Effective date.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 CHAPTER 1
20 GENERAL PROVISIONS
21 Section 101. Short title.
22 This act shall be known and may be cited as the Optional
23 County Tax Enabling Act.
24 Section 102. Definitions.
25 The following words and phrases when used in this act shall
26 have the meanings given to them in this section unless the
27 context clearly indicates otherwise:
28 "Association." As defined in section 301 of the act of March
29 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
30 "Board of county commissioners." Includes the successor in
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1 function to the board of county commissioners in a county which
2 has adopted a home rule charter under the former act of April
3 13, 1972 (P.L.184, No.62), known as the Home Rule Charter and
4 Optional Plans Law, or under 53 Pa.C.S. Pt. III Subpt. E
5 (relating to home rule and optional plan government), but does
6 not include the city council of a city of the first class.
7 "Budgeted revenue." The revenue from taxes actually levied
8 and assessed by a local government unit. The term does not
9 include revenue from:
10 (1) Delinquent taxes.
11 (2) Payments in lieu of taxes.
12 (3) The real estate transfer tax.
13 (4) The Public Utility Realty Tax, commonly known as
14 PURTA.
15 (5) Interest or dividend earnings.
16 (6) Federal or State grants, contracts or
17 appropriations.
18 (7) Income generated from operations.
19 (8) Any other source that is revenue not derived
20 directly from taxes levied and assessed by a local government
21 unit.
22 "Business." As defined in section 301 of the act of March 4,
23 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
24 "Compensation." As defined in section 301 of the act of
25 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
26 1971.
27 "County." A county-level municipality within this
28 Commonwealth, regardless of classification. The term includes a
29 county which has adopted a home rule charter or optional plan of
30 government under the former act of April 13, 1972 (P.L.184,
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1 No.62), known as the Home Rule Charter and Optional Plans Law,
2 or under 53 Pa.C.S. Pt. III Subpt. E (relating to home rule and
3 optional plan government). The term does not include a county of
4 the first class.
5 "Current year." The calendar year or fiscal year for which
6 the tax is levied.
7 "Department." The Department of Revenue of the Commonwealth.
8 "Domicile." As defined in section 13 of the act of December
9 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
10 Act.
11 "Earned income." The classes of income defined as earned
12 income in section 13 of the act of December 31, 1965 (P.L.1257,
13 No.511), known as The Local Tax Enabling Act.
14 "Employer." As defined in section 301 of the act of March 4,
15 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
16 "Governing body." The board of county commissioners,
17 including the successor in function to the board of county
18 commissioners in a county which has adopted a home rule charter
19 under the former act of April 13, 1972 (P.L.184, No.62), known
20 as the Home Rule Charter and Optional Plans Law, or under 53
21 Pa.C.S. Pt. III Subpt. E (relating to home rule and optional
22 plan government), city council, borough council, incorporated
23 town council, board of township commissioners, board of township
24 supervisors, a governing council of a home rule municipality or
25 optional plan municipality, a governing council of any similar
26 general purpose unit of government which may hereafter be
27 created by statute, or a board of school directors of a school
28 district. The term does not include the city council of a city
29 of the first class.
30 "Home rule municipality." A city, borough, incorporated town
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1 or township which has adopted a home rule charter under the
2 former act of April 13, 1972 (P.L.184, No.62), known as the Home
3 Rule Charter and Optional Plans Law, or under 53 Pa.C.S. Pt. III
4 Subpt. E (relating to home rule and optional plan government).
5 "Individual." As defined in section 301 of the act of March
6 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
7 "Inverse per capita income." A factor determined by dividing
8 the integer one by the per capita income of the municipality, as
9 determined by the most recent survey by the Department of
10 Commerce Community and Economic Development.
11 "Local Tax Enabling Act." The act of December 31, 1965
12 (P.L.1257, No.511), known as The Local Tax Enabling Act.
13 "Municipal service tax." A tax upon residents and
14 nonresidents employed within a municipality.
15 "Municipality." A city of the second class, city of the
16 second class A, city of the third class, borough, incorporated
17 town, township of the first class, township of the second class,
18 home rule municipality, optional plan municipality, optional
19 form municipality or similar general purpose unit of government
20 which may hereafter be created by statute, except a city of the
21 first class.
22 "Net profits." The classes of income defined as net profits
23 in section 13 of the act of December 31, 1965 (P.L.1257,
24 No.511), known as The Local Tax Enabling Act.
25 "Nonresident." An individual domiciled outside the county.
26 "Optional form municipality." A city which has adopted an
27 optional form of government under the act of July 15, 1957
28 (P.L.901, No.399), known as the Optional Third Class City
29 Charter Law.
30 "Optional plan municipality." A city, borough, incorporated
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1 town or township which has adopted an optional plan of
2 government under the former act of April 13, 1972 (P.L.184,
3 No.62), known as the Home Rule Charter and Optional Plans Law,
4 or under 53 Pa.C.S. Pt. III Subpt. E (relating to home rule and
5 optional plan government).
6 "Ordinance." Includes a resolution.
7 "Personal income." Income enumerated in section 303 of the
8 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
9 of 1971, as returned to and ascertained by the Department of
10 Revenue, subject, however, to any correction thereof for fraud,
11 evasion or error as finally ascertained by the Commonwealth.
12 "Preceding year." The calendar year or fiscal year before
13 the current year.
14 "Register." The register provided for in Chapter 9.
15 "Relative tax effort." The total tax revenues from all
16 sources of a municipality as reported to the Department of
17 Community and Economic Development, divided by the total tax
18 revenues from all sources from all municipalities in the county.
19 "Resident individual." An individual who is domiciled in a
20 county.
21 "School district." A school district of the first class A,
22 second class, third class or fourth class, including any
23 independent school district.
24 "Statewide average weekly wage." That amount determined
25 annually for each calendar year by the Department of Labor and
26 Industry under section 105.1 of the act of June 2, 1915
27 (P.L.736, No.338), known as the Workers' Compensation Act.
28 "Succeeding year." The calendar year or fiscal year
29 following the current year.
30 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
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1 known as the Tax Reform Code of 1971.
2 "Taxpayer." An individual required under this act to file a
3 tax return or to pay a tax.
4 "Weighted formula." A formula dividing an allocation into
5 thirds, with one-third based on relative population, one-third
6 based on relative tax effort and one-third based on the relative
7 inverse per capita income.
8 Section 103. Scope and limitations.
9 (a) General rule.--It is the intent of this act to confer
10 upon each county the power to levy, assess and collect taxes
11 upon the subjects of taxation set forth in this act.
12 (b) Effect of unconstitutionality.--Notwithstanding any
13 other provisions of the act of May 21, 1943 (P.L.349, No.162),
14 entitled "An act requiring political subdivisions to refund
15 certain taxes, license fees, penalties, fines or moneys paid
16 thereto, and providing procedure for obtaining such refunds," to
17 the contrary, if the tax imposed under the act of June 17, 1913
18 (P.L.507, No.335), referred to as the Intangible Personal
19 Property Tax Law, is held by final judgment of a court of
20 competent jurisdiction to be unconstitutional, a county of the
21 second, second class A or third through eighth class and a city
22 of the first class coterminous with a county of the first class
23 imposing that tax shall refund the moneys collected and due only
24 in the year in which the declaration of unconstitutionality was
25 made. Any taxpayer owing the tax from prior years shall continue
26 to be held liable for the tax.
