Bill Text: PA HB2042 | 2011-2012 | Regular Session | Introduced

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Bill Title: Authorizing counties to impose sales, use and occupancy taxes; and providing for an optional sales and use tax for first class cities, for the levying, assessment and collection of taxes and for the powers and duties of the Department of Community and Economic Development or any successor agency, the Department of Revenue and the State Treasurer.

Spectrum: Moderate Partisan Bill (Democrat 16-2)

Status: (Introduced - Dead) 2011-12-01 - Referred to APPROPRIATIONS [HB2042 Detail]

Download: Pennsylvania-2011-HB2042-Introduced.html

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PRINTER'S NO. 2804
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2042 Session of2011
INTRODUCED BY STURLA, BRENNAN, BUXTON, CALTAGIRONE, CARROLL, DALEY, HORNAMAN, MAHONEY, MIRABITO, MUNDY, MURPHY, SANTONI, SCAVELLO, THOMAS, WATERS AND YOUNGBLOOD, DECEMBER 1, 2011
REFERRED TO COMMITTEE ON APPROPRIATIONS, DECEMBER 1, 2011
AN ACT
Authorizing counties to impose sales, use and occupancy taxes;
and providing for an optional sales and use tax for first
class cities, for the levying, assessment and collection of
taxes and for the powers and duties of the Department of
Community and Economic Development or any successor agency,
the Department of Revenue and the State Treasurer.
TABLE OF CONTENTS
Chapter 1. General Provisions
Section 101. Short title.
Section 102. Definitions.
Section 103. Scope.
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. Local tax study commission.
Section 305. Municipal sales, use and occupancy tax initiative.
Subchapter B. County Sales, Use and Occupancy Tax
Section 311. Construction.
Section 312. Imposition of tax.
Section 313. Situs.
Section 314. Licenses.
Section 315. Rules and regulations; collection costs.
Section 316. Procedure and administration.
Section 317. County sales, use and occupancy tax funds.
Section 318. Disbursements.
Section 319. Adoption of municipal ordinances.
Section 320. Allocations.
Chapter 5. Disposition of Tax Revenues
Section 501. Sales, use and occupancy tax revenues.
Section 502. Municipal collaborative efforts fund.
Section 503. Supplemental appropriations for collaborative
services.
Section 504. Revenue limitation exceptions.
Chapter 7. Optional Sales and Use Tax for Cities of the First
Class
Section 701. Definitions.
Section 702. Construction.
Section 703. Imposition.
Section 704. Situs for imposition of tax.
Section 705. Licenses.
Section 706. Department.
Section 707. Dedication and disbursement.
Section 708. Municipal action.
Section 709. Expiration.
Chapter 21. Miscellaneous Provisions
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Section 2101. (Reserved).
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 County and
Municipal Property Tax Relief and Collaborative Services Act.
Section 102. 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." Includes the successor in
function to the board of county commissioners in a county which
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), but 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 which 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). The term does not include a
county of the first class or a county of the second class.
"Current year." The calendar year or fiscal year for which a
tax is levied.
"Department." The Department of Revenue of the Commonwealth.
"Domicile." As defined in section 501 of the act of December
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31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
Act.
"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 which may after the
effective date of this section be established by statute, except
a city of the first class or a city of the second class. Unless
the context clearly indicates otherwise, for the purposes of
this act, a municipality located in a county shall include
municipalities that are located entirely or partially in the
county.
"Nonqualified municipality." A municipality that is not a
qualified municipality under this act.
"Nonresident." An individual domiciled outside a
municipality.
"Ordinance." Includes a resolution.
"Population." The number of individuals residing in an area
as determined in the most recent Federal decennial census.
"Preceding year." The calendar year or fiscal year before
the current year.
"Qualified municipality." A municipality that qualifies in
accordance with section 305(b) or 319.
"Succeeding year." The calendar year or fiscal year
following the current year.
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"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
"Taxpayer." An individual required under this act to file a
tax return or to pay a tax.
Section 103. 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 104. Preemption.
No act of the General Assembly in effect prior to or after
the effective date of this section shall 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 which 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.
(a) General rule.--Subject to section 303 and except as
provided in subsection (b), a county shall have the power and
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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 and the occupancy of a hotel room at a
rate of 1% for general revenue purposes as it shall determine on
any or all of the subjects of taxation set forth in this act
within the geographical limits of the county.
(b) Exclusions.--No county which levies a tax authorized by
this act shall have any power or authority to levy, assess or
collect:
(1) A tax based upon a flat rate or on a millage rate on
an assessed valuation of a particular trade, occupation or
profession, commonly known as an occupation tax.
(2) A per capita, poll, residence or similar head tax.
(3) The intangible personal property tax under the act
of June 17, 1913 (P.L.507, No.335), referred to as the
Intangible Personal Property Tax Law.
Section 302. Continuity of tax.
