The Occupational Privilege Tax is Dead...

[rabid_nerd]

...Long Live the Emergency and Municipal Services Tax?

http://www.herbriede.com/blog/

(This is from my perspective as a small borough councilman. Just thought I'd post one for the heck of it...)

Bleh..

The PA House and Senate just passed HB197, an attempt to help Pittsburgh out of it's financial woes but actually a terrible failure of state government.

I actually agree with State Rep. Maitland's NO vote on concurrence in Senate Amendments, and I am ashamed that my party provided the majority of the votes for this poorly written bill.

First, my laundry list...

1. Changing the range of the taxing authority from a maximum of $10 to a minimum of $10 will require those municipalities that only tax at $5 to either raise to $10 per annum or eliminate altogether.

2. I wanted the elimination of the occupational privilege tax, and in fact, this has been accomplished... The tax has been RE-NAMED the "Emergency and Municipal Services Tax" and is now restricted in use by municipalities for "Police, Fire and/or Emergency Services," "Road Construction and/or Maintenance," and, "Reduction in Property Taxes."
This means more bureaucracy and paperwork making sure these funds do not pay the secretary and treasurer's salary instead of the public works employees.

3. "This act shall take effect for tax years commencing on or after January 1, 2005" - bad idea. For municipalities that have a $5 occupational privilege tax (see point #1), this bill could make those taxes invalid. Note that a School District's $5 should count towards the $10 minimum, but there are some places where the School District has eliminated the Occupation Privilege tax and the municipality remains at $5. I need to look at my Adams County graph to find one around here..

4. "This act shall take effect immediately" - bad idea, see points 1 and 3.

While I understand the need to put controls on runaway use of new taxation and limiting such to specific categories, I have a big problem with the wholesale, overnight changes to a base tax for not only McSherrystown's budget, but so many other's as well.

How many questions will arise from the passing of this bill, and will the state put municipalities minds at ease?

[MercutioATC]

1. #1 "intestate"

"Intestate" means of or relating to a person who has died without a will. so it astually might apply here.

[rabid_nerd]

2. touche

thanks

Notice I had a ? on that...

I didn't take the 10 seconds to Google that part..

[MercutioATC]

5. My sister's a partner in a law firm...

...it comes naturally...

[Momof1]

3. Is this suppose to be the Occupational Assesment Tax?

I'm confused I thought that tax was completely done away with a few years ago?

:shrug:

[rabid_nerd]

4. No..

There is still the authority by School Districts to enact and collect Occupational Assesment Taxes - our School District just eliminated ours on this ballot, in fact.

They MUST eliminate them IF they opt-in for proceeds from the slot machine/property tax legislation.

However, if a School District does not opt-in, they are still allowed to collect Occupational Assesment taxes.

Occupational Assesment taxes are based by your Occupation Classification - for instance my job title pegged me at a "400", and I got a $400 bill in the mail every year.

Occupational Privilege taxes were the one-off $10 maximum tax per year, per person (if you get two jobs, you either showed your proof to your second job that you already had it taken out or applied to the county for a refund).

Occupational Privilege taxes have been renamed by this act to Emergency and Municipal Services taxes, and may increase to a one-off of up to $52 per year instead of $10 per year.

I would prefer eliminating this tax. In my opinion, despite allowing for exemption for low income that I bet is rarely applied for, we would better be served by simply authorizing a non-resident earned income tax that doesn't have to be remitted to the home municipality.

You see, the Occupational Privilege and this new tax are both taxes that are collected and kept by where you work. Earned income tax is remitted to where you live.

Even though this tax is a nusiance tax, because it's a lump sum tax once a year out of your pay, there's little choice because of how the state authorizes the boroughs and townships to get revenue to pay for services.

So, since the boroughs and cities needed more money to pay for services (police, street) for people that worked in the town and lived outside the town, they had to find a way to raise taxes on the people that worked there.

THIS APPLIES TO MOST OF PA AND NOT TO THOSE LIVING OR WORKING IN PHILLY OR PITTSBURGH OR OTHER "HOME RULE" COMMUNITIES.

http://www.inventpa.com/default.aspx?id=145

Check out the Borough Council, Mayors, Township Supervisor and Taxation handbooks... they're all good reads...!!!

Finally, I MAY BE WRONG ABOUT SOMETHING. Always double check.