27 Section 104. Preemption.
28 No act of the General Assembly will vacate or preempt any
29 ordinance adopted under this act providing for the imposition of
30 a tax by a county unless the act of the General Assembly
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1 expressly vacates or preempts the authority to adopt the
2 ordinance.
3 Section 105. Home rule counties.
4 (a) Participation under act.--Except for the case when a
5 governing body of a home rule county elects to adopt the tax
6 authorized under section 312, the governing body of a home rule
7 county which desires to participate under the provisions of this
8 act shall not be subject to the public referendum requirements
9 of section 303(b). The governing body of a home rule county
10 which desires to adopt the tax authorized under section 312
11 shall be subject to the public referendum requirements of
12 section 303(b).
13 (b) Public referendum requirements for increasing property
14 taxes previously reduced.--Any governing body of a home rule
15 county which elects to participate under this act is not subject
16 to the provisions of section 304.
17 (c) Ending participation under act.--The governing body of a
18 home rule county which desires to end participation under the
19 provisions of this act shall not be subject to the public
20 referendum requirements of section 303.
21 (d) Rates of taxation.--A home rule county shall not have
22 the right or authority to fix the rate of taxation for the
23 subjects of taxation authorized under Chapter 3 in excess of the
24 rates fixed in Chapter 3.
25 (e) Disposition of revenues.--Home rule counties which elect
26 to participate under the provisions of this act shall be subject
27 to all the provisions of sections 701(a) and 702(d)(1),
28 including the provision that any increase in revenues between
29 the transition year and the prior year's budgeted revenues not
30 exceed 5% or the annual increase in the Statewide average weekly
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1 wage, whichever is less.
2 CHAPTER 3
3 SUBJECTS OF TAXATION
4 SUBCHAPTER A
5 TAX AUTHORIZATION
6 Section 301. General tax authorization.
7 (a) General rule.--Subject to sections 303 and 304 and
8 except as provided in subsection (b), each county shall have the
9 power and may by ordinance levy, assess and collect or provide
10 for the levying, assessment and collection of such taxes on the
11 subjects specified in this chapter for general revenue purposes
12 as it shall determine on any or all of the subjects of taxation
13 set forth in this act within the geographical limits of the
14 county.
15 (b) Exclusions.--No county which levies a tax authorized by
16 this act shall have any power or authority to levy, assess or
17 collect:
18 (1) A tax based upon a flat rate or on a millage rate on
19 an assessed valuation of a particular trade, occupation or
20 profession, commonly known as an occupation tax.
21 (2) A tax at a set or flat rate upon persons employed
22 within the taxing district, commonly known as an occupational
23 privilege tax.
24 (3) A per capita, poll, residence or similar head tax.
25 (4) The earned income and net profits tax levied under
26 the Local Tax Enabling Act.
27 (5) Any other tax authorized or permitted under the
28 Local Tax Enabling Act except a mercantile or business
29 privilege tax on gross receipts, as modified by paragraph
30 (9).
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1 (6) An earned income tax under the act of August 24,
2 1961 (P.L.1135, No.508), referred to as the First Class A
3 School District Earned Income Tax Act, or under the
4 additional authority in section 652.1(a)(2) of the act of
5 March 10, 1949 (P.L.30, No.14), known as the Public School
6 Code of 1949.
7 (7) Any tax under section 652.1(a)(4) of the Public
8 School Code of 1949 except as it pertains to real estate
9 transfer taxes.
10 (8) The intangible personal property tax under the act
11 of June 17, 1913 (P.L.507, No.335), referred to as the
12 Intangible Personal Property Tax Law.
13 (9) Any mercantile or business privilege tax on gross
14 receipts, as limited by section 533 of the act of December
15 13, 1988 (P.L.1121, No.145), known as the Local Tax Reform
16 Act, after one year from the date of the election to
17 participate under this act pursuant to section 303.
18 (10) Any other tax authorized under the Local Tax
19 Enabling Act as limited by the provisions of this act.
20 (c) Delinquent taxes.--The provisions of subsection (b)
21 shall not apply to collection of delinquent taxes.
22 Section 302. Continuity of tax.
23 Every tax levied under the provisions of this act shall
24 continue in force on a calendar or fiscal year basis, as the
25 case may be, without annual reenactment unless the rate of tax
26 is increased or the tax is subsequently repealed.
27 Section 303. Election to participate under act.
28 (a) General rule.--
29 (1) Any governing body which desires to participate
30 under the provisions of this act shall make that
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1 determination by using the procedures set forth in subsection
2 (b).
3 (2) Any governing body after making an election to
4 participate under this act may, after a period of at least
5 three full calendar years or fiscal years of participation,
6 elect, under the provisions of subsection (b), to levy,
7 assess and collect the taxes prohibited by section 301(b) to
8 the extent otherwise provided by law. If the electorate
9 approves such referendum, the governing body shall lose the
10 authority to continue to levy any tax authorized under this
11 act.
12 (3) If a county does not act as authorized under
13 subsection (b) within five years following the effective date
14 of this act, a referendum on the question of whether a tax
15 study commission shall be appointed in accordance with the
16 terms and conditions of this act may be initiated by electors
17 of the county. A petition containing a proposal for
18 referendum on the question of appointing a tax study
19 commission, signed by electors comprising 2% of the number of
20 electors voting for the office of Governor in the last
21 gubernatorial general election in the county, may be filed
22 with the election officials at least 90 days prior to the
23 next general election.
24 (i) The name and address of the person filing the
25 petition shall be clearly stated on the petition.
26 (ii) The election officials shall, within ten days
27 after filing, review the initiative petition as to the
28 number and qualifications of signers. If the petition
29 appears to be defective, the election officials shall
30 immediately notify the person filing the petition of the
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1 defect.
2 (iii) The initiative petition as submitted to the
3 election officials along with the list of signatories
4 shall be open to public inspection in the office of the
5 election officials.
6 (iv) When the election officials find that the
7 petition as submitted is in proper order, they shall send
8 copies of the initiative petition without signatures
9 thereon to the governing body of the county involved.
10 (v) The procedure for the referendum shall be
11 governed by the act of June 3, 1937 (P.L.1333, No.320),
12 known as the Pennsylvania Election Code.
13 (vi) When the election officials find the initiative
14 petition as submitted by the electors meets the
15 requirements of this act, they shall place the proposal
16 on the ballot in a manner fairly representing the content
17 of the initiative petition for decision by referendum at
18 the proper election.
19 (vii) The election officials shall certify the date
20 for the referendum and shall so notify the governing body
21 of the county at least 30 days prior to such date.
22 (viii) At least 30 days' notice of the referendum
23 shall be given by proclamation of the governing body of
24 the county. A copy of the proclamation shall be posted at
25 each polling place on the day of the election and shall
26 be published once in at least one newspaper of general
27 circulation in the county during the 30-day period prior
28 to the election.
29 (ix) Approval of a referendum shall be by a majority
30 vote of those voting in each county involved.
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1 (x) The election officials shall certify the results
2 of the referendum to the governing body.
