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Local Tax Reform
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Text
Text of Act 1 of 2005/6
Text of Act 50
of 1998
Text of Act 24 0f 2001
Text of Act 72 of 2004
PowerPoint & other
Act 24 of 2001
Act 50 of 1998
Tax Fairness: video
Why reform local taxes?
Act 24 of 2001
Act 72 of 2004
Homestead Exclusions
Local Tax Options
Farm taxes
Where can I learn more?
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If you have questions about Pennsylvania local taxes and local tax reform, contact Tim Kelsey or your local Penn State Cooperative Extension office |
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Other Links! Penn State Cooperative Extension
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Disclaimer: The Pennsylvania Local Tax Reform website is strictly intended to help you know and understand more about local taxes and the tax options available to jurisdictions in Pennsylvania. The material is general and educational in nature. It is not intended to be legal advice, nor to replace the need for legal advice. If legal advice is what you need, you are encouraged to seek the aid of a competent professional in your area. |
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Webpage and content developed by Tim Kelsey, Professor of Agricultural Economics, Department of Agricultural Economics and Rural Sociology, Penn State University |
@copyright 2007
Page last updated:
07/31/07
Local Tax Rate Limits In Pennsylvania
source: Center for Local Government Services, Taxation Manual. Harrisburg:
Department of Community and Economic Development. 1997.
Note that these limits do not hold for home rule jurisdictions. The school district limits have NOT been updated to account for the new local tax option under Act 50 of 1998.
Table of Contents:
Counties
Third Class Cities
Boroughs
First Class Townships
Second Class Townships
Second, Third and Fourth Class School Districts
| Potential Tax Sources | Legal Limit(1) |
| GENERAL PURPOSE TAX LEVIES | |
| Real Estate: Second Class Counties Second Class A Counties Third-Eighth Class Counties |
25 mills 30 mills 25 mills(2) |
| Personal Property | 4 mills |
| Per Capita: Fourth-Eighth Class counties only Occupation |
$5 |
| SPECIAL PURPOSE TAXES | |
| Debt Service | no limit |
| Lease Rental Payments to Authorities Third-Eighth Class Counties |
10 mills |
| Institution Districts Second Class Counties Second Class A Counties Third Class Counties |
10 mills 15 mills 10 mills |
| Parks and Playgrounds Third-Eighth Class Counties Second and Second Class A Counties |
no limit 3 mills |
| Libraries | no limit |
| Roads and Bridges | 6 mills |
| Memorial Hall | no limit |
| Tuberculosis Hospital | no limit |
| Bridges | no limit |
| Community Colleges | (3) |
| Hotel Room Rental Second Class and Second Class A Counties |
5 percent |
| Municipalities Financial Recovery Program | no limit |
1. Counties adopting home rule charters may set rates higher than the limits provided in state law for property taxes and for personal taxes levied on residents. They may not create new subjects of taxation. Home rule counties as of July 1, 1992 are: Delaware, Erie, Lackawanna, Lehigh and Northampton.
2. Five additional mills available with court appeal.
3. Local sponsors may levy any tax permitted by law to support a community college. The tax cannot exceed 5 mills of the market value of real estate, except for first class cities and first class school districts where it cannot exceed one mill of the market value of real estate.
| Potential Tax Sources | Legal Limit(4) |
| GENERAL PURPOSE TAX LEVIES | |
| Real Estate | 25 mills(5) |
| Residence | $5 |
| License | $100 |
| Act 511 Taxes Per Capita Occupation (Flat Rate) Occupation (Millage) Occupational Privilege Earned Income Deed Transfer Mechanical Devices Amusement Business Gross Receipts
|
$10 $10 no limit $10 1 percent 1 percent no limit 10 percent 1 mill wholesale 1 ½ mills retail no limit other businesses |
| SPECIAL PURPOSE TAXES | |
| Bonded Debt and Sinking Fund | no limit |
| Recreation | no limit |
| Library | no limit |
| Shade Trees | 1/10 mill |
| Support Bureau of Charity | 10 mills |
| Community Colleges | (6) |
| Distressed Pension System Recovery Program | no limit |
| Municipalities Financial Recovery Program | no limit |
4. Home rule municipalities may set rates higher than the limits provided in state law for property taxes and for personal taxes levied on residents. They may not create new subjects for taxation. Third class cities adopting home rule charters as of July 1, 1992 include: Carbondate, Chester, Clarion, Coatsville, Farrell, Franklin, Greensburg, Hermitage, Lebanon, McKeesport, Warren and Wilkes-Barre.
