IssuesPA

November 3 2010

Senate Bill 1063 became Act 32 when Governor Rendell's signature in July 2008. Across the Commonwealth, county governments have been taking steps to chose a single collector from among the sometimes dozens that previously divvied up the collections. And even with multiple agencies, or perhaps because of it, in 2007 Pennsylvania Economy League Southwestern PA estimated that $237 million was going uncollected (analysis below).

Additionally, the legislation reduces administrative costs for municipalities and school districts through standardized collection practices, coordination, reporting, and accountability among and between jurisdictions and collectors.

An example: York County tax collectors for its 72 boroughs and townships

What is the Earned Income Tax?

Earned income tax is levied on wages, salaries, commissions, net profits from the operation
of a business, or other compensation. Most political subdivisions in Pennsylvania, excluding
counties but including all cities, boroughs, towns, and townships (collectively, municipalities),
and all school districts other than the Philadelphia School District may, by ordinance or
resolution, enact an earned income tax. Except for the City of Philadelphia and the Pittsburgh
School District, whose authority comes from separate legislation, the authority to impose this tax
arises under the Local Tax Enabling Act, Act 511 of 1965 (Act 511). – Source: Pennsylvania
Department of Community and Economic Development

Read more:

Taxing step to efficiency. Scranton Times-Tribune, 11/1/2010

Earned Income Tax reforms continue. Pittsburgh Tribune-Review, 2/22/2010

Rendell signs law reducing number of tax collectors in PA. Philadelphia Business Journal, 7/2/2008

Reducing government fragmentation through consolidation of the Earned Income Tax system. IssuesPA.org, 6/1/2008

AttachmentSize
PEL-SW EIT loss analysis 2007.pdf168.19 KB
DCED Analysis EIT 2004.pdf1.2 MB