3 (b) Public referendum requirements to participate or end
4 participation under act.--Subject to the notice and public
5 hearing requirements of section 316(a), 325(a) or 334, whichever
6 is applicable, a governing body may elect to participate or, in
7 accordance with subsection (a)(2), may elect to end
8 participation under this act by obtaining the approval of the
9 electorate of the affected county in a public referendum at only
10 the November election preceding the calendar year or fiscal year
11 when the taxes will be initially imposed. The referendum
12 question must state the initial rate of the proposed tax, the
13 reason for the tax and the amount of proposed revenue growth, if
14 any, in the fiscal year of transition to the tax system
15 authorized under this act, expressed as a percent increase over
16 the prior year's budgeted revenue. Any increase in revenues
17 between the transition year and the prior year's budgeted
18 revenue shall not exceed 5% or the annual percent change in the
19 Statewide average weekly wage, whichever is less. The governing
20 body must frame the question in clear language that is readily
21 understandable by the layperson. For the purpose of
22 illustration, a referendum question could be framed as follows:
23 Do you favor the imposition of an X% (name of tax) to be
24 used to replace certain existing local taxes, make
25 reductions in real property taxes and provide for a one-
26 time spending increase of X% over the preceding fiscal
27 year?
28 Section 304. Public referendum requirements for increasing
29 property taxes previously reduced.
30 (a) General rule.--Except as provided in subsection (c), a
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1 governing body of a county which elects to participate under
2 this act pursuant to section 303(a) may not increase the rate of
3 real property taxes that were reduced using revenue derived from
4 an income and/or sales tax imposed under this act or any other
5 act by an amount exceeding the annual percent change in the
6 Statewide average weekly wage in the preceding year without
7 first obtaining approval of the electorate of the affected
8 county in a public referendum at the November election
9 immediately preceding the calendar year of the proposed tax
10 increase for entities operating on a calendar year fiscal basis
11 and at the primary election for the calendar year of the
12 proposed tax increase for entities operating on a July to June
13 fiscal basis.
14 (b) Disapproval.--Whenever the electorate fails to approve
15 the proposed referendum question as required under subsection
16 (a) increasing the rates of tax, the governing body shall be
17 limited to the tax rate in effect prior to the referendum.
18 (c) Referendum exceptions.--The provisions of subsection (a)
19 shall not apply to any necessary tax increases in the following
20 cases:
21 (1) To respond to or recover from an emergency or
22 disaster declared pursuant to 35 Pa.C.S. Pt. V (relating to
23 emergency management services), for the duration of the
24 emergency or disaster or for the costs of the recovery from
25 the emergency or disaster.
26 (2) To implement a court order or an administrative
27 decision of a Federal or State agency. In instances where the
28 tax increase is necessary to respond to a court order or an
29 administrative decision of a Federal or State agency
30 requiring a temporary increase in local expenditures, the
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1 rate increase shall be rescinded following fulfillment of the
2 court order or administrative decision.
3 (3) To pay interest and principal on any indebtedness
4 incurred under 53 Pa.C.S. Pt. VII Subpt. B (relating to
5 indebtedness and borrowing). However, in no case may a taxing
6 jurisdiction incur additional debt under this paragraph,
7 except for the refinancing of existing debt, including the
8 payment of costs and expenses related to such refinancing and
9 the establishment or funding of appropriate debt service
10 reserves.
11 (4) Taxes levied under section 607(f) of the act of
12 December 18, 1984 (P.L.1005, No.205), known as the Municipal
13 Pension Plan Funding Standard and Recovery Act, or levied to
14 pay increases in pension fund requirements which are in
15 excess of the annual average increase over the immediately
16 preceding five fiscal years.
17 (5) To increase revenues when actual and projected local
18 tax revenues, including any share of a county sales and use
19 tax, decline from the immediately preceding year but only to
20 the extent of the revenue decline.
21 (6) To respond to conditions that pose a threat of
22 immediate harm or injury to the students, staff or residents
23 of the county, municipality or school district.
24 (7) Special purpose tax levies approved by the
25 electorate.
26 (8) To respond to a Federal or State statute, regulation
27 or order adding to or significantly altering responsibilities
28 and duties or requiring expenditure of county or local funds
29 to the extent not funded by the Federal or State Government.
30 This provision shall apply only to a Federal or State
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1 statute, regulation or order taking effect after the
2 effective date of this act.
3 (d) Court action.--Prior to any tax increase under
4 subsection (c)(1), (4), (5), (6) or (8), approval is required by
5 the court of common pleas in the judicial district in which the
6 governing body is located. The following shall apply to any
7 proceedings instituted under this subsection:
8 (1) The governing body must prove by a preponderance of
9 evidence the necessity for the tax increase.
10 (2) The court may retain continuing jurisdiction in
11 these cases and may, on its own motion or on petition of an
12 interested party, revoke approval for a tax increase.
13 (e) Distressed county.--This section shall not be construed
14 to prohibit any county declared distressed under the act of July
15 10, 1987 (P.L.246, No.47), known as the Municipalities Financial
16 Recovery Act, from petitioning the court of common pleas for a
17 tax increase in accordance with section 123(c) of the
18 Municipalities Financial Recovery Act.
19 (f) Standing.--Any taxpayer or business shall have standing
20 as a party to a proceeding under this section as long as the
21 taxpayer or business resides within or pays real property taxes
22 to the taxing jurisdiction of the governing body instituting the
23 action.
24 Section 305. Local tax study commission.
25 (a) First-year implementation.--Before any county seeks
26 referendum approval for the levy, assessment or collection of
27 any tax under the authority of this act, the governing body may
28 appoint a local tax study commission in accordance with the
29 following provisions:
30 (1) Membership.--The local tax study commission shall
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1 consist of members appointed by the governing body. One
2 member of the local tax study commission may be a member of
3 the governing body, as deemed appropriate by the governing
4 body. No member of the local tax study commission shall be a
5 relative, by blood or marriage, of an official or employee of
6 the county. All members shall be residents of the county. The
7 local tax study commission shall consist of five, seven or
8 nine members. Representatives on a local tax study commission
9 must reasonably reflect the socioeconomic, age and
10 occupational diversity of the county.
11 (2) Staff and expenses.--The governing body shall
12 provide necessary and reasonable staff to support the local
13 tax study commission and shall reimburse the members of the
14 local tax study commission for necessary and reasonable
15 expenses in the discharge of their duties.
16 (3) Contents of study.--The local tax study commission
17 shall study the existing taxes levied, assessed and collected
18 by the county and the effect of any county taxes imposed
19 concurrently with a school district and shall determine if
20 and how the tax policies of the county could be strengthened
21 or made more equitable by adopting for levy, assessment and
22 collection one or a combination of any of the following
23 taxes: local personal income tax, earned income and net
24 profits tax, real estate tax or realty transfer tax at such
25 levels and in such combinations on permissible subjects of
26 taxation as do not exceed the limitations in this act. This
27 study shall include, but not be limited to, consideration of
28 all of the following:
29 (i) Historic rate and revenue provided by taxes
30 currently levied, assessed and collected by the county.
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1 (ii) The percentage of total revenues provided by
2 taxes currently levied, assessed and collected.
3 (iii) The age, income, employment and property use
4 characteristics of the existing tax base.
5 (iv) The projected revenues of any taxes currently
6 levied, assessed and collected.