A tax levied under the provisions of this act shall continue
in force on a calendar year basis without annual reenactment
unless the tax is subsequently repealed.
Section 303. Election to participate under act.
(a) General rule.--A board of county commissioners which
elects to participate under the provisions of this act shall do
so by using the procedures specified in subsection (b) and in
accordance with the following provisions:
(1) An election to participate under this act shall
remain in effect for a period of at least three full calendar
years.
(2) A board of county commissioners after making an
election to participate under this act may, after a period of
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at least three full calendar years of participation, elect
under the provisions of subsection (c) to cease participation
under this act and levy, assess and collect the taxes
prohibited by section 301(b) to the extent otherwise provided
by law.
(b) Ordinance.--Subject to the notice and public hearing
requirements of section 316(a), a board of county commissioners
may elect to participate under this act by adopting an ordinance
imposing the tax. The ordinance must be adopted no later than
September 1 preceding the calendar year when the tax will be
initially imposed.
(c) Repeal.--Subject to the notice and public hearing
requirements of section 316(c), a board of county commissioners
may elect to cease participation under this act by adopting an
ordinance repealing the tax. The ordinance must be adopted no
later than September 1 preceding the calendar year when the tax
will be repealed.
Section 304. Local tax study commission.
(a) First-year implementation.--In considering whether to
levy, assess, collect or provide for the levy, assessment or
collection of any tax under this act, a board of county
commissioners may, by February 1 of the year preceding the
calendar year for which any such tax shall be levied, appoint a
local tax study commission in accordance with the following
provisions:
(1) The local tax study commission shall consist of
five, seven or nine members appointed by the board of county
commissioners. One member of the local tax study commission
may be a member of the board of county commissioners. No
member of the local tax study commission may be a relative,
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by blood or marriage, of an official or employee of the
county. All members must be residents of the county.
Representatives on a local tax study commission should
reasonably reflect the socioeconomic, age and occupational
diversity of the county.
(2) The board of county commissioners shall provide
necessary and reasonable staff to support the local tax study
commission.
(3) The members of the local tax study commission shall
receive reimbursement only for necessary and reasonable
expenses in the discharge of their duties.
(4) The local tax study commission shall study the
existing taxes levied, assessed and collected by the county
and determine if and how the tax policies of the county may
be strengthened or made more equitable by adopting for levy,
assessment and collection of a sales, use and occupancy tax
as provided for in this act. This study shall include, but
not be limited to, consideration of all of the following:
(i) Historic rate and revenue provided by taxes
currently levied, assessed and collected by the county.
(ii) The percentage of total revenues provided by
taxes currently levied, assessed and collected.
(iii) The age, income, employment and property use
characteristics of the existing tax base.
(iv) The projected revenues of any taxes currently
levied, assessed and collected.
(v) The projected revenues of any taxes referred to
in this paragraph not currently levied, assessed and
collected by the county.
(5) Within 120 days of its appointment, the local tax
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study commission shall make a nonbinding recommendation to
the board of county commissioners of the appropriate tax or
combination of taxes, identified in paragraph (4), to be
levied, assessed and collected commencing the next fiscal
year.
(6) Upon appointment of the commission and except as
provided for in paragraph (8), no tax may be levied, assessed
or collected for the next fiscal year until receipt of the
recommendation of the local tax study commission.
(7) No later than September 1 prior to the commencement
of the next fiscal year, the board of county commissioners
shall accept or reject the recommendation of the local tax
study commission or adopt any other appropriate tax or
combination of taxes for the county commencing the next
fiscal year as provided by this act and other applicable law.
(8) If the local tax study commission fails to make a
nonbinding recommendation within 120 days of its appointment,
the board of county commissioners shall discharge the
appointed local tax study commission and appoint itself as
the local tax study commission. No later than September 1
prior to the commencement of the next fiscal year, the board
of county commissioners shall adopt the appropriate tax or
combination of taxes for the county commencing the next
fiscal year as provided by this act and other applicable law.
(9) The local tax study commission shall publish or
cause to be published, within 30 days of making its
recommendation, a final report of its activities and
recommendations and shall deliver the final report to the
chief clerk of the county who shall supply copies to
interested persons at their request.
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(10) Receipts are required for all reimbursable
expenses.
(11) All the records, receipts, minutes of meetings and
written discussions of the local tax study commission shall,
upon its discharge, be turned over to the chief clerk of the
county for permanent safekeeping. The chief clerk shall make
such materials available for public inspection at any time
during regular business hours.
(12) The local tax study commission shall be discharged
on the filing of its final report.
(b) Effect.--A county that levies, assesses and collects or
provides for the levy, assessment or collection of any tax,
after having received the recommendations of a local tax study
commission and acted, shall continue to levy, assess and collect
the same tax or combination of taxes for a minimum of the next
three fiscal years.
