Section 820.703 - Local earned income and net profits taxes; business privilege taxes(a) General exemption.-- If a political subdivision has enacted any tax on the privilege of engaging in any business or profession, measured by gross receipts or on a flat rate basis, earned income or net profits, as defined in the act of December 31, 1965 (P.L. 1257, No. 511), known as The Local Tax Enabling Act, imposed within the boundaries of a subzone, improvement subzone or expansion subzone, the qualified political subdivision shall exempt from the imposition or operation of the local tax ordinances, statutes, regulations or otherwise: (1) The business gross receipts for operations conducted by a qualified business within a subzone, improvement subzone or expansion subzone.(2) The earned income received by a resident of a subzone, improvement subzone or expansion subzone.(3) The net profits of a qualified business attributable to business activity conducted within a subzone, improvement subzone or expansion subzone when imposed by the qualified political subdivision where that qualified business is located. No exemption may be granted for operations conducted, for earned income received or for activities conducted prior to designation of the real property as part of a subzone or expansion subzone.
(b) Additional exemptions.--(1) Paragraph (2) shall apply if a qualified political subdivision has enacted a tax on the privilege of engaging in a profession or business, on wages or compensation, on net profits from the operation of a business or profession or other activity or on the occupancy or use of real property pursuant to any of the following: (i) The act of August 5, 1932 (Sp.Sess. P.L.45, No.45), referred to as the Sterling Act.(ii) The act of March 10, 1949 (P.L. 30, No. 14), known as the Public School Code of 1949.(iii) The act of August 24, 1961 (P.L.1135, No.508), referred to as the First Class A School District Earned Income Tax Act.(iv) The act of August 9, 1963 (P.L. 640, No. 338), entitled "An act empowering cities of the first class, coterminous with school districts of the first class, to authorize the boards of public education of such school districts to impose certain additional taxes for school district purposes, and providing for the levy, assessment and collection of such taxes."(v) The act of May 30, 1984 (P.L. 345, No. 69) , known as the First Class City Business Tax Reform Act.(vi) The act of June 5, 1991 (P.L. 9, No. 6) , known as the Pennsylvania Intergovernmental Cooperation Authority Act for Cities of the First Class.(2) If there is an enactment under paragraph (1), the qualified political subdivision shall provide an exemption, deduction, abatement or credit from the imposition and operation of such local tax ordinance or resolution for all of the following: (i) The privilege of engaging in a business or profession within a subzone, improvement subzone or expansion subzone by a person or qualified business, whether a resident or nonresident of the subzone, improvement subzone or expansion subzone.(ii) Salaries, wages, commissions, compensation or other income received for services rendered or work performed by a resident of a subzone, improvement subzone or expansion subzone.(iii) The gross or net income or gross or net profits realized from the operation of a qualified business to the extent attributable to business activity conducted within a subzone, improvement subzone or expansion subzone.(iv) The occupancy or use of real property located within the subzone, improvement subzone or expansion subzone.(c) to (e) Deleted by 2000, Dec. 20, P.L. 841, No. 119, § 6.(f) Calculation for education subsidy for school district.--In determining the personal income valuation of a school district, the Secretary of Revenue shall exclude any increase in the valuation as defined in section 2501(9.1) of the act of March 10, 1949 (P.L. 30, No. 14), known as the Public School Code of 1949, above the base value prior to the abatement of local taxes in a subzone, improvement subzone or expansion subzone located within the school district to the extent and during the period of time that personal income revenues attributable to the increase in the personal income valuation are not available to the school district for general school district purposes. No exemption under this section may be granted to a person or qualified business prior to designation of the real property as part of a subzone or expansion subzone. (g) Determination of exemption.--For the purposes of determining an exemption under this section, a tax on or measured by any of the following shall be attributed to business activity conducted within a subzone, improvement zone or expansion zone by applying the apportionment factors under section 515(d) : (1) Business gross receipts.(3) Gross or net profits.1998, Oct. 6, P.L. 705, No. 92, § 703, imd. effective. Amended 2000, Dec. 20, P.L. 841, No. 119, § 6, imd. effective; 2002, Dec. 9, P.L. 1727, No. 217, § 6, imd. effective; 2008, July 10, P.L. 1014, No. 79, §5, effective in 60 days [ 9/8/2008].