7 (v) The projected revenues of any taxes referred to
8 in this paragraph not currently levied, assessed and
9 collected by the county.
10 (4) Recommendation.--Within 60 days of its appointment,
11 the local tax study commission shall make a nonbinding
12 recommendation to the governing body of the appropriate tax
13 or combination of taxes, identified in paragraph (3), to be
14 levied, assessed and collected commencing the next fiscal
15 year. Except as provided for in paragraph (5), if the
16 governing body appoints a commission, no tax may be levied,
17 assessed or collected for the next fiscal year until receipt
18 of the recommendation of the local tax study commission. No
19 later than 30 days prior to the commencement of the next
20 fiscal year, the governing body shall accept or reject the
21 recommendation of the local tax study commission or adopt any
22 other appropriate tax or combination of taxes for the
23 municipality, school district or county commencing the next
24 fiscal year as provided by law.
25 (5) Failure to issue recommendation.--If the local tax
26 study commission fails to make a nonbinding recommendation
27 within 60 days of its appointment, the governing body shall
28 discharge the appointed local tax study commission and
29 appoint itself as the local tax study commission. No later
30 than 30 days prior to the commencement of the next fiscal
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1 year, the governing body shall adopt the appropriate tax or
2 combination of taxes for the county commencing the next
3 fiscal year as provided by law.
4 (6) Public distribution of report.--The local tax study
5 commission shall publish or cause to be published, within 30
6 days of making its recommendation, a final report of its
7 activities and recommendations and shall deliver the final
8 report to the secretary of the governing body who shall
9 supply copies to any interested persons upon request.
10 (7) Receipts.--Receipts are required for all
11 reimbursable expenses under paragraph (2).
12 (8) Materials.--All the records, receipts, tapes,
13 minutes of meetings and written discussions of the local tax
14 study commission shall, upon its discharge, be turned over to
15 the chief clerk of the county for permanent safekeeping. The
16 chief clerk shall make such materials available for public
17 inspection at any time during regular business hours.
18 (9) Discharge.--The local tax study commission shall be
19 discharged upon the filing of its final report.
20 (b) Three-year review.--Any county that levies, assesses and
21 collects, or provides for the levy, assessment or collection of,
22 any tax, after having received the recommendations of a local
23 tax study commission, shall continue to levy, assess and collect
24 the same tax or combination of taxes for the next three fiscal
25 years. However, nothing herein shall preclude the governing body
26 from changing or altering the rates of any such tax or
27 combination of taxes if it deems necessary. Before the third
28 fiscal year following county action on the recommendations of a
29 local tax study commission, and every third fiscal year
30 thereafter, the governing body may appoint a local tax study
20010S0792B0881 - 20 -
1 commission in the manner provided in subsection (a). The local
2 tax study commission appointed under this subsection shall be
3 charged with all of the same powers and duties provided for the
4 local tax study commission under subsection (a).
5 SUBCHAPTER B
6 COUNTY SALES AND USE TAX
7 Section 311. Construction.
8 The tax imposed by the governing body of a county under this
9 subchapter shall be in addition to any tax imposed by the
10 Commonwealth under Article II of the Tax Reform Code. Except for
11 the differing situs provisions under section 313, the provisions
12 of Article II of the Tax Reform Code shall apply to the tax.
13 Section 312. Imposition.
14 (a) Sales.--The governing body of a county, except for a
15 county of the second class, may levy and assess upon each
16 separate sale at retail of tangible personal property or
17 services, as defined in Article II of the Tax Reform Code,
18 within the boundaries of the county, a tax on the purchase
19 price. The tax shall be collected by the vendor from the
20 purchaser and shall be paid over to the Commonwealth as provided
21 in this subchapter. The sales tax shall not be paid to the
22 Commonwealth by any person who has paid the tax imposed under
23 Chapter 5 of the act of June 5, 1991 (P.L.9, No.6), known as the
24 Pennsylvania Intergovernmental Cooperation Authority Act for
25 Cities of the First Class, or subdivision (e) of Article XXXI-B
26 of the act of July 28, 1953 (P.L.723, No.230), known as the
27 Second Class County Code, equal to or greater than the tax
28 imposed under this subsection.
29 (b) Use.--In any county, except for a county of the second
30 class, within which the tax authorized in subsection (a) is
20010S0792B0881 - 21 -
1 imposed, there shall be levied, assessed and collected upon the
2 use, within the county, of tangible personal property purchased
3 at retail and on services purchased at retail, as defined in
4 Article II of the Tax Reform Code, a tax on the purchase price.
5 The tax shall be paid over to the Commonwealth by the person who
6 makes the use. The use tax imposed under this subchapter shall
7 not be paid over to the Commonwealth by any person who has paid
8 the tax imposed under:
9 (1) Subsection (a).
10 (2) This subsection to the vendor with respect to the
11 use.
12 (3) Chapter 5 of the Pennsylvania Intergovernmental
13 Cooperation Authority Act for Cities of the First Class,
14 equal to or greater than the tax imposed under either
15 subsection (a) or this subsection.
16 (4) Subdivision (e) of Article XXXI-B of the Second
17 Class County Code equal to or greater than the tax imposed
18 under either subsection (a) or this subsection.
19 (c) Occupancy.--In any county within which a tax authorized
20 by subsection (a) is imposed, there shall be levied, assessed
21 and collected an excise tax on the rent upon every occupancy of
22 a room or rooms in a hotel in the county. The tax shall be
23 collected by the operator or owner from the occupant and paid
24 over to the Commonwealth.
25 (d) Rate and uniformity.--
26 (1) The tax authorized by subsections (a), (b) and (c)
27 shall be imposed at a rate of 1%.
28 (2) The tax imposed by subsections (a), (b) and (c)
29 shall be uniform.
30 (e) Computation.--The tax imposed under this section shall
20010S0792B0881 - 22 -
1 be computed in the manner set forth in section 503(e)(2) of the
2 Pennsylvania Intergovernmental Cooperation Authority Act for
3 Cities of the First Class.
4 (f) Exception.--The optional provisions of subsections (a),
5 (b) and (c) shall be subject to the provisions of section 320.1.
6 Section 313. Situs.
7 (a) General rule.--Except as provided in subsections (b) and
8 (c), the situs of sales at retail or uses, including leases, of
9 motor vehicles, aircraft, motorcraft and utility services shall
10 be determined in the manner specified by section 504 of the act
11 of June 5, 1991 (P.L.9, No.6), known as the Pennsylvania
12 Intergovernmental Cooperation Authority Act for Cities of the
13 First Class, as well as the act of March 4, 1971 (P.L.6, No.2),
14 known as the Tax Reform Code of 1971.
15 (b) Premium cable services.--The sale or use of premium
16 cable service shall be deemed to occur at the service address in
17 the county which is the address where the customer cable
18 connection is located. This subsection shall determine the situs
19 of premium cable service for the purpose of all local sales
20 taxes, including those imposed pursuant to Chapter 5 of the
21 Pennsylvania Intergovernmental Cooperation Authority Act for
22 Cities of the First Class and pursuant to subdivision (e) of
23 Article XXXI-B of the act of July 28, 1953 (P.L.723, No.230),
24 known as the Second Class County Code.
