PRINTER'S NO. 1455
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1322
Session of
2021
INTRODUCED BY STURLA, MERSKI AND SANCHEZ, MAY 6, 2021
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, MAY 6, 2021
AN ACT
Authorizing counties to impose sales and use taxes; providing
for the levying, assessment and collection of taxes and for
the powers and duties of the Department of Community and
Economic Development, the Department of Revenue and the State
Treasurer; and establishing the County Sales and Use Tax
Fund.
TABLE OF CONTENTS
Chapter 1. General Provisions
Section 101. Short title.
Section 102. Scope.
Section 103. Definitions.
Section 104. Preemption.
Section 105. Rates of taxation in home rule counties.
Chapter 3. Subjects of Taxation
Subchapter A. Tax Authorization
Section 301. General tax authorization.
Section 302. Continuity of tax.
Section 303. Election to participate under act.
Section 304. Municipal initiative and qualification.
Subchapter B. County Sales, Use and Occupancy Tax
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Section 311. Imposition of tax.
Section 312. Situs.
Section 313. Licenses.
Section 314. Rules and regulations and collection costs.
Section 315. Procedure.
Section 316. County Sales and Use Tax Fund.
Section 317. Disbursements.
Section 318. Allocations.
Chapter 5. Disposition of Tax Revenues
Section 501. Sales and use tax revenues.
Chapter 21. Miscellaneous Provisions
Section 2101. Construction.
Section 2102. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
GENERAL PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Optional
Sales Tax or Property Tax Relief and Municipal Assistance Act.
Section 102. Scope.
It is the intent of this act to confer upon each county the
power to levy, assess and collect taxes upon the subjects of
taxation specified in this act.
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Board of county commissioners." The term includes the
successor in function to the board of county commissioners in a
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county that has adopted a home rule charter under the provisions
53 Pa.C.S. Pt. III Subpt. E (relating to home rule and optional
plan government). The term does not include the city council of
a city of the first class or the county council of a county of
the second class.
"County." A county-level municipality within this
Commonwealth. The term includes a county that has adopted a home
rule charter or optional plan of government under the provisions
of 53 Pa.C.S. Pt. III Subpt. E. The term does not include a
county of the first class or a county of the second class.
"Department." The Department of Revenue of the Commonwealth.
"Fund." The County Sales, Use and Occupancy Tax Fund
established under section 316.
"Homestead." As defined in 53 Pa.C.S. § 8401 (relating to
definitions).
"Local Tax Enabling Act." The act of December 31, 1965
(P.L.1257, No.511), known as The Local Tax Enabling Act.
"Municipality." A city of the second class A, city of the
third class, borough, incorporated town, township of the first
class, township of the second class, home rule municipality,
optional plan municipality, optional form municipality or
similar general purpose unit of government that may after the
effective date of this section be established by statute. The
term includes a municipality that is located entirely or
partially in the county. The term does not include a city of the
first class, a city of the second class or a municipality
located in a county of the second class.
"Nonqualified municipality." A municipality that is not
qualified under section 304 to receive disbursements under
section 317.
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"PICAA." The act of June 5, 1991 (P.L.9, No.6), known as the
Pennsylvania Intergovernmental Cooperation Authority Act for
Cities of the First Class.
"Population." The number of individuals residing in an area
as determined in the most recent Federal decennial census.
"Qualified municipality." A municipality that is qualified
under section 304 to receive disbursements under section 317.
"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
Section 104. Preemption.
An act of the General Assembly in effect prior to or after
the effective date of this section may not be deemed to vacate
or preempt any ordinance passed or adopted under the authority
of this act or any other act providing authority for the
imposition of a tax by a county, unless the act of the General
Assembly expressly vacates or preempts the authority to pass or
adopt the ordinance.
Section 105. Rates of taxation in home rule counties.
A county that has adopted a home rule charter or optional
plan of government under the provisions of 53 Pa.C.S. Pt. III
Subpt. E (relating to home rule and optional plan government)
may not fix the rate of taxation for the subjects of taxation
authorized under Chapter 3 in excess of the rates fixed in
Chapter 3.
CHAPTER 3
SUBJECTS OF TAXATION
SUBCHAPTER A
TAX AUTHORIZATION
Section 301. General tax authorization.
Subject to the provisions of this act, a board of county
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commissioners shall have the power and may by ordinance levy and
assess or provide for the levying and assessment of taxes on the
sale or use of tangible personal property and services at a rate
of 1% within the geographical limits of the county.
Section 302. Continuity of tax.
