The bill amends the Local Tax Enabling Act of December 31, 1965, to modify provisions related to local taxing authorities' ability to levy taxes on business activities. Key changes include the deletion of specific criteria for local taxing authorities to impose a tax on the privilege of doing business, as well as the removal of restrictions on levying a mercantile or business privilege tax on gross receipts. Additionally, the bill introduces a new section that mandates the expiration of all mercantile, business privilege, and other business gross receipts taxes by December 31, 2025, prohibiting any political subdivision from levying such taxes after this date.

Furthermore, the bill outlines that a city of the second class may enact ordinances to implement a payroll tax, which will replace the existing mercantile tax and adjust the business privilege tax rates over a specified timeline. The act also sets limitations on the rates of specific taxes that can be levied by political subdivisions, ensuring that these rates do not exceed certain thresholds. The immediate effect of the addition of the new section regarding the expiration of business gross receipts tax is stipulated, while the remainder of the act will take effect on December 31, 2026.

Statutes/Laws affected:
Printer's No. 1886 (Jun 10, 2025): P.L.1257, No.511