25 (c) Telecommunications service.--The situs of
26 telecommunications service under this act shall be determined in
27 accordance with regulations adopted by the department, which
28 shall be uniform among all counties, and shall be consistent
29 with regulations promulgated under Subdivision (e) of Article
30 XXXI-B of the act of July 28, 1953 (P.L.723, No.230), known as
20010S0792B0881 - 23 -
1 the Second Class County Code, Article II of the Tax Reform Code
2 of 1971 and Chapter 5 of the act of June 5, 1991 (P.L.9, No.6),
3 known as the Pennsylvania Intergovernmental Cooperation
4 Authority Act for Cities of the First Class.
5 Section 314. Licenses.
6 A license for the collection of the tax imposed by this
7 subchapter shall be issued in the same manner as is provided for
8 in section 505 of the act of June 5, 1991 (P.L.9, No.6), known
9 as the Pennsylvania Intergovernmental Cooperation Authority Act
10 for Cities of the First Class. Licensees shall be entitled to
11 the same discount as provided in section 227 of the Tax Reform
12 Code.
13 Section 315. Rules and regulations; collection costs.
14 (a) Regulations.--Rules and regulations shall be applicable
15 to the taxes imposed under section 312 in the same manner as is
16 provided for in section 506(1) and (2) of the act of June 5,
17 1991 (P.L.9, No.6), known as the Pennsylvania Intergovernmental
18 Cooperation Authority Act for Cities of the First Class.
19 (b) Administrative costs.--The department, to cover its
20 costs of administration under this subchapter, shall be entitled
21 to retain a sum equal to the costs of administration. When the
22 annual operating budget for the department is submitted to the
23 General Assembly, the department shall also submit to the
24 chairman and minority chairman of the Appropriations Committee
25 of the Senate and to the chairman and minority chairman of the
26 Appropriations Committee of the House of Representatives a
27 report of the actual sums retained for costs of collection in
28 the preceding fiscal year, together with all supporting details.
29 Section 316. Procedure and administration.
30 (a) Ordinance.--Any county desiring to impose the tax
20010S0792B0881 - 24 -
1 authorized by section 312 shall give at least 60 days' written
2 notice to every municipality and school district located in the
3 county of its intent to impose the tax and shall adopt an
4 ordinance after the expiration of 60 days after the date of such
5 notice. The notice and ordinance shall state the tax rate and
6 refer to this subchapter. The ordinance shall authorize the
7 imposition of all taxes provided for in section 312. Prior to
8 adopting an ordinance imposing the tax authorized by section
9 312, the governing body of the county shall give public notice
10 of its intent to adopt the ordinance in the manner provided by
11 section 4 of the Local Tax Enabling Act and shall conduct at
12 least one public hearing regarding the proposed adoption of the
13 ordinance.
14 (b) Notification to department.--A certified copy of the
15 county ordinance shall be delivered to the department by June 1
16 of the year prior to the effective date thereof. The county
17 ordinance shall become effective on the January 1 following at
18 least seven months after the date of enactment of the county
19 ordinance.
20 (c) Delivery of repeal ordinance.--A certified copy of a
21 repeal ordinance shall be delivered to the department at least
22 120 days prior to the effective date of the repeal.
23 Section 317. County sales and use tax funds.
24 There is hereby created for each county levying the tax under
25 section 312 the (proper name) County Sales and Use Tax Fund. The
26 State Treasurer shall be custodian of the funds which shall be
27 subject to the provisions of law applicable to funds listed in
28 section 302 of the act of April 9, 1929 (P.L.343, No.176), known
29 as The Fiscal Code. Taxes imposed under section 312 shall be
30 received by the department and paid to the State Treasurer and,
20010S0792B0881 - 25 -
1 along with interest and penalties, less any collection costs
2 allowed under this subchapter and any refunds and credits paid,
3 shall be credited to the funds not less frequently than every
4 two weeks. During any period prior to the credit of moneys to
5 the funds, interest earned on moneys received by the department
6 and paid to the State Treasurer under this subchapter shall be
7 deposited into the funds. All moneys in the funds, including,
8 but not limited to, moneys credited to the funds under this
9 section, prior year encumbrances and the interest earned
10 thereon, shall not lapse or be transferred to any other fund,
11 but shall remain in the funds. Pending their disbursement,
12 moneys received on behalf of or deposited into the funds shall
13 be invested or reinvested as are other moneys in the custody of
14 the State Treasurer in the manner provided by law. All earnings
15 received from the investment or reinvestment of the moneys shall
16 be credited to the respective funds. The Auditor General shall
17 periodically audit the records of the department relative to its
18 duties under this section and shall furnish the results of such
19 audit to any county levying the sales and use tax under section
20 312 and to any municipality or school district qualified under
21 section 320.
22 Section 318. Disbursements.
23 (a) General rule.--On or before the tenth day of every
24 month, the State Treasurer shall make the disbursements on
25 behalf of the county imposing the tax out of the moneys which
26 are, as of the last day of the previous month, contained in the
27 respective county sales and use tax fund.
28 (b) Disbursement to counties.--The State Treasurer shall
29 disburse to a county imposing the tax authorized under section
30 312 an amount of money equal to 50% of the tax collected in that
20010S0792B0881 - 26 -
1 county and remitted to the department and deposited in the
2 respective county sales and use tax fund. The county shall
3 deposit the revenue from the respective county sales and use tax
4 fund into the county general fund for disposition as provided
5 under section 701(a).
6 (c) Disbursement to municipalities.--The State Treasurer
7 shall, at the same time, disburse to the municipalities 25% of
8 the tax collected in their respective counties as provided in
9 section 320. Each municipality's portion shall be deposited in
10 the municipal general fund for disposition as provided in
11 section 701(b).
12 (d) Disbursement to school districts.--The State Treasurer
13 shall, at the same time, disburse to the school districts 25% of
14 the tax collected in their respective counties as provided in
15 section 320. Each school district's portion shall be deposited
16 in the school district's general fund for disposition as
17 provided in section 701(b).
18 Section 319. Adoption of municipal resolutions and school
19 district petitions.
20 (a) General rule.--No municipality shall be entitled to a
21 disbursement under section 318(c) and no school district shall
22 be entitled to a disbursement under section 318(d) unless one of
23 the following applies:
24 (1) Prior to enactment of the county ordinance, it
25 adopts a municipal resolution or a school district petition
26 containing the statement:
27 We strongly urge the county to enact a county sales
28 and use tax and intend to accept disbursements of the
29 sales and use taxes collected.
30 Any municipality which does not enact a resolution and any
20010S0792B0881 - 27 -
1 school district which does not enact a petition in compliance
2 with this paragraph shall not be entitled to and shall not
3 receive any distribution from funds collected during the
4 first 24 months immediately following the initial date of
5 imposition of such tax.
6 (2) Prior to October 1 of any year after the enactment
7 of the county resolution, it adopts a municipal resolution or
8 a school district petition containing the statement:
9 We support the enactment by the county of the county
10 sales and use tax and strongly urge its continuation
11 and intend to accept disbursements of the sales and
12 use taxes collected.
13 (b) Delivery.--A certified copy of the municipal resolution
14 or the school district petition shall be delivered to the county
15 commissioners, the department and the State Treasurer on or
16 before the enactment of the county resolution or October 15 of
17 any year thereafter, as the case may be.