A tax levied under this act shall continue in force on a
fiscal year basis without annual reenactment until the tax is
subsequently repealed.
Section 303. Election to participate under act.
A board of county commissioners may elect to participate
under this act by adopting an ordinance imposing the tax under
the procedures set forth in section 315.
Section 304. Municipal initiative and qualification.
(a) Initial year of implementation.--
(1) The governing body of a municipality desiring to
qualify for disbursements under section 317 beginning in the
first fiscal year following the effective date of this
section shall, on or before November 30 of that year, must:
(i) Adopt a resolution containing the following
statement:
We strongly support the county's enactment of a
1% county sales and use tax as allowed by the
Optional Sales Tax for Property Tax Relief and
Municipal Assistance Act and intend to accept
disbursements of the sales and use tax collected.
(ii) Deliver a certified copy of the resolution to
the board of county commissioners for the county in which
the municipality is located. If the municipality is
located in more than one county, the governing body shall
deliver a certified copy to the board of county
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commissioners for each county where the municipality is
located.
(2) Within 30 days following receipt of certified
resolutions from municipalities whose combined population
represents at least 66.67% of the population of the county,
commence the procedures under section 315 for imposing the
tax under section 311. The written notice to municipalities
under section 315(a) must be made 15 days prior to adoption
of the ordinance. The population of a municipality that is
located in more than one county shall be determined
separately for each county where the municipality is located
on the basis of the municipality's population within each
county.
(3) Impose the tax 90 days following the adoption of the
ordinance.
(a.1) Disqualification.--A municipality located in a county
where the tax is imposed during the first fiscal year following
the effective date of this section whose governing body does not
adopt and deliver to the board of county commissioners a
resolution under paragraph (1) shall not be qualified to receive
disbursements under section 317 for the first three fiscal years
following the effective date of this section.
(b) Implementation in subsequent years.--
(1) A municipality located in a county where the tax is
not imposed in the first fiscal year following the effective
date of this section desiring to qualify for disbursements
under section 317 shall follow the procedures under
subsection (a), except with respect to adoption by November
30 of that year, prior to the enactment by the county of an
ordinance under section 315 in any subsequent fiscal year. In
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that event, the municipality shall be qualified to receive
disbursements under section 317 for all subsequent fiscal
years that the tax is in effect. The requirements of
subsection (a)(1) must be met by June 30 for the imposition
of the tax by the county for the subsequent fiscal year.
(2) A municipality located in a county in which the tax
has been imposed and that has not followed the procedures
under subsection (a)(1) or paragraph (1) may only qualify for
disbursements under section 317 in the fourth or any
subsequent fiscal year following imposition of the tax, and
for all fiscal years thereafter, if it does all of the
following by September 1 of the fiscal year prior to the
first fiscal year in which the municipality will be qualified
to receive disbursement:
(i) Adopts a resolution containing the following
statement:
We support the enactment by the county of the county
1% sales and use tax as allowed by the Optional Sales
Tax for Property Tax Relief and Municipal Assistance
Act, strongly urge its continuation and intend to
accept disbursements of the sales and use tax
collected.
(ii) Delivers a certified copy of the resolution to
the board of county commissioners in which the
municipality is located. If the municipality is located
in more than one county, the governing body shall deliver
a certified copy to the board of county commissioners for
each county where the municipality is located.
(c) No limitation on counties.--Nothing in this section may
prohibit a board of county commissioners from electing to
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participate under this act under the procedures set forth in
section 315 without having received certified resolutions from
municipalities under subsection (a) or (b).
SUBCHAPTER B
COUNTY SALES, USE AND OCCUPANCY TAX
Section 311. Imposition of tax.
(a) Sales.--
(1) The board of county commissioners may levy and
assess upon each separate sale at retail of tangible personal
property or services, subject to tax imposed under section
202 of the Tax Reform Code, within the boundaries of the
county, a tax on the purchase price.
(2) The tax shall be collected by the vendor from the
purchaser and shall be paid over to the Commonwealth as
provided in this subchapter.
(b) Use.--The following apply:
(1) In any county within which the tax authorized in
subsection (a) is imposed, there shall be levied, assessed
and collected upon the use within the county of tangible
personal property and on services purchased at retail, as
subject to tax imposed under section 202 of the Tax Reform
Code, a tax on the purchase price.
(2) The tax shall be paid over to the Commonwealth by
the person that makes the use.
(3) The use tax imposed under this subchapter shall not
be paid over to the Commonwealth by any person that has paid
the tax imposed under subsection (a) or has paid the tax
imposed by this subsection to the vendor with respect to the
use.
