PRINTER'S NO. 460
No. 421 Session of 2005
INTRODUCED BY COSTA, CAWLEY, GRUCELA, W. KELLER, MARKOSEK,
PISTELLA, SOLOBAY, TIGUE, WALKO, BALDWIN, BARRAR, BEBKO-
JONES, BUXTON, CAPPELLI, DALEY, DeWEESE, FREEMAN, GERGELY,
GINGRICH, HENNESSEY, KAUFFMAN, KOTIK, MANDERINO, REED,
SCAVELLO, R. STEVENSON, THOMAS, YOUNGBLOOD, BOYD,
CALTAGIRONE, CRAHALLA, DeLUCA, FABRIZIO, GEORGE, GILLESPIE,
GOODMAN, JAMES, KILLION, LEVDANSKY, MUNDY, RUBLEY, STETLER,
E. Z. TAYLOR AND TURZAI, FEBRUARY 14, 2005
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 14, 2005
AN ACT
1 Amending the act of December 31, 1965 (P.L.1257, No.511),
2 entitled "An act empowering cities of the second class,
3 cities of the second class A, cities of the third class,
4 boroughs, towns, townships of the first class, townships of
5 the second class, school districts of the second class,
6 school districts of the third class and school districts of
7 the fourth class including independent school districts, to
8 levy, assess, collect or to provide for the levying,
9 assessment and collection of certain taxes subject to maximum
10 limitations for general revenue purposes; authorizing the
11 establishment of bureaus and the appointment and compensation
12 of officers, agencies and employes to assess and collect such
13 taxes; providing for joint collection of certain taxes,
14 prescribing certain definitions and other provisions for
15 taxes levied and assessed upon earned income, providing for
16 annual audits and for collection of delinquent taxes, and
17 permitting and requiring penalties to be imposed and
18 enforced, including penalties for disclosure of confidential
19 information, providing an appeal from the ordinance or
20 resolution levying such taxes to the court of quarter
21 sessions and to the Supreme Court and Superior Court,"
22 further providing for delegation of taxing powers and
23 restrictions thereon.
24 The General Assembly of the Commonwealth of Pennsylvania
25 hereby enacts as follows:
1 Section 1. Section 2 of the act of December 31, 1965
2 (P.L.1257, No.511), known as The Local Tax Enabling Act, amended
3 December 1, 2004 (P.L.1729, No.222), is amended to read:
4 Section 2. Delegation of Taxing Powers and Restrictions
5 Thereon.--The duly constituted authorities of the following
6 political subdivisions, cities of the second class, cities of
7 the second class A, cities of the third class, boroughs, towns,
8 townships of the first class, townships of the second class,
9 school districts of the second class, school districts of the
10 third class, and school districts of the fourth class, in all
11 cases including independent school districts, may, in their
12 discretion, by ordinance or resolution, for general revenue
13 purposes, levy, assess and collect or provide for the levying,
14 assessment and collection of such taxes as they shall determine
15 on persons, transactions, occupations, privileges, subjects and
16 personal property within the limits of such political
17 subdivisions, and upon the transfer of real property, or of any
18 interest in real property, situate within the political
19 subdivision levying and assessing the tax, regardless of where
20 the instruments making the transfers are made, executed or
21 delivered or where the actual settlements on such transfer take
22 place. The taxing authority may provide that the transferee
23 shall remain liable for any unpaid realty transfer taxes imposed
24 by virtue of this act. Each local taxing authority [may] shall,
25 by ordinance or resolution, exempt any person whose total income
26 from all sources is less than twelve thousand dollars ($12,000)
27 per annum from the per capita or similar head tax, occupation
28 tax and emergency and municipal services tax, or earned income
29 tax, or any portion thereof, and may adopt regulations for the
30 processing of claims for exemptions. Such local authorities
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1 shall not have authority by virtue of this act:
2 (1) To levy, assess and collect or provide for the levying,
3 assessment and collection of any tax on the transfer of real
4 property when the transfer is by will or mortgage or the
5 intestate laws of this Commonwealth or on a transfer by the
6 owner of previously occupied residential premises to a builder
7 of new residential premises when such previously occupied
8 residential premises is taken in trade by such builder as part
9 of the consideration from the purchaser of a new previously
10 unoccupied single family residential premises or on a transfer
11 between corporations operating housing projects pursuant to the
12 housing and redevelopment assistance law and the shareholders
13 thereof, or on a transfer between nonprofit industrial
14 development agencies and industrial corporations purchasing from
15 them, or on transfer to or from nonprofit industrial development
16 agencies, or on a transfer between husband and wife, or on a
17 transfer between persons who were previously husband and wife
18 but who have since been divorced; provided such transfer is made
19 within three months of the date of the granting of the final
20 decree in divorce, or the decree of equitable distribution of
21 marital property, whichever is later, and the property or
22 interest therein, subject to such transfer, was acquired by the
23 husband and wife, or husband or wife, prior to the granting of
24 the final decree in divorce, or on a transfer between parent and
25 child or the spouse of such a child, or between parent and
26 trustee for the benefit of a child or the spouse of such child,