18 Section 320. Qualified municipalities and school districts;
19 municipal and school district sales and use
20 tax initiative.
21 (a) General rule.--
22 (1) The State Treasurer shall distribute, on a weighted
23 formula basis, to each municipality that qualifies under
24 subsection (c) the appropriate percentage of revenues
25 received from the county sales and use tax.
26 (2) The State Treasurer shall distribute to each school
27 district that qualifies under subsection (c) a portion of the
28 total disbursement to school districts which is equal to the
29 total disbursement to school districts multiplied by the
30 ratio of average daily membership of the school district
20010S0792B0881 - 28 -
1 divided by the sum of the average daily membership of all
2 school districts in the county. For the purposes of this
3 section, "average daily membership" shall mean "average daily
4 membership" as defined by the act of March 10, 1949 (P.L.30,
5 No.14), known as the Public School Code of 1949. For school
6 districts located in more than one county, the average daily
7 membership shall be multiplied by a factor calculated by
8 dividing the square mileage of the school district located in
9 the county by the total square mileage of the school
10 district.
11 (b) Retention by county.--If a municipality or school
12 district fails to meet the requirements of subsection (c), its
13 disbursement shall be included in the disbursement to the county
14 under section 318(b).
15 (c) Qualifications.--Municipalities and school districts
16 qualified to receive disbursements under this section are
17 municipalities and school districts located within the county
18 which adopt in a timely fashion the resolution or petition
19 required under section 319.
20 (d) Municipal and school district sales and use tax
21 initiative.--
22 (1) Whenever the governing body of a county elects to
23 impose a tax on personal income under section 322(c)(1) or a
24 local tax on earned income under section 331(c), at least a
25 majority of the municipalities and school districts within
26 that county can require the governing body of the county to
27 also impose the sales and use tax as provided in section 312.
28 (2) (i) Whenever any municipality or school district of
29 a county determines that the governing body of that
30 county has elected not to impose a tax under section 312,
20010S0792B0881 - 29 -
1 that municipality or school district may place before the
2 governing bodies of all the municipalities and school
3 districts of that county the following question:
4 Do you favor the imposition of a county sales and use
5 tax at the rate of 1% as provided in section 312 of
6 the Optional County Tax Enabling Act?
7 (ii) The affirmative votes of the governing bodies
8 of municipalities and school districts representing at
9 least a majority of the municipalities and school
10 districts within the county shall be required to approve
11 the question.
12 (iii) The governing body of the county, upon receipt
13 of certifications from the participating municipalities
14 and school districts indicating approval of the question
15 shall, for the next calendar year and thereafter, impose
16 the tax authorized under section 312, provided that
17 approval of the electorate is obtained pursuant to the
18 provisions of section 303(b).
19 (iv) Municipalities and school districts intending
20 to receive proceeds from the imposition of the tax shall
21 also meet the requirements of section 319, provided that
22 municipalities and school districts voting affirmatively
23 under this subsection shall be deemed to meet the
24 requirements of section 319 for the year of initial
25 imposition.
26 SUBCHAPTER C
27 PERSONAL INCOME TAX
28 Section 321. Construction.
29 The tax imposed by the governing body of a county, under this
30 subchapter shall be in addition to any tax imposed by the
20010S0792B0881 - 30 -
1 Commonwealth under Article III of the Tax Reform Code. Except
2 for the differing provisions under sections 501, 502 and 503,
3 the provisions of Article III of the Tax Reform Code shall apply
4 to the tax.
5 Section 322. Local personal income tax.
6 (a) General rule.--Except as provided in subsection (b), in
7 lieu of imposing the tax under section 312, each county shall
8 have the power and may levy, assess and collect a local tax on
9 the personal income of resident taxpayers of the county up to a
10 maximum rate of 0.5%, in increments of 0.25%. Any county which
11 imposes a tax under this paragraph may not impose a tax under
12 section 312.
13 (b) Exception.--If the governing body of a county is
14 required to also impose a sales and use tax under section
15 320(d), in addition to imposing the tax under section 312, the
16 county shall have the power and may levy, assess and collect a
17 local tax on the personal income of resident taxpayers of the
18 county up to a maximum rate of 0.5%, in increments of 0.25%.
19 Section 323. Collections.
20 Any county imposing a tax under section 322 shall designate
21 the tax officer who is appointed under section 10 of the Local
22 Tax Enabling Act, or otherwise by law, as the collector of the
23 county, local personal income tax. In the performance of the tax
24 collection duties under this subchapter, the designated tax
25 officer shall have all the same powers, rights, responsibilities
26 and duties for the collection of the taxes which may be imposed
27 under the Local Tax Enabling Act or as otherwise provided by
28 law.
29 Section 324. Rules and regulations.
30 Taxes imposed under section 322 will be subject to the rules
20010S0792B0881 - 31 -
1 and regulations adopted by the department pursuant to Article
2 III of the Tax Reform Code.
3 Section 325. Procedure and administration.
4 The governing body of the county, in order to impose the tax
5 authorized by section 322, shall adopt an ordinance which shall
6 refer to this subchapter. Prior to adopting an ordinance
7 imposing the tax authorized by section 322, the governing body
8 shall give public notice of its intent to adopt the ordinance in
9 the manner provided by section 4 of the Local Tax Enabling Act
10 and shall conduct at least one public hearing regarding the
11 proposed adoption of the ordinance.
12 SUBCHAPTER D
13 EARNED INCOME AND NET PROFITS TAX
14 Section 331. Earned income and net profits tax.
15 (a) General rule.--Except as provided in subsection (b), in
16 lieu of imposing the tax under section 312, each county shall
17 have the power and may levy, assess and collect a tax on the
18 earned income and net profits of resident taxpayers of the
19 county up to a maximum rate of 0.5% in increments of 0.25% of
20 1%. Any county which imposes a tax under this paragraph may not
21 impose a tax under section 322.
22 (b) Counties.--If the governing body of a county is required
23 to also impose a sales and use tax under section 320(d), in
24 addition to imposing a tax under section 312, the county shall
25 have the power and may levy, assess and collect a tax on the
26 earned income and net profits of resident taxpayers of the
27 county up to a maximum rate of 0.5% in increments of 0.25%.
28 Section 332. Collections.
29 Any county imposing a tax under section 331 shall designate
30 the tax officer who is appointed under section 10 of the Local
20010S0792B0881 - 32 -
1 Tax Enabling Act, or otherwise by law, as the collector of the
2 earned income and net profits tax. In the performance of the tax
3 collection duties under this subchapter, the designated tax
4 officer shall have all the same powers, rights, responsibilities
5 and duties for the collection of the taxes which may be imposed
6 under the Local Tax Enabling Act or as otherwise provided by
7 law.
8 Section 333. Rules and regulations.
9 Taxes imposed under section 331 will be subject to the rules
10 and regulations pursuant to section 13 of the Local Tax Enabling
11 Act.
12 Section 334. Procedure and administration.
13 The governing body of the county, in order to impose the tax
14 authorized by section 331, shall adopt an ordinance which shall
15 refer to this subchapter. Prior to adopting an ordinance
16 imposing the tax authorized by section 331, the respective
17 governing body shall give public notice of its intent to adopt
18 the ordinance in the manner provided by section 4 of the Local
19 Tax Enabling Act, and shall conduct at least one public hearing
20 regarding the proposed adoption of the ordinance.