(c) Periodic review.--Beginning at least three fiscal years
after action by a board of county commissioners on the
recommendation of a tax study commission under this section, and
no more frequently than every three fiscal years thereafter, the
board of commissioners may appoint a local tax study commission
in the manner provided in subsection (a). The local tax study
commission appointed under this subsection shall be charged with
all of the same powers and duties provided for a local tax study
commission under subsection (a).
(d) Construction.--Nothing in this section shall be
construed to preclude the board of county commissioners from
changing or altering the rates of any such tax or combination of
taxes if it deems necessary to the extent otherwise permitted by
law.
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Section 305. Municipal sales, use and occupancy tax initiative.
(a) General rule.—-After the first January 1 occurring at
least six months following the effective date of this section,
if the board of county commissioners of a county has not elected
to participate under this act, municipalities located in that
county may require, as provided in this section, the board of
county commissioners of the county to impose the sales, use and
occupancy tax as provided in section 312.
(b) Procedure.--
(1) If the board of county commissioners of a county has
not elected to participate under this act by the first
January 1 occurring at least six months following the
effective date of this section, the governing body of a
municipality located in that county may place before the
governing bodies of all the municipalities located in that
county the following question:
Do you favor the imposition of a county sales, use and
occupancy tax at the rate of 1% as provided in section
312 of the County and Municipal Property Tax Relief and
Collaborative Services Act?
(2) Circulation of the question may begin no earlier
than January 1 of the year prior to the proposed year of
implementation, and the vote by the governing bodies of the
municipalities must conclude no later than June 1 of the year
prior to the proposed year of implementation.
(3) Each governing body of a municipality voting in the
affirmative on the question shall certify its vote on the
question to the board of county commissioners. The governing
body of a municipality that is located in more than one
county shall certify its vote on the question to the board of
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county commissioners for each county where the municipality
is located.
(4) The affirmative votes of the governing bodies of
municipalities whose combined population represents more than
60% of the population within the county shall be necessary
for the board of county commissioners to elect participation
under this act. 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.
(5) Upon receipt of certifications from municipalities
indicating approval of the question by municipalities whose
combined population represents more than 60% of the
population of the county, the board of county commissioners
of the county shall, for the next calendar year, elect to
participate under this act, pursuant to the procedures of
section 303.
(6) A municipality is qualified to receive a
disbursement under section 318 if the municipality:
(i) votes in the affirmative on the question under
this section; or
(ii) qualifies in accordance with the provisions of
section 319.
SUBCHAPTER B
COUNTY SALES, USE AND OCCUPANCY TAX
Section 311. Construction.
The tax imposed by the board of county commissioners under
this subchapter shall be in addition to any tax imposed by the
Commonwealth under Article II of the Tax Reform Code. Except for
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the differing situs provisions under section 313, the provisions
of Article II of the Tax Reform Code shall apply to the tax.
Section 312. 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, as defined in Article II 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.--
(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 purchased at retail and on services
purchased at retail, as defined in Article II of the Tax
Reform Code, a tax on the purchase price.
(2) The tax shall be paid over to the Commonwealth by
the person who makes the use.
(3) The use tax imposed under this subchapter shall not
be paid over to the Commonwealth by any person who has paid
the tax imposed by subsection (a) or has paid the tax imposed
by this subsection to the vendor with respect to the use.
(c) Occupancy.--
(1) In any county within which a tax authorized by
subsection (a) is imposed, there shall be levied, assessed
and collected an excise tax on the rent upon every occupancy
of a room or rooms in a hotel in the county.
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(2) The tax shall be collected by the operator or owner
from the occupant and paid over to the Commonwealth.
(d) Rate and uniformity.--The tax authorized by subsections
(a), (b) and (c) shall be imposed at a rate of 1% and shall be
uniform.
(e) Computation.--The tax imposed under this section shall
be computed in the manner set forth in section 503(e)(2) of 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.
Section 313. Situs.
The situs of sales at retail or uses of motor vehicles,
aircraft, motorcraft and utility services shall be determined in
the manner specified by section 504 of 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 and by
Article II-A of the Tax Reform Code.
Section 314. Licenses.
A license for the collection of the tax imposed by this
subchapter shall be issued in the same manner as is provided for
in section 505 of 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. Licensees shall be entitled to
the same discount as provided in section 227 of the Tax Reform
Code.
Section 315. Rules and regulations; collection costs.
(a) Regulations.--Rules and regulations shall be applicable
to the taxes imposed under section 312 in the same manner as is
provided for in section 506(1) and (2) of the act of June 5,
1991 (P.L.9, No.6), known as the Pennsylvania Intergovernmental
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Cooperation Authority Act for Cities of the First Class.
(b) Administrative costs.--
(1) The department may retain a sum equal to 1% of the
revenues collected under this subchapter for its
administrative costs.
(2) When the annual operating budget for the department
is submitted to the General Assembly, the department shall
also submit to the chairman and minority chairman of the
Appropriations Committee of the Senate and to the chairman
and minority chairman 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 316. Procedure and administration.
