An Act amending the act of August 5, 1932 (Sp.Sess., P.L.45, No.45), referred to as the Sterling Act, further providing for remittance by a city of the first class to a nonresident's resident municipa . . .lity and school district.
Summary
HB352 amends Pennsylvania’s Sterling Act, which governs certain additional taxes imposed by cities of the first class, to require a city of the first class that levies a nonresident wage tax to remit to the worker’s resident municipality and school district an amount equal to the tax those local governments impose on earned income and net profits. In practical terms, the bill creates a pass-through mechanism for local tax revenue collected from nonresidents, tying the remittance amount to the resident locality’s own earned income and net profits tax rate.
The bill would change how local wage tax revenue is distributed when a nonresident works in a first-class city, most notably Philadelphia, by directing funds back to the worker’s home municipality and school district. It would affect the fiscal relationship among first-class cities, suburban municipalities, and school districts, and could reduce the net revenue retained by the taxing city while increasing revenue for resident local governments. The act would take effect 60 days after enactment.
Impact
HB352 would amend the Sterling Act to impose a new statutory remittance obligation on first-class cities that tax nonresident wages. The change would affect local tax administration and revenue allocation by requiring the city to transfer an amount equal to the resident municipality’s and school district’s earned income/net profits tax to those jurisdictions, altering the distribution of local tax receipts under existing Pennsylvania law.
Sentiment
No committee transcript or vote record is provided, so there is no direct evidence of debate, support, or opposition in the available materials. Based on the bill text alone, the proposal appears technical and revenue-focused rather than ideological, but it would likely draw interest from municipalities and school districts affected by local tax sharing.
Contention
The main point of contention is likely to be fiscal: first-class cities may object to losing revenue or to the administrative burden of remitting taxes to other local governments, while resident municipalities and school districts would likely support the measure as a way to capture revenue from their residents who work in the city. Another possible issue is whether the remittance formula is equitable or creates complications when local tax rates differ.
Further providing for title of act; providing for local taxes in cities of the first class, for prohibition of tax on certain individuals and for reimbursement of taxes; and making repeals.
In taxation by school districts, further providing for definitions, providing for disposition of data center property tax revenue and further providing for school district tax notices.
In senior citizens property tax and rent rebate assistance, further providing for definitions and for filing and payment of claim. Amending the act of August 26, 1971 (P.L.351, No.91), known as the State Lottery Law, in State Lottery, further providing for disposition of funds.
In tax relief in cities of the first class, further providing for supplemental senior citizen tax reduction; and, in senior citizens property tax and rent rebate assistance, providing for income calculation and further providing for property tax and rent rebate.