Pennsylvania has enacted legislation transferring educational tax credits available against the personal and corporate income, capital stock, bank and trust shares, title insurance companies shares, insurance premiums, and mutual thrift institutions taxes from the Tax Reform Code to the Public School Code and allowing certain school districts to levy a payroll tax. Specifically, a school district in a financially distressed municipality is now allowed to levy a payroll tax under the Local Tax Enabling Act. Each financially distressed municipality in the district must also levy a payroll tax, and the school district must have already levied a mercantile or business privilege tax on a flat rate or millage basis. The tax rate cannot exceed a rate sufficient to produce revenue equal to revenues collected from the mercantile or business privilege tax in the preceding year. A school district that levies a payroll tax may not levy a mercantile or business privilege tax in the future. (H.B. 1606, Laws 2016, effective July 13, 2016.)
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