Section 312. Situs.
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The situs of sales at retail or uses shall be determined in
the manner specified by section 504 of PICAA and by Article II-A
of the Tax Reform Code.
Section 313. Licenses.
The license issued under Article II of the Tax Reform Code or
a separate license for the collection of the tax imposed by this
subchapter may be issued by the department in the same manner as
is provided for in section 505 of PICAA. Licensees shall be
entitled to the same discount as provided in section 227 of the
Tax Reform Code.
Section 314. Rules and regulations and collection costs.
(a) Regulations.--The rules and regulations promulgated
under section 270 of the Tax Reform Code shall apply to the
taxes imposed under section 311 as those rules and regulations
are consistent with section 311.
(b) Administration and costs.--
(1) The department shall administer and enforce the
provisions of this subchapter and may promulgate and enforce
regulations consistent with the provisions of this
subchapter. The department may prescribe the extent to which
a regulation shall be applied without retroactive effect.
(2) To cover costs of administration, the department,
the Treasury Department and the Department of Community and
Economic Development shall be entitled to retain a sum equal
to costs of collection, but no more than 1% and 0.5%,
respectively, of the revenues collected under this
subchapter. The department shall inform the counties
participating under this act in writing monthly of the sum
retained and the costs of collection reimbursed. When the
annual operating budgets for the department and the Treasury
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Department are submitted to the General Assembly, each agency
shall also submit to the chairperson and minority chairperson
of the Appropriations Committee of the Senate and to the
chairperson and minority chairperson of the Appropriations
Committee of the House of Representatives the actual sums
retained for costs of collection in the preceding fiscal
year, together with all supporting details.
Section 315. Procedure.
(a) Ordinance.--
(1) A county desiring to impose the tax authorized by
section 311 shall give at least 45 days' written notice to
each municipality in the county of its intent to impose the
tax. The notice and ordinance shall state the tax rate and
refer to this subchapter. The ordinance shall authorize the
imposition of the tax on all subjects provided for in section
311.
(2) Prior to adopting an ordinance imposing the tax
under section 311, the board of county commissioners shall
give public notice of its intent to adopt the ordinance in
the manner provided in section 306 of the Local Tax Enabling
Act and shall conduct at least one public hearing regarding
the proposed adoption of the ordinance.
(3) The board of county commissioners may waive the
requirement for a public hearing if the ordinance will be
adopted under the provisions of section 304.
(4) Except as provided in paragraph (5), an ordinance
adopted under this section shall be adopted by September 1
and the tax shall be imposed as of January 1 of the following
fiscal year.
(5) Notwithstanding paragraph (4), a county desiring to
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impose the tax in the first fiscal year following the
effective date of this section may adopt an ordinance under
this section by November 30 of that year. If this paragraph
applies, the tax shall be imposed as of the date occurring 90
days following the adoption of the ordinance.
(b) Notification to department.--Certified copies of the
county ordinance shall be delivered to the department and the
municipalities within 15 days following adoption of the
ordinance.
(c) Repeal.--
(1) Not earlier than the end of the fifth fiscal year
following imposition of the tax authorized under section 311,
a county may repeal the tax. In that event, the county shall
give at least 30 days' written notice to every municipality
located in the county of its intent to repeal the tax. The
ordinance shall authorize the repeal of the tax on all
subjects provided for in section 311 if municipalities
representing more than 50% of the population benefiting from
the tax petition the county to do so.
(2) Prior to adopting an ordinance repealing the tax
imposed under section 311, the board of county commissioners
shall give public notice of its intent to repeal the
ordinance in the manner provided in section 306 of the Local
Tax Enabling Act for the adoption of ordinances and shall
conduct at least one public hearing regarding the proposed
repeal of the ordinance.
(d) Delivery of repeal ordinance.--The board of county
commissioners shall deliver certified copies of a repeal
ordinance to the department and the municipalities within the
county by September 1 of the year prior to the effective date of
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the repeal.
Section 316. County Sales and Use Tax Fund.
(a) Fund established in State Treasury.--There is
established in the State Treasury a County Sales, Use and
Occupancy Tax Fund. The State Treasurer shall be custodian of
the fund which shall be subject to the provisions of law
applicable to funds listed in section 302 of the act of April 9,
1929 (P.L.343, No.176), known as The Fiscal Code. Subaccounts
shall be established within the fund for each county
participating under this act.