(a) Ordinance.--
(1) A county desiring to impose the tax authorized by
section 312 shall give at least 60 days' written notice to
each municipality in the county of its intent to impose the
tax and shall adopt an ordinance after the expiration of 60
days after the date of the notice. 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 312.
(2) Prior to adopting an ordinance imposing the tax
under section 312, the board of county commissioners shall
give public notice of its intent to adopt the ordinance in
the manner provided by 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
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requirement for a public hearing if the ordinance will be
adopted pursuant to the provisions of section 305.
(b) Notification to department.--A certified copy of the
county ordinance shall be delivered to the department by
September 1 of the year prior to the effective date of the
ordinance. The county ordinance shall become effective on the
January 1 following delivery of the certified copy to the
department.
(c) Repeal.--
(1) A county, having enacted the tax authorized by
section 312 and desiring to repeal the tax, shall give at
least 60 days' written notice to every municipality located
in the county of its intent to repeal the tax and shall adopt
an ordinance after the expiration of 60 days after the date
of the notice. The ordinance shall authorize the repeal of
the tax on all subject under section 312.
(2) Prior to adopting an ordinance repealing the tax
imposed under section 312, the board of county commissioners
shall give public notice of its intent to repeal the
ordinance in the manner provided by section 506 of the Local
Tax Enabling Act 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 a certified copy of a repeal
ordinance to the department by September 1 of the year prior to
the effective date of the repeal.
Section 317. County sales, use and occupancy tax funds.
(a) Funds established in State Treasury.--There is hereby
established in the State Treasury for each county imposing the
tax under section 312 a county sales, use and occupancy tax fund
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in the name of each county. The State Treasurer shall be
custodian of the funds 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.
(b) Deposits into funds.--
(1) The tax imposed under section 312 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 fund not less
frequently than every two weeks.
(2) During any period prior to the credit of moneys to
each such fund, interest earned on moneys received by the
department and paid to the State Treasurer under this
subchapter shall be deposited into the respective fund.
(c) Lapsing and interfund transfers prohibited.--All moneys
in each respective fund, including, but not limited to, moneys
credited to the fund under this section, prior year encumbrances
and the interest earned thereon, shall not lapse or be
transferred to any other fund, but shall remain in the
respective fund.
(d) Investment.--Pending their disbursement, moneys received
on behalf of or deposited into each respective fund shall be
invested or reinvested as are other moneys in the custody of the
State Treasurer in the manner provided by law. All earnings
received from the investment or reinvestment of the moneys shall
be credited to the respective fund.
Section 318. Disbursements.
(a) General rule.--On or before the tenth day of every
month, the State Treasurer shall make disbursements as provided
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in this section.
(b) Disbursement to counties.--
(1) The State Treasurer shall disburse to a county
imposing the tax under section 312 an amount of money equal
to 50% of the tax deposited in the respective county sales,
use and occupancy tax fund for deposit into the county
general fund for disposition as provided under section
501(a).
(2) The State Treasurer shall disburse to a county, in
addition to its share under paragraph (1), an amount of money
equal to the amount allocated to all of the nonqualified
municipalities as provided in this section.
(c) Allocation to municipalities.--The State Treasurer shall
allocate to the municipalities located in the county an amount
of money equal to 40% of the tax deposited in the respective
county sales, use and occupancy tax fund, which shall be
apportioned to all of the municipalities located in that county
as computed under section 320(a).
(d) Disbursement to municipalities.--
(1) The amount apportioned to each qualified
municipality shall be disbursed to the qualified municipality
for deposit into the municipal general fund for disposition
as provided in section 501(b).
(2) The amount apportioned to each nonqualified
municipality shall be disbursed to the county as provided in
subsection (b)(2) for deposit into the county general fund
for disposition as provided under section 501(a).
(e) Disbursement to municipal collaborative efforts fund.--
The State Treasurer shall disburse to the municipal
collaborative efforts fund established by the county under
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section 502 an amount of money equal to 10% of the tax deposited
in the respective county sales, use and occupancy tax fund.
(f) Penalty.--If disbursements are not made on or before the
tenth day of each month, a 5% penalty shall be added thereto
plus an additional 1% late charge per month delayed, along with
interest and penalties accruing under section 317. Payment of
penalties and late charges under this subsection shall be made
from the General Fund of the Commonwealth into the county sales,
use and occupancy tax fund established under section 317.
Section 319. Adoption of municipal ordinances.
(a) Initial year qualification.--A municipality is qualified
to receive a disbursement under section 318 if, prior to
enactment of the county ordinance, the municipality:
(1) Adopts a municipal ordinance containing the
statement:
We strongly urge the county to enact a county sales, use
and occupancy tax and intend to accept disbursements of
the sales, use and occupancy tax collected.