27 or on a transfer between a grandparent and grandchild or the
28 spouse of such grandchild, or on a transfer between brother and
29 sister or brother and brother or sister and sister or the spouse
30 of such brother or sister, or on a transfer to a conservancy
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1 which possesses a tax-exempt status pursuant to section
2 501(c)(3) of the Internal Revenue Code, and which has as its
3 primary purpose the preservation of land for historic,
4 recreational, scenic, agricultural or open space opportunities,
5 by and between a principal and straw party for the purpose of
6 placing a mortgage or ground rent upon the premises, or on a
7 correctional deed without consideration, or on a transfer to the
8 United States, the Commonwealth of Pennsylvania, or to any of
9 their instrumentalities, agencies or political subdivisions, by
10 gift, dedication or deed in lieu of condemnation, or deed of
11 confirmation in connection with condemnation proceedings, or
12 reconveyance by the condemning body of the property condemned to
13 the owner of record at the time of condemnation which
14 reconveyance may include property line adjustments provided said
15 reconveyance is made within one year from the date of
16 condemnation, leases, or on a conveyance to a trustee under a
17 recorded trust agreement for the express purpose of holding
18 title in trust as security for a debt contracted at the time of
19 the conveyance under which the trustee is not the lender and
20 requiring the trustee to make reconveyance to the grantor-
21 borrower upon the repayment of the debt, or a transfer within a
22 family from a sole proprietor family member to a family farm
23 corporation, or in any sheriff sale instituted by a mortgagee in
24 which the purchaser of said sheriff sale is the mortgagee who
25 instituted said sale, or on a privilege, transaction, subject,
26 occupation or personal property which is now or does hereafter
27 become subject to a State tax or license fee;
28 (2) To levy, assess or collect a tax on the gross receipts
29 from utility service of any person or company whose rates and
30 services are fixed and regulated by the Pennsylvania Public
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1 Utility Commission or on any public utility services rendered by
2 any such person or company or on any privilege or transaction
3 involving the rendering of any such public utility service;
4 (3) Except on sales of admission to places of amusement or
5 on sales or other transfers of title or possession of property,
6 to levy, assess or collect a tax on the privilege of employing
7 such tangible property as is now or does hereafter become
8 subject to a State tax; and for the purposes of this clause,
9 real property rented for camping purposes shall not be
10 considered a place of amusement.
11 (4) To levy, assess and collect a tax on goods and articles
12 manufactured in such political subdivision or on the by-products
13 of manufacture, or on minerals, timber, natural resources and
14 farm products produced in such political subdivision or on the
15 preparation or processing thereof for use or market, or on any
16 privilege, act or transaction related to the business of
17 manufacturing, the production, preparation or processing of
18 minerals, timber and natural resources, or farm products, by
19 manufacturers, by producers and by farmers with respect to the
20 goods, articles and products of their own manufacture,
21 production or growth, or on any privilege, act or transaction
22 relating to the business of processing by-products of
23 manufacture, or on the transportation, loading, unloading or
24 dumping or storage of such goods, articles, products or by-
25 products; except that local authorities may levy, assess and
26 collect an emergency and municipal services tax and taxes on the
27 occupation, per capita and earned income or net profits of
28 natural persons engaged in the above activities whether doing
29 business as individual proprietorship or as members of
30 partnerships or other associations;
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1 (5) To levy, assess or collect a tax on salaries, wages,
2 commissions, compensation and earned income of nonresidents of
3 the political subdivisions: Provided, That this limitation (5)
4 shall apply only to school districts of the second, third and
5 fourth classes;
6 (6) To levy, assess or collect a tax on personal property
7 subject to taxation by counties or on personal property owned by
8 persons, associations and corporations specifically exempted by
9 law from taxation under the county personal property tax law:
10 Provided, That this limitation (6) shall not apply to cities of
11 the second class;
12 (7) To levy, assess or collect a tax on membership in or
13 membership dues, fees or assessment of charitable, religious,
14 beneficial or nonprofit organizations including but not limited
15 to sportsmens, recreational, golf and tennis clubs, girl and boy
16 scout troops and councils;
17 (8) To levy, assess or collect any tax on a mobilehome or
18 house trailer subject to a real property tax unless the same tax
19 is levied, assessed and collected on other real property in the
20 political subdivision.
21 (9) To levy, assess or collect any tax on individuals for
22 the privilege of engaging in an occupation (emergency and
23 municipal services tax) except that such a tax may be levied,
24 assessed and collected only by the political subdivision of the
25 taxpayer's place of employment.