(b) Deposits.--
(1) The tax imposed under section 311 shall be received
by the department and paid to the State Treasurer and, along
with interest and penalties, less any collection costs
allowed under this subchapter and any refunds and credits
paid, shall be credited to the respective counties'
subaccounts not less frequently than every two weeks.
(2) During any period prior to the credit of money to
each subaccount, interest earned on money received by the
department and paid to the State Treasurer under this
subchapter shall be credited to the respective subaccount.
(c) Lapsing and interfund transfers prohibited.--All money
in the fund and credited to the subaccounts, including, but not
limited to, money credited to the subaccounts under this
section, prior year encumbrances and the interest earned
thereon, shall not lapse nor be transferred to any other fund or
subaccount, but shall remain in the fund and be credited to the
respective subaccounts as provided under this chapter.
(d) Investment.--Pending disbursement, money received on
behalf of or deposited into the fund shall be invested or
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reinvested as is other money in the custody of the State
Treasurer in the manner provided by law. All earnings received
from the investment or reinvestment of the money shall be
credited to the fund.
Section 317. Disbursements.
(a) General rule.--On or before the 10th business day
following receipt from the department of the necessary
calculations, the State Treasurer shall make disbursements as
provided under this section.
(b) Disbursement to counties.--The State Treasurer shall
disburse to a county an amount of money equal to the amount
allocated under section 318 to all of the nonqualified
municipalities. The money shall be deposited into the county
general fund for disposition as provided under section 501(a).
(c) Disbursement to municipalities.-- Ninety-Nine percent of
the tax deposited into the fund shall be disbursed to each
qualified municipality in the amounts allocated under section
318(a). The money disbursed shall be deposited into the
municipal general fund for disposition as provided under section
501(b).
(d) Disbursement to counties.--The remaining 1% of the tax
deposited into the fund shall be disbursed to each county for
administration.
Section 318. Allocations.
(a) Allocations to municipalities.--The county shall compute
allocations of the sums to be disbursed to municipalities under
section 317(b) in the following manner:
(1) Money distributed shall be allocated based on the
revenue that would have been generated from local municipal
taxes by tax-exempt properties if they were taxable in each
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municipality located in the county. For municipalities
located in more than one county, the weighted tax revenues
for the county shall be prorated based upon the population of
the municipality in each county divided by the total
population of the municipality.
(2) Any money that exceed the calculated payments to
municipalities shall go to the county general fund.
(b) Calculation of tax-exempt revenues.--Calculations of
tax-exempt revenues shall be made by the county. These
calculations shall be submitted to the Department of Community
and Economic Development and certified by the department based
upon information reported to the Department of Community and
Economic Development, subject to review, verification and
approval by the Department of Community and Economic
Development.
CHAPTER 5
DISPOSITION OF TAX REVENUES
Section 501. Sales and use tax revenues.
(a) Counties.--All of the revenues estimated to be received
by a county from the tax in a fiscal year shall be expended by
the county to maintain core services.
(b) Municipalities.--All of the revenues estimated to be
received by a qualified municipality from the tax in a fiscal
year must be expended by the municipality as follows:
(1) If a municipality's pension plan is a moderately or
severely distressed municipal pension system under the act of
December 18, 1984 (P.L.1005, No.205), known as the Municipal
Pension Plan Funding Standard and Recovery Act, revenues
received in a fiscal year shall first be used to pay in full
the municipality's minimum municipal obligation under the
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Municipal Pension Plan Funding Standard and Recovery Act.
Remaining revenues received shall be used to maintain core
services.
(2) If a qualified municipality's pension plan is a
minimally distressed municipal pension system under the
Municipal Pension Plan Funding Standard and Recovery Act,
revenues received in a fiscal year shall be used to maintain
core services.
(3) If a municipality does not have a minimally,
moderately or severely distressed pension system under the
Municipal Pension Plan Funding Standard and Recovery Act,
revenues received by a qualified municipality shall be used
to maintain core services.
(d) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Core services." The term includes:
(1) Police services.
(2) Fire services.
(3) Public works.
(4) Public health and welfare services.
(5) Housing.
(6) Code enforcement.
CHAPTER 21
MISCELLANEOUS PROVISIONS
Section 2101. Construction.
The tax imposed by the board of county commissioners under
Subchapter B shall be in addition to any tax imposed by the
Commonwealth under Article II of the Tax Reform Code. Except for
the differing situs provisions under section 312, the provisions
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of Article II of the Tax Reform Code shall apply to the tax.
Section 2102. Effective date.
This act shall take effect immediately.
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