(2) Delivers a certified copy of the municipal ordinance
to the board of county commissioners on or before the
enactment of the county ordinance. A municipality that is
located in more than one county shall deliver a certified
copy to the board of county commissioners for each county
where the municipality is located.
(b) Subsequent year qualification.--A municipality is
qualified to receive a disbursement under section 318 if, prior
to October 1 of any year after the year of initial imposition of
the tax by a county, the municipality meets the following
requirements:
(1) Adopts a municipal ordinance containing the
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statement:
We support the enactment by the county of the county
sales, use and occupancy tax and strongly urge its
continuation and intend to accept disbursements of the
sales, use and occupancy tax collected.
(2) Delivers a certified copy of the municipal ordinance
to the board of county commissioners on or before the
enactment of the county ordinance by October 15 of the year
in which the ordinance is enacted. A municipality that is
located in more than one county shall deliver a certified
copy to the board of county commissioners for each county
where the municipality is located.
(c) Nonqualification.--Notwithstanding the provisions of
subsection (b), a municipality shall not qualify to receive a
disbursement under section 318 earlier than 36 months after the
initial date of imposition of the tax unless the municipality:
(1) enacts an ordinance in accordance with the
provisions of subsection (a); or
(2) votes in the affirmative to the question in
accordance with the provisions of section 305.
Section 320. Allocations.
(a) Allocations to municipalities.--The State Treasurer
shall compute allocations to municipalities in the following
manner:
(1) Fifty percent of the money allocated to
municipalities in the county shall be distributed pro rata
based on the weighted tax revenues for each municipality
located in the county as a percentage of the total weighted
tax revenues of all municipalities located in the county. For
municipalities located in more than one county, the weighted
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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) Fifty percent of the money allocated to
municipalities in the county shall be distributed pro rata
based on the population of each municipality located in the
county as a percentage of the sum of the population of all
municipalities located in the county. For municipalities
located in more than one county, the population of the county
shall be determined separately for each county where the
municipality is located on the basis of the municipality’s
population within each county.
(b) Calculation of weighted tax revenues.--Calculations of
weighted tax revenues shall be made by the Department of
Community and Economic Development or any successor agency and
certified to the State Treasurer based upon information reported
to the Department of Community and Economic Development or any
successor agency, subject to review, verification and approval
by the Department of Community and Economic Development or any
successor agency.
(c) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection:
"Per capita market value." The total market value of all
real property divided by population as determined by the most
recent decennial census.
"Total tax revenues." Real property tax revenues, revenues
received by levy of a tax under the Local Tax Enabling Act,
revenues received by levy of a tax under this act and revenues
received by levy of a tax under the act of August 9, 1955
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(P.L.323, No.130), known as The County Code, the act of June 23,
1931 (P.L.932, No.317), known as The Third Class City Code, the
act of February 1, 1966 (1965 P.L.1656, No.581), known as The
Borough Code, the act of June 24, 1931 (P.L.1206, No.331), known
as the First Class Township Code, and the act of May 1, 1933
(P.L.103, No.69), known as The Second Class Township Code, as
applicable to the municipality.
"Weighted tax revenues." Total tax revenues from all sources
of a municipality divided by the per capita market value of the
municipality.
CHAPTER 5
DISPOSITION OF TAX REVENUES
Section 501. Sales, use and occupancy tax revenues.
(a) Counties.--
(1) In the first year of implementation of the tax under
section 312, no less than 60% of any additional revenues
received by a county from the tax shall be used to offset the
revenues lost as a result of the prohibition against
imposition of the taxes enumerated in section 301(b) and then
to reduce the county real property tax, first by means of a
homestead exclusion and then, if the maximum homestead
exclusion has been attained, by means of reduction in the
property tax millage rate.
(2) Revenues received and retained by a county from the
tax under section 312 shall be expended for public purposes
authorized by statutes governing counties.
(b) Municipalities.--
(1) In the first year of implementation of the taxes
under section 312, no less than 60% of any additional
revenues received by a qualified municipality from the tax
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shall be used for the following, separately or in
combination:
(i) To offset the municipal real property tax, first
by means of a homestead exclusion and then, if the
maximum homestead exclusion has been attained, by means
of reduction in the property tax millage rate.
(ii) To offset lost municipal revenue based on the
value of real property in the municipality that has been
exempted from real property taxation pursuant to law.
(2) If, in the first year of implementation, 60% of the
amount of revenues received by a qualified municipality
exceeds the sum of the amount of offsets available under
paragraph (1) for that year, then that excess revenue shall
be used for the following, separately or in combination:
(i) To offset any other municipal tax or fee.
(ii) To make a supplemental appropriation in
accordance with section 503.
(3) Revenues received and retained by a qualified
municipality from the taxes under section 312 shall be
expended for public purposes of health, safety and welfare as
provided in the municipality’s governing statutes.
Section 502. Municipal collaborative efforts fund.
(a) Fund established.--There is hereby established in each
county levying the tax under section 312 a municipal
collaborative efforts fund.
