A major government reform victory for the Foundation, its investors and partners, and most importantly, businesses and taxpayers, was the signing into law of Senate Bill 1063, which reforms and streamlines the Earned Income Tax collection system.

Team Pennsylvania Foundation had the privilege of joining with an unprecedented public / private partnership to successfully advocate for streamlining the collection of Earned Income Tax in Pennsylvania. The Foundation celebrated this collaborative effort which greatly benefits Pennsylvania businesses, taxpayers, municipalities and school districts across the commonwealth.

Until the law was signed, it took 560 tax collectors to collect and distribute nearly $2 billion in annual earned income tax revenue destined for Pennsylvania municipalities and schools. It was estimated that $237 million annually in Earned Income Tax revenue did not arrive at the municipality or school district where it rightfully belongs due to the complexity and inefficiency of the system.

The reduction of collectors from 560 to 69 will result in a streamlined collection system and tax revenues transferred more efficiently and expediently. Standardized forms and procedures required by the legislation will add to consistent and uniform collection.

Since the bill was signed into law, the Department of Community and Economic Development has moved the consolidation forward by publishing information regarding the 69 tax collection districts, creating maps identifying county and school district boundaries, conducting educational webinars and workshops around the state, and publishing an “EIT Best Practices Report” for local officials.

With the new law going into effect on Jan. 1, 2012, companies must be in compliance with the provisions of Act 32. Here is a link to a training video that explains what businesses need to know about the new law.

DCED has also posted a wealth of information on Act 32 on their website at newPA.com.

Here is additional Team PA coverage on Act 32.