21 SUBCHAPTERS E THROUGH I (RESERVED)
22 CHAPTER 5
23 CREDITS AND EXEMPTIONS
24 Section 501. Credits.
25 The provisions of section 14 of the Local Tax Enabling Act
26 shall be used to determine any credits under the provisions of
27 this act for any taxes imposed under section 322 on the earned
28 income portion of the personal income tax or under section 331.
29 Section 502. Low-income tax provisions.
30 The provisions of section 304 of the Tax Reform Code shall be
20010S0792B0881 - 33 -
1 applied by any county which levies a tax under section 322 or
2 331.
3 Section 503. Regulations.
4 Each county, municipality or school district may adopt
5 regulations for the processing of claims under sections 501 and
6 502.
7 CHAPTER 7
8 DISPOSITION OF TAX REVENUES
9 Section 701. Sales tax revenues.
10 (a) Priority of use.--In the fiscal year of implementation,
11 each county that imposes a sales and use tax under this act
12 shall use all revenues from the tax first to offset any lost
13 revenue to the county from the taxes prohibited under section
14 301(b) in an amount equal to the revenue the county collected
15 from the prohibited taxes in the immediately preceding fiscal
16 year; second, to provide for an increase in budgeted revenues
17 over the preceding fiscal year in accordance with the amount
18 specified in the referendum question approved by the voters
19 under section 303 and then to reduce the county real property
20 tax by means of:
21 (1) The universal exemption or the homestead exemption.
22 (2) A reduction in the millage rate.
23 (3) Any combination of the options under paragraphs (1)
24 and (2), in accordance with section 704.
25 (b) Estimate by department.--The department shall provide to
26 each county that imposes a sales and use tax an estimate of the
27 total dollar amount of revenue that the county can expect to
28 receive from the county's share of the 1% county sales and use
29 tax for the fiscal year of implementation. The department may
30 charge the county for the actual costs of calculating the
20010S0792B0881 - 34 -
1 requested estimates. Guidelines concerning the costs shall be
2 published in the Pennsylvania Bulletin.
3 (c) Revenue less than estimate.--In the event the actual
4 amount of sales and use tax revenue received by a county is less
5 than the estimate of sales and use tax revenue provided by the
6 department, the county may increase its real property tax
7 millage rate to the level necessary to offset any shortfall
8 resulting from an overestimation of sales and use tax revenue,
9 as certified by the department, in the fiscal year of
10 implementation. Such increase shall not be subject to the
11 provisions of section 304(a).
12 Section 702. Income tax revenues.
13 The disposition of revenue from an income tax or an increase
14 in the rate of an income tax imposed by a county under the
15 authority of this act shall occur in the following manner:
16 (1) For the fiscal year of implementation of a newly
17 imposed income tax, all revenues received by a county shall
18 first be used to offset any lost revenue to the county from
19 the taxes prohibited under section 301(b) in an amount equal
20 to the revenue the county collected from the prohibited taxes
21 in the immediately preceding fiscal year; second, to provide
22 for an increase in budgeted revenues over the preceding
23 fiscal year in accordance with the amount specified in the
24 referendum question approved by the voters under section 303
25 and then to reduce the county real property tax by means of:
26 (i) The homestead exemption.
27 (ii) A reduction in the millage rate.
28 (iii) Any combination of the options under
29 subparagraphs (i) and (ii), in accordance with section
30 704.
20010S0792B0881 - 35 -
1 (2) For the fiscal year of implementation of an increase
2 in the rate of income tax, all revenues received by a county
3 in excess of current revenue plus the percentage increase in
4 the Statewide average weekly wage or 5%, whichever is less,
5 shall be used to reduce the county real property tax by means
6 of:
7 (i) The homestead exemption.
8 (ii) A reduction in the millage rate.
9 (iii) Any combination of the options under
10 subparagraphs (i) and (ii), in accordance with section
11 704.
12 Section 703. Revenue limitation exceptions.
13 (a) Exceptions listed.--The limitations in sections 701 and
14 702 may be waived, but only to the degree necessary, in the
15 following cases:
16 (1) To respond to or recover from an emergency or
17 disaster declared pursuant to 35 Pa.C.S. Pt. V (relating to
18 emergency management services), for the duration of the
19 emergency or duration of the disaster or for the costs of the
20 recovery from the emergency or disaster.
21 (2) To implement a court order or an administrative
22 decision of a Federal or State agency. In instances where the
23 tax increase is necessary to respond to a court order or an
24 administrative decision of a Federal or State agency
25 requiring a temporary increase in local expenditures, the
26 rate increase shall be rescinded following fulfillment of the
27 court order or administrative decision.
28 (3) To pay interest and principal on any indebtedness
29 incurred under 53 Pa.C.S. Pt. VII Subpt. B (relating to
30 indebtedness and borrowing). However, in no case may a taxing
20010S0792B0881 - 36 -
1 jurisdiction incur additional debt under this paragraph,
2 except for the refinancing of existing debt, including the
3 payment of costs and expenses related to such refinancing and
4 the establishment or funding of appropriate debt service
5 reserves.
6 (4) Taxes levied under section 607(f) of the act of
7 December 18, 1984 (P.L.1005, No.205), known as the Municipal
8 Pension Plan Funding Standard and Recovery Act, or levied to
9 pay increases in pension fund requirements which are in
10 excess of the annual average increase over the immediately
11 preceding five fiscal years.
12 (5) To increase revenues when actual and projected local
13 tax revenues, including any share of a county sales and use
14 tax, decline from the immediately preceding year but only to
15 the extent of the revenue decline.
16 (6) To respond to conditions that pose a threat of
17 immediate harm or injury to the students, staff or residents
18 of the county, municipality or school district.
19 (7) Special purpose tax levies approved by the
20 electorate.
21 (8) To respond to a Federal or State statute, regulation
22 or order adding to or significantly altering responsibilities
23 and duties or requiring expenditure of county or local funds
24 to the extent not funded by the Federal or State Government.
25 This provision shall apply only to a Federal or State
26 statute, regulation or order taking effect after the
27 effective date of this act.
28 (b) Court action.--Prior to any waiver under subsection
29 (a)(1), (4), (5), (6) or (8), approval is required by the court
30 of common pleas in the judicial district in which the governing
20010S0792B0881 - 37 -
1 body is located. The following shall apply to any proceedings
2 instituted under this subsection:
3 (1) The governing body must prove by a preponderance of
4 evidence the necessity for the waiver.
5 (2) The court may retain continuing jurisdiction in
6 these cases and may, on its own motion or on petition of an
7 interested party, revoke approval for the waiver.
8 (c) Distressed county.--This section shall not be construed
9 to prohibit any county declared distressed under the act of July
10 10, 1987 (P.L.246, No.47), known as the Municipalities Financial
11 Recovery Act, from petitioning the court of common pleas for a
12 tax increase in accordance with section 123(c) of the
13 Municipalities Financial Recovery Act.
14 (d) Standing.--Any taxpayer or business shall have standing
15 as a party to a proceeding under this section as long as the
16 taxpayer or business resides within or pays real property taxes
17 to the taxing jurisdiction of the governing body instituting the
18 action.