(b) Deposits.--Payments received under section 318(e) shall
be deposited in the municipal collaborative efforts fund of the
county for use as specified in this section.
(c) Municipal collaborative efforts board.--
(1) Upon levy of the taxes under section 312 by a
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county, a municipal collaborative efforts board will be
established within the county.
(2) The municipal collaborative efforts board shall
award grants for the provision of municipal collaborative
efforts within the county that meet criteria established by
the municipal collaborative efforts board.
(3) All of the members of the municipal collaborative
efforts board must be elected officials from qualified
municipalities in the county.
(4) The municipal collaborative efforts board shall be
comprised of no fewer than three voting members and one
nonvoting member, and no more than seven voting members and
one nonvoting member. The municipal collaborative efforts
board shall include at least one representative from each
class of municipality located in the county; provided that
the class of municipality consists of at least one qualified
municipality. The number of representatives from each class
of municipality located in the county shall be in reasonable
proportion to the number of municipalities within each class
of municipality in the county.
(5) The board of county commissioners shall appoint
members to the municipal collaborative efforts board from
nominations made by resolution of the qualified
municipalities in the county. Prior to appointment, the board
of county commissioners shall submit the nominees to councils
of governments and county associations of municipalities
existing in the county, if any, for review and comment.
(6) Members shall serve a two-year term and may be
nominated for successive terms. Vacancies shall be filled by
the board of county commissioners for the balance of the
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unexpired term, and any appointment made shall be from the
same class of qualified municipality. Initial appointments
shall be made within 60 days of a county levying the taxes
under section 312, and vacancies shall be filled within 60
days of their occurrence from nominees submitted by
municipalities of the class for which the vacancy exists.
(7) Within 30 days of appointment, and on the first
Monday after the first day of January of each year following,
the municipal collaborative efforts board shall organize.
(8) No more than 10% of the annual payments received
under section 318(e) may be used by the municipal
collaborative efforts board for administrative purposes.
(9) The municipal collaborative efforts board shall
adopt standard rules of parliamentary procedure and shall
adopt such other rules and regulations necessary for conduct
of the business of the municipal collaborative efforts board.
The Department of Community and Economic Development shall
develop sample rules and regulations and other guidance
materials.
(d) Disbursements.--
(1) Disbursement of funds shall be made to one or more
qualified municipalities or groups of qualified
municipalities organized under 53 Pa.C.S. Ch. 23 Subch. A
(relating to intergovernmental cooperation) or operating
under other contractual agreement, for the purpose of
providing municipal collaborative efforts.
(2) Nonqualified municipalities shall be ineligible for
funds under this section unless the funding is pursuant to an
agreement under 53 Pa.C.S. Ch. 23 Subch. A in which the
majority of participating municipalities are qualified
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municipalities or pursuant to other contractual agreement in
which the majority of participating municipalities are
qualified municipalities.
(e) Audit.--Following the close of the fiscal year, the
municipal collaborative efforts board shall provide for an
examination of its financial records and the financial records
of its fund by a certified public accountant in accordance with
generally accepted government auditing standards. The municipal
collaborative efforts board may require any recipient of funds
under this section to provide to the municipal collaborative
efforts board an audit of the use of those funds in accordance
with generally accepted government auditing standards.
(f) Definition.--For the purposes of this section, the term
"qualified municipality" shall have the same meaning given in
section 102, except that for municipal collaborative efforts
provided by agreement for municipalities in more than one
county, the term shall include municipalities qualified in
another county.
Section 503. Supplemental appropriations for collaborative
services.
A county or municipality may appropriate and transfer by
contract a portion of its receipts of disbursements under this
act to one or more other counties or municipalities or groups of
municipalities organized under 53 Pa.C.S. Ch. 23 Subch. A
(relating to intergovernmental cooperation), for the purpose of
providing governmental services on behalf of that county or
municipality.
Section 504. Revenue limitation exceptions.
(a) Waiver.--A board of county commissioners or the
governing body of a municipality may waive the limitations
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relating to the reduction or elimination of taxes in sections
501, but only to the degree necessary, in the following cases:
(1) If an increase in local expenditures is necessary to
respond to or recover from an emergency or disaster declared
by the Governor.
(2) If the political subdivision is required to
implement a court decision.
(3) To pay interest and principal on any indebtedness
incurred under the provisions of 53 Pa.C.S. Pt. VII Subpt. B
(relating to indebtedness and borrowing).
(4) To pay increases in pension fund requirements which
are in excess of the annual average increase over the
immediately preceding five fiscal years.
(5) To respond to a county or municipality declared to
be distressed under the act of July 10, 1987 (P.L.246,
No.47), known as the Municipalities Financial Recovery Act.
(6) To increase revenues when actual revenues decline
from the immediately preceding year, but only to the extent
of the revenue decline.
