State Senator John Blake’s bill would give 65 counties the option of levying a 1 percent sales tax in addition to the current 6 percent state sales tax. Philadelphia and Allegheny County already have a local sales tax.
Under the bill, the sales tax revenue would be split three ways: 50 percent to the county, 40 percent to municipalities based on tax effort and relative population and 10 percent to a “Municipal Collaborative Efforts Fund,” overseen by a board of local municipal officials, to provide grants for cost-sharing efforts involving equipment, road maintenance, fire protection and uniform code construction enforcement. The measure sets parameters for how the additional sales tax revenue would be spent. Municipalities would use at least 60 percent of any revenue for property tax relief or offsetting the impact of tax-exempt property and the rest for general fund purposes. Counties would use at least 60 percent of the revenue for property tax relief and eliminating nuisance taxes and the rest for the general fund.
In a method somewhat similar to the new county-level Marcellus Shale impact fee, counties would have to opt in through formal action to levy the sales tax. If a county didn’t act, municipalities representing 60 percent of the county’s population could adopt ordinances to petition for a sales tax, and only those municipalities that adopt ordinances would be eligible for sales tax revenue.