26 Payment of any emergency and municipal services tax to any
27 political subdivision by any person pursuant to an ordinance or
28 resolution passed or adopted under the authority of this act
29 shall be no less than ten dollars ($10) nor more than fifty-two
30 dollars ($52) on each person for each calendar year. If the
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1 amount of the tax exceeds twenty-six dollars ($26) the taxing
2 authority shall authorize payment of the tax on a quarterly
3 basis.
4 The situs of such tax shall be the place of employment, but,
5 in the event a person is engaged in more than one occupation, or
6 an occupation which requires his working in more than one
7 political subdivision during the calendar year, the priority of
8 claim to collect such emergency and municipal services tax shall
9 be in the following order: first, the political subdivision in
10 which a person maintains his principal office or is principally
11 employed; second, the political subdivision in which the person
12 resides and works, if such a tax is levied by that political
13 subdivision; third, the political subdivision in which a person
14 is employed and which imposes the tax nearest in miles to the
15 person's home. The place of employment shall be determined as of
16 the day the taxpayer first becomes subject to the tax during the
17 calendar year.
18 It is the intent of this provision that no person shall pay
19 more than fifty-two dollars ($52) in any calendar year as an
20 emergency and municipal services tax irrespective of the number
21 of political subdivisions within which such person may be
22 employed within any given calendar year.
23 In case of dispute, a tax receipt of the taxing authority for
24 that calendar year declaring that the taxpayer has made prior
25 payment which constitutes prima facie certification of payment
26 to all other political subdivisions.
27 (10) To levy, assess or collect a tax on admissions to
28 motion picture theatres: Provided, That this limitation (10)
29 shall not apply to cities of the second class.
30 (11) To levy, assess or collect a tax on the construction of
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1 or improvement to residential dwellings or upon the application
2 for or issuance of permits for the construction of or
3 improvements to residential dwellings.
4 (12) To levy, assess and collect a mercantile or business
5 privilege tax on gross receipts or part thereof which are: (i)
6 discounts allowed to purchasers as cash discounts for prompt
7 payment of their bills; (ii) charges advanced by a seller for
8 freight, delivery or other transportation for the purchaser in
9 accordance with the terms of a contract of sale; (iii) received
10 upon the sale of an article of personal property which was
11 acquired by the seller as a trade-in to the extent that the
12 gross receipts in the sale of the article taken in trade does
13 not exceed the amount of trade-in allowance made in acquiring
14 such article; (iv) refunds, credits or allowances given to a
15 purchaser on account of defects in goods sold or merchandise
16 returned; (v) Pennsylvania sales tax; (vi) based on the value of
17 exchanges or transfers between one seller and another seller who
18 transfers property with the understanding that property of an
19 identical description will be returned at a subsequent date;
20 however, when sellers engaged in similar lines of business
21 exchange property and one of them makes payment to the other in
22 addition to the property exchanged, the additional payment
23 received may be included in the gross receipts of the seller
24 receiving such additional cash payments; (vii) of sellers from
25 sales to other sellers in the same line where the seller
26 transfers the title or possession at the same price for which
27 the seller acquired the merchandise; or (viii) transfers between
28 one department, branch or division of a corporation or other
29 business entity of goods, wares and merchandise to another
30 department, branch or division of the same corporation or
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1 business entity and which are recorded on the books to reflect
2 such interdepartmental transactions.
3 (13) To levy, assess or collect an amusement or admissions
4 tax on membership, membership dues, fees or assessments,
5 donations, contributions or monetary charges of any character
6 whatsoever paid by the general public, or a limited or selected
7 number thereof, for such persons to enter into any place,
8 indoors or outdoors, to engage in any activities, the
9 predominant purpose or nature of which is exercise, fitness,
10 health maintenance, improvement or rehabilitation, health or
11 nutrition education, or weight control.
12 (14) Except by cities of the second class, to levy, assess
13 or collect a tax on payroll amounts generated as a result of
14 business activity.
15 (15) Except by cities of the second class in which a sports
16 stadium or arena that has received public funds in connection
17 with its construction or maintenance is located, to levy, assess
18 and collect a publicly funded facility usage fee upon those
19 nonresident individuals who use such facility to engage in an
20 athletic event or otherwise render a performance for which they
21 receive remuneration.
22 (16) To levy, assess or collect an amusement or admissions
23 tax on the charge imposed upon a patron for the sale of
24 admission to or for the privilege of admission to a bowling
25 alley or bowling lane to engage in one or more games of bowling.
26 Section 2. This act shall apply to taxes levied for tax
27 years commencing on or after January 1, 2006.
28 Section 3. This act shall take effect immediately.
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