(7) If the increase does not exceed the limitations on
millage rates for real property under the act of August 9,
1955 (P.L.323, No.130), known as The County Code, the act of
June 23, 1931 (P.L.932, No.317), known as The Third Class
City Code, the act of February 1, 1966 (1965 P.L.1656,
No.581), known as The Borough Code, the act of June 24, 1931
(P.L.1206, No.331), known as the First Class Township Code,
and the act of May 1, 1933 (P.L.103, No.69), known as The
Second Class Township Code.
(8) (i) To respond to a Federal or State statute,
regulation or order adding to or significantly altering
20110HB2042PN2804 - 27 -
responsibilities and duties or requiring expenditure of
funds to the extent not funded by the Federal Government
or State government.
(ii) This paragraph shall apply only to a Federal or
State statute, regulation or order taking effect after
the effective date of this section.
(9) To increase revenue equal to the percentage increase
in the Statewide average weekly wage from the immediately
preceding year or 5%, whichever is less.
(b) Appeal.--
(1) A person aggrieved by a waiver of limitations
pursuant to this section may appeal to the court of common
pleas in the judicial district in which the county or
municipality is located.
(2) The following shall apply to any proceedings
instituted under this subsection:
(i) The county or municipality that is subject of
the appeal must show by clear and convincing evidence the
necessity to claim the waiver of limitations.
(ii) The county or municipality must show by clear
and convincing evidence that there are no assets or other
feasible alternatives available to the county or
municipality.
(iii) A person shall have standing as a party to a
proceeding under this subsection as long as the person
resides within or pays real property taxes to the taxing
jurisdiction of the county or municipality that is
subject of the appeal.
CHAPTER 7
OPTIONAL SALES AND USE TAX
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FOR CITIES OF THE FIRST CLASS
Section 701. Definitions.
(a) Article II of Tax Reform Code.--The definitions in
section 201 of the act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, apply to this chapter.
(b) Specific.--The following words and phrases when used in
this chapter shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"City." A city of the first class.
"Fund." The Local Sales and Use Tax Fund.
Section 702. Construction.
(a) Additional tax.--The tax imposed by a city under this
chapter shall be in addition to any tax imposed:
(1) by the Commonwealth under Article II of the act of
March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971; or
(2) by a city under 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.
(b) Article II of Tax Reform Code.--Except for the differing
situs provisions under section 704, section 202-A and Article II
of the Tax Reform Code of 1971 applies to this chapter.
Section 703. Imposition.
(a) Sales.--
(1) The governing body of a city may levy, assess and
collect, upon each separate sale at retail of tangible
personal property or services within the city, 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
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provided in this chapter.
(b) Use.--
(1) If a city imposes the tax under subsection (a), the
governing body of the city shall levy, assess and collect,
upon the use within the city of tangible personal property
purchased at retail and of services purchased at retail, a
tax on the purchase price.
(2) Except as set forth in paragraph (3), the tax shall
be paid over to the Commonwealth by the person that makes the
use.
(3) The tax shall not be paid over to the Commonwealth
by a person that, with respect to the same taxable subject:
(i) has paid the tax under subsection (a); or
(ii) has paid the tax imposed by this subsection to
the vendor.
(c) Rate and uniformity.--The rate of the tax authorized by
this section shall be 1%.
(d) Computation.--The tax under this section shall be
computed as follows:
(1) If the purchase price is 50¢ or less, no tax shall
be collected.
(2) If the purchase price is 51¢ or more but less than
$1.51, 1¢ shall be collected.
(3) If the purchase price is $1.51 or more but less than
$2.51, 2¢ shall be collected.
(4) If the purchase price is $2.51 or more but less than
$3.51, 3¢ shall be collected.
(5) If the purchase price is $3.51 or more but less than
$4.51, 4¢ shall be collected.
(6) If the purchase price is $4.51 or more but less than
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$5.51, 5¢ shall be collected.
(7) If the purchase price is $5.51 or more but less than
$6.51, 6¢ shall be collected.
(8) If the purchase price is $6.51 or more but less than
$7.51, 7¢ shall be collected.
(9) If the purchase price is $7.51 or more but less than
$8.51, 8¢ shall be collected.
(10) If the purchase price is $8.51 or more but less
than $9.51, 9¢ shall be collected.
(11) If the purchase price is $9.51 or more but less
than $10.01, 10¢ shall be collected.
(12) If the purchase price is more than $10, 1% of each
$10 purchase price plus the above bracket charges upon any
fractional part of a $10 increment shall be collected.
Section 704. Situs for imposition of tax.
(a) Situs for retail sales.--Except as otherwise set forth
in this section, a sale at retail shall be deemed to be
consummated at the place of business of the retailer. If a
retailer has more than one place of business in this
Commonwealth which participates in the sale, the sale shall be
deemed to be consummated at the place of business of the
retailer where the initial order for the tangible personal
property is taken, even though the order must be forwarded
elsewhere for acceptance, approval of credit, shipment or
billing. A sale by a retailer's employee shall be deemed to be
consummated at the place of business from which that employee
works.