5. Five additional mills available with court appeal.
6. Local sponsors may levy any tax permitted by law to support a community college. The tax cannot exceed 5 mills of the market value of real estate, except for first class cities and first class school districts where it cannot exceed one mill of the market value of real estate.
| Potential Tax Sources | Legal Limit(7) |
| GENERAL PURPOSE TAX LEVIES | |
| Real Estate* | 30 mills(8) |
| Occupation | 30 mills(8) |
| Act 511 Taxes* Per Capita Occupation (Flat Rate) Occupation (Millage) Occupation Privilege Earned Income Deed Transfer Mechanical Devices Amusement Business Gross Receipts
|
$10 $10 no limit $10 1 percent 1 percent no limit 10 percent 1 mill wholesale 1 mill retail no limit other businesses |
| SPECIAL PURPOSE TAXES | |
| Debt Interest and Sinking Fund* | no limit |
| Pensions and Retirement* | ½ mill |
| Shade Trees* | 1/10 mills |
| Street Lighting* | 8 mills |
| Library* | no limit |
| Special Road Fund | 5 mills |
| Recreation* | no limit |
| Fire Equipment & Firehouses | 3 mills(9) |
| Gas, Water, Electric Light(10) | 8 mills |
| Firehouse, Lockup or Municipal Building4 | 2 mills |
| Community College* | (11) |
| Debt Payment(12) | no limit |
| Ambulance and Rescue Squads | ½ mill(9) |
| Distressed Pension System Recovery Program* | no limit |
| Municipalities Financial Recovery Program* | no limit(12) |
7. Home rule boroughs may set rates higher than the limits provided in state law for property taxes and for personal taxes levied on residents. They may not create new subjects of taxation. Home rule boroughs as of July 1, 1992 are: Bellevue, Bethel Park, Bradford Woods, Bryn Athyn, Cambridge Springs, Chalfont, Edinboro, Green Tree, Kingston, Monroeville, Murrysville, Norristown, State College, Tyrone, Whitehall and Youngsville.
8. Five additional mills available with court approval.
9. Higher rate may be approved by voters in referendum.
10. Must be approved by voters in referendum.
11. Local sponsors may levy any tax permitted by law to support a community college. The tax cannot exceed 5 mills of the market value of real estate, except for first class cities and first class school districts where it cannot exceed one mill of the market value of real estate.
12. Levied only on court order.
*These taxes are also authorized for the incorporated town of Bloomsburg, 1972 P.L. 1441, No. 320.
| Potential Tax Sources | Legal Limit(13) |
| GENERAL PURPOSE TAX LEVIES | |
| Real Estate | 30 mills(14) |
| Occupation | 30 mills(14) |
| Act 511 Taxes Per Capita Occupation (Flat Rate) Occupation (Millage) Occupation Privilege Earned Income Deed Transfer Mechanical Devices Amusement Business Gross Receipts
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$10 $10 no limit $10 1 percent 1 percent no limit 10 percent 1 mill wholesale 1 ½ mill retail no limit other businesses |
| SPECIAL PURPOSE TAXES | |
| Firehouses and Equipment | 3 mills(15) |
| Shade Trees | 1/10 mills |
| Municipal Building | no limit |
| Debt Service | no limit |
| Pensions and Retirement | ½ mills |
| Fire and Water District | 2 mills |
| Permanent Improvement Fund | 5 mills |
| Recreation | no limit |
| Library | no limit |
| Community Colleges | (16) |
| Ambulance and Rescue Squads | ½ mill(15) |
| Distressed Pension System Recovery Program | no limit |
| Municipalities Financial Recovery Program | no limit |
14. Five additional mills available with court appeal.
15. Higher rate may be approved by voters in referendum.
16. Local sponsors may levy any tax permitted by law to support a community college. The tax cannot exceed 5 mills of the market value of real estate, except for first class cities and first class school districts where it cannot exceed one mill of the market value of real estate.