19 Section 704. Methods of reducing real property tax.
20 (a) General rule.--Any county that levies or receives
21 revenue from a sales and use tax or that levies an income tax
22 under the provisions of this act shall achieve any required
23 reduction of the real property tax by exercising one of the four
24 options contained in the following paragraphs:
25 (1) The county may exclude from taxation by means of the
26 homestead exemption a fixed amount of the assessed value of
27 each homestead property in the taxing jurisdiction within the
28 limits, if any, imposed by Article VIII of the Constitution
29 of Pennsylvania, as provided in subsection (b). The property
30 tax shall be levied at the same millage rate as levied by the
20010S0792B0881 - 38 -
1 county for the fiscal year immediately preceding the year of
2 implementation of the sales and use tax or income tax, as
3 appropriate, imposed under this act.
4 (2) The county may reduce the millage rate of the real
5 property tax generally to the same rate on all taxable real
6 property. The reduction in millage rate shall be calculated
7 based on the millage rate levied by the taxing jurisdiction
8 for the fiscal year immediately preceding the year of
9 implementation of the sales and use tax or income tax, as
10 appropriate, imposed under this act.
11 (3) The county may reduce the millage rate of the real
12 property tax generally to the same rate on all taxable real
13 property in combination with the homestead exemption as
14 provided under paragraph (1). The reduction in the real
15 property millage rate shall be calculated based on the
16 millage rate levied by the taxing jurisdiction for the fiscal
17 year immediately preceding the year of implementation of the
18 sales and use tax or income tax, as appropriate, imposed
19 under this act.
20 (b) Limitations.--
21 (1) A county may reduce the real property tax by means
22 of the homestead exemption, separately, or in combination
23 with a general reduction in the taxing jurisdiction's real
24 property millage rate, as provided in subsection (a).
25 (2) (i) Any taxing jurisdiction which elects to reduce
26 the real property tax by means of the homestead exemption
27 shall reduce the assessed value of each homestead in the
28 taxing jurisdiction by a fixed amount established by its
29 governing body up to a maximum which shall not exceed the
30 limits contained in section 2(b) of Article VIII of the
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1 Constitution of Pennsylvania.
2 (ii) After a countywide revision of assessments
3 within a county where a taxing jurisdiction which has
4 established a homestead exemption is located, the
5 governing body of the taxing jurisdiction shall adjust
6 the amount of the homestead exemption as follows:
7 (A) if the county changes its assessment base by
8 applying a change in the established predetermined
9 ratio, the homestead exemption shall be adjusted by
10 the percentage change between the existing
11 predetermined ratio and the newly established
12 predetermined ratio; or
13 (B) if the county performs a countywide revision
14 of assessments by revaluing all properties and
15 applying an established predetermined ratio, the
16 homestead exemption shall be adjusted by dividing the
17 homestead exemption for the year preceding the
18 countywide revision of assessments by the common
19 level ratio and multiplying the quotient of that
20 calculation by the newly established predetermined
21 ratio.
22 (3) If after reducing the real property tax by means of
23 either the homestead exemption or the universal exemption
24 there are any revenues remaining from a sales and use tax or
25 income tax imposed under this act, the remaining revenues
26 shall be used to further reduce the real property tax by
27 means of a uniform reduction in the millage rate.
28 (c) Definitions.--As used in this section, the following
29 words and phrases shall have the meanings given to them in this
30 subsection:
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1 "Common level ratio." The ratio of assessed value to current
2 market value used generally in the county as last determined by
3 the State Tax Equalization Board under the act of June 27, 1947
4 (P.L.1046, No.447), referred to as the State Tax Equalization
5 Board Law.
6 "Established predetermined ratio." The ratio of assessed
7 value to market value established by the board of county
8 commissioners and uniformly applied in determining assessed
9 value in any year.
10 "Homestead." A dwelling, and as much of the land surrounding
11 it as is reasonably necessary for the use of a dwelling as a
12 home, occupied as the principal dwelling place by the owner or
13 owners thereof. The term also includes premises occupied by
14 reason of ownership by individuals as defined in section 301 of
15 the Tax Reform Code. The term also includes premises occupied by
16 reason of ownership in a cooperative housing corporation, mobile
17 homes which are assessed as realty for local property tax
18 purposes and the land, if owned by the person claiming the
19 homestead property exemption upon which the mobile home is
20 situated, and other similar living accommodations, as well as
21 part of a multidwelling or multipurpose building and a part of
22 the land on which it is built. The term also includes premises
23 occupied by reason of ownership of a dwelling located on land
24 owned by a nonprofit incorporated association of which the
25 person claiming the homestead property exemption is a member, if
26 the person is required to pay a pro rata share of the property
27 taxes levied against the association's land. As used in this
28 subsection, the term "owner" includes a person in possession
29 under a contract of sale, deed of trust, life estate, joint
30 tenancy or tenancy in common or by reason of statutes of descent
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1 or distribution.
2 CHAPTER 9
3 REGISTER FOR CERTAIN TAXES
4 Section 901. Definitions.
5 The following words and phrases when used in this chapter
6 shall have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 "Department." The Department of Community and Economic
9 Development of the Commonwealth.
10 Section 902. Register for taxes under this act.
11 (a) General rule.--It shall be the duty of the department to
12 have available an official continuing register supplemented
13 annually of all sales and use, local personal income and earned
14 income and net profits taxes levied under this act.
15 (b) Contents of register.--The register and its supplements
16 shall list:
17 (1) The counties levying local personal income tax,
18 earned income and net profits tax or sales and use tax.
19 (2) The rate of tax as stated in the ordinance levying
20 the tax.
21 (3) The rate on taxpayers.
22 (4) The name and address of the tax officer responsible
23 for administering the collection of the tax and from whom
24 information, forms for reporting and copies of rules and
25 regulations are available.
26 Section 903. Information for register.
27 Information for the register shall be furnished by the chief
28 clerk of each county to the department in such manner and on
29 such forms as the department may prescribe. The information must
30 be received by the department no later than July 15 of each year
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1 to show new tax enactments, repeals and changes. Failure to
2 comply with this date for filing may result in the omission of
3 the tax levy from the register for that year. Failure of the
4 department to receive information of taxes continued without
5 change may be construed by the department to mean that the
6 information contained in the previous register remains in force.
7 Section 904. Availability and effective period of register.
8 The department shall have the register, with such annual
9 supplements as may be required by new tax enactments, repeals or
10 changes, available upon request no later than August 15 of each
11 year. The effective period for each register shall be from July
12 1 of the year in which it is issued to June 30 of the following
13 year.
14 Section 905. Effect of nonfiling.
15 Employers shall not be required by any ordinance to withhold
16 from the compensation of their employees any local personal
17 income tax or earned income and net profits tax imposed under
18 the provisions of this act which is not listed in the register
19 or to make reports of compensation in connection with taxes not
20 so listed. If the register is not available by August 15, the
21 register of the previous year shall continue temporarily in
22 effect for an additional period of not more than one year.
23 Section 906. Effect of chapter on liability of taxpayer.
24 The provisions of this chapter shall not affect the liability
25 of any taxpayer for taxes lawfully imposed under this act.
26 CHAPTER 15
27 MISCELLANEOUS PROVISIONS
28 Section 1501. Effective date.
29 This act shall take effect January 1, 2003.
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