(b) Out-of-State delivery.--Subsection (a) does not apply if
the tangible personal property sold is delivered by the retailer
to:
20110HB2042PN2804 - 31 -
(1) an out-of-State destination;
(2) a common carrier for delivery to an out-of-State
destination; or
(3) the United States Post Office for delivery to an
out-of-State destination.
(c) Situs for vehicle, aircraft and motorcraft sales.--
(1) This subsection applies to all of the following:
(i) A mobile home, motor vehicle, semitrailer or
trailer, as defined in 75 Pa.C.S. § 102 (relating to
definitions).
(ii) Any aircraft, motorboat or similar item of
tangible personal property required under either Federal
or state law to be registered or licensed.
(2) The sale at retail or use of an item listed in
paragraph (1) shall be deemed to have been completed or used
at the address of the purchaser or user.
(3) The tax due on an item listed in paragraph (1) shall
be paid by the purchaser or user:
(i) to the Department of Transportation at the time
of making application for the issuance of a certificate
of title; or
(ii) if licensing by the Department of
Transportation is not required or obtained, to the
department.
(d) Situs for utility services.--
(1) The sale or use of steam, natural and manufactured
gas and electricity shall be deemed to occur at the service
address in the city where the meter which registers the
service is located, without regard to where the services are
rendered.
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(2) The sale or use of telephone service shall be deemed
to occur at the address where the telephone equipment is
located and to which the telephone number is assigned.
(3) The sale or use of telegraph services shall be
deemed to occur where the telegraph originated.
Section 705. Licenses.
(a) Issuance and renewal.--
(1) The license issued under Article II of act of March
4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,
or a separate license may be issued by the department for the
collection and reporting of the taxes imposed by section 703.
(2) The license is subject to renewal periodically as
required by the department in regulations but in no event
more frequently than once within a five-year period.
(3) No fee shall be charged for either a license or any
renewal.
(b) Assignment.--The license shall be nonassignable.
(c) Liability.--Failure of a person to obtain a license
shall not relieve the person of liability to pay the taxes
imposed by this chapter.
Section 706. Department.
(a) Administration.--The department has the following powers
and duties to administer this chapter:
(1) Promulgate regulations.
(2) Enforce this chapter and regulations under this
chapter and subsection (b).
(b) Existing regulations.--The regulations promulgated under
section 270 of the act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, shall be applicable to the taxes
imposed by section 703 insofar as the regulations are consistent
20110HB2042PN2804 - 33 -
with section 703.
(c) Administrative costs.--The department shall use the
money to cover cost of administration of the tax under Chapter 5
of 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, to cover the cost of administration
of the tax authorized by this chapter; and the department shall
not retain any additional amounts for the costs of collection of
the tax authorized by this chapter.
Section 707. Dedication and disbursement.
(a) Fund.--
(1) At least every two weeks, the department shall pay
to the State Treasurer the money from the tax, interest and
penalties, minus refunds and credits, under this chapter.
(2) The State Treasurer shall credit the money under
paragraph (1) to the fund. During any period prior to the
credit of money, interest earned on money shall be deposited
into the fund.
(3) Money in the fund under paragraph (2) shall be the
property of the city and shall be distributed as provided in
this section.
(4) Pending disbursement to the city, money in the fund
under paragraph (2) shall be invested as is other money in
the custody of the State Treasurer in the manner provided by
law. All earnings received from the investment or deposit of
the money shall be credited to the fund.
(5) Money in the fund under paragraph (2):
(i) shall not lapse at the end of any fiscal year;
(ii) shall not be transferred to any other fund; and
(iii) shall be used exclusively as provided in this
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section.
(b) Disbursement.--By the 10th day of the month, the State
Treasurer shall disburse to the city the total amount of money
which is, as of the last day of the previous month, contained in
the fund under subsection (a)(2).
Section 708. Municipal action.
(a) Adoption of ordinance.--If a city desires to impose the
tax under section 703, the governing body of the city must adopt
an ordinance stating the tax rate. The effective date of the
ordinance must be:
(1) at least 30 days after adoption; and
(2) on the first day of a month.
(b) Notification to department.--A certified copy of a city
ordinance imposing the tax authorized by section 703 shall be
delivered to the department within ten days after the adoption
of the ordinance.
(c) Copy of repeal ordinance.--A certified copy of a repeal
ordinance shall be delivered to the department at least 30 days
prior to the effective date of the repeal.
Section 709. Expiration.
This chapter shall expire July 1, 2016. Notwithstanding the
expiration of this chapter, tax imposed under section 703 on
sales or uses occurring before July 1, 2016, shall be subject to
section 707.
CHAPTER 21
MISCELLANEOUS PROVISIONS
Section 2101. (Reserved).
Section 2102. Effective date.
This act shall take effect immediately.
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