PRINTER'S NO. 621
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
678
Session of
2023
INTRODUCED BY STURLA, SIEGEL, SANCHEZ, D. WILLIAMS AND NEILSON,
MARCH 23, 2023
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, MARCH 23, 2023
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 of act.
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. Referendum by electorate in county.
Subchapter B. County Sales and Use Tax
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Section 311. Imposition of tax.
Section 312. Situs.
Section 313. Licenses.
Section 314. Rules and regulations.
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 of act.
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 and Use Tax Fund established under
section 316.
"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.
"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.
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"Tax." The county sales and use tax authorized in this act.
"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
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
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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 specified in section 315.
Section 304. Referendum by electorate in county.
(a) Resolution to participate.--If, by a majority vote, a
board of county commissioners adopts a resolution to participate
in this act, the resolution shall be presented to the county
electorate as a referendum to the ballot in the next election.
If approved by the county electorate, a copy of the resolution
shall be filed with the county board of elections and the ballot
question shall be written as:
Should the county enact a 1% county sales and use tax as
allowed by the Optional Sales Tax for Property Tax Relief
and Municipal Assistance Act to reduce property taxes and
provide funding for county and municipal services in this
county?
(b) Accordance with Election Code.--A referendum under this
section shall be conducted in accordance with the act of June 3,
1937 (P.L.1333, No.320), known as the Pennsylvania Election
Code.
(c) Approval by electorate.--Upon approval of a referendum
under this section, the board of county commissioners shall
impose the tax under section 311.
SUBCHAPTER B
COUNTY SALES AND USE TAX
Section 311. Imposition of tax.
(a) Sales.--
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(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 1% 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.--
(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 1% 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 subsection 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.
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
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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.
(a) Regulations.--The rules and regulations promulgated
under section 270 of the Tax Reform Code shall apply to the tax
as those rules and regulations are consistent with section 311.
(b) Administration.--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.
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 the 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 the 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.
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(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
impose the tax in the first fiscal year following the
effective date of this paragraph 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 of tax by county.--
(1) Not earlier than the end of the fifth fiscal year
following imposition of the tax by a county, the county may
repeal the tax. In that event, the county shall give at least
180 days' written notice to every municipality located in the
county of the 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 the 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
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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
the repeal.
Section 316. County Sales and Use Tax Fund.
(a) Establishment.--The County Sales and Use Tax Fund is
established in the State Treasury. The money in the fund is
appropriated on a continuing basis to the department for the
purposes specified in this act. 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
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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
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.
(e) Administrative costs.--The department shall use money in
the fund for costs to administer, excluding collection, the tax.
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
make disbursements to a county that has imposed the tax. The
money shall be deposited into the county general fund for
disposition as provided under section 501(a).
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
assessed value of tax-exempt properties if the properties
were taxable in each 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
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location of tax-exempt properties within the municipality.
(2) If revenue generated by the tax exceeds or does not
cover the assessed value of tax-exempt properties for both
the county and municipality, the money shall be distributed
proportionally on a pro-rated basis based on millage rate of
the county and municipality.
(3) Money shall be distributed to municipalities within
90 days of the Department of Community and Economic
Development's certification of the county's calculation of
assessed value of tax-exempt properties.
(b) Calculation of assessed tax-exempt properties.--
Calculations of assessed tax-exempt properties 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 or lower municipal property
tax rates.
(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
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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
Municipal Pension Plan Funding Standard and Recovery Act.
Remaining revenues received shall be used to maintain core
services or lower municipal property tax rates.
(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 or lower municipal property tax rates.
(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 or lower municipal property tax
rates.
(c) 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
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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
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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