| Potential Tax Sources | Legal Limit(17) |
| GENERAL PURPOSE TAX LEVIES | |
| Real Estate | 14 mills(18) |
| Occupation | 14 mills(18) |
| Act 511 Taxes Per Capita Occupation (Flat Rate) Occupation (Millage) Occupation Privilege Earned Income Deed Transfer Mechanical Devices Amusement Business Gross Receipts |
$10 $10 no limit $10 1 percent 1 percent no limit 10 percent 1 mill wholesale 1 ½ mill retail no limit other businesses |
| SPECIAL PURPOSE TAXES | |
| Municipal Building | ½ general rate |
| Firehouses and Equipment | 3 mills(19) |
| Recreation | no limit |
| Debt Service | no limit |
| Permanent Improvement Fund | 5 mills |
| Road Machinery Fund | 2 mills |
| Library | no limit |
| Ambulance and Rescue Squads | ½ mill(19) |
| Fire Hydrants for Water District | apportioned cost |
| Fire Hydrants for Township (20) | 2 mills |
| Street Lights for District(21) | apportioned cost |
| Street Lights for Township(21) | 5 mills |
| Police Protection District(21) | no limit |
| Debt Payment(22) | no limit |
| Community Colleges | (23) |
| Municipalities Financial Recovery Program | no limit(22) |
| Distressed Pension System Recovery Program | no limit |
17. Home rule boroughs may set rates higher than the limits provided in state law for property taxes and for personal taxes levied on residents. They may not create new subjects of taxation. Second class townships under home rule charters as of July 1, 1992 are: Chester, Elk (Chester County), Ferguson (Centre County), Hampton, Hanover (Lehigh County), Horsham, Kingston, Middletown (Delaware County), Peters (Washington County), Pine, Richland (Allegheny County), Tredyffrin, Upper Providence (Delaware County), West Deer and Whitemarsh.
18. Five additional mills available with court appeal.
19. Higher rate may be approved by voters in referendum.
20. Requires approval of voters in referendum.
21. Requires petition of majority of landowners.
22. Levied only on court order.
23. Local sponsors may levy any tax permitted by law to support a community college. The tax cannot exceed 5 mills of the market value of real estate, except for first class cities and first class school districts where it cannot exceed one mill of the market value of real estate.
K. SECOND, THIRD
AND FOURTH CLASS SCHOOL DISTRICTS
(IF THEY DO NOT ADOPT ACT 50 OF 1998)
| Potential Tax Sources | Legal Limit |
| GENERAL EDUCATION PURPOSES | |
| Real Estate | 25 mills(24) |
| Per Capita | $5 |
| Act 511 Taxes Per Capita Occupation (Flat Rate) Occupation (Millage) Occupational Privilege Earned Income Deed Transfer Mechanical Devices Amusement Business Gross Receipts
|
$10 $10 no limit $10 1 percent 1 percent no limit (25) 1 mill wholesale 1 ½ mills retail no limit other businesses |
| SPECIAL PURPOSE TAXES | |
| Debt Service(26) | no limit |
| Parks and Playgrounds | 2 mills |
| Capital Reserve Fund | 3 mills |
| Community Colleges | (27) |
24. Additional millage may be levied to pay salaries and debt service charges for school buildings.
25. Amount collected cannot exceed the amount collected in the year ending June 30, 1997.
26. Levied only by court order.
27. Local sponsors may levy any tax permitted by law to support a community college. The tax cannot exceed 5 mills of the market value of real estate, except for first class cities and first class school districts where it cannot exceed one mill of the market value of real estate.