HARRISBURG, Pa. (KYW Newsradio) — A bill that could bring significant changes to how the Philadelphia wage tax is levied on certain remote workers is on its way to the Pennsylvania House after passing the state Senate largely on party lines.
People who don’t live in Philadelphia but who work for an employer based in the city are required to pay Philadelphia’s 3.4% non-resident wage tax, even if they work remotely.
Under Bucks County Republican Sen. Frank Farry’s legislation, a remote worker would still pay the city wage tax, but Philadelphia would have to send some of that money back to the municipality where the employee is working.
Prime sponsor, Bucks County Republican Frank Farry calls it a matter of fairness.
“To tax people who are not in the city of Philadelphia — to actually tax them — who are not availing themselves to that police protection, or the need for EMS or driving on the municipal roads — to tax them for those services, when they're not utilizing the services, further highlights the lack of tax fairness,” Farry said.
“We're just asking for 1% of that, or whatever each local governments enacted, a half a percent, just to be remitted back to those home municipalities.”
Philadelphia and Montgomery County Democrat Sen. Vince Hughes said the bill was slammed through the Senate in just six days, including a weekend.
“This is not a naming of a road, naming of a bridge. This is not a matter … that is simple in nature. This is a potential $200 million hit to the economic driver of the commonwealth of Pennsylvania, the city of Philadelphia.”
Farry says the $190 million figure from Philadelphia is inflated because different municipalities have different tax rates.
The bill passed the Senate 29-21, with Bucks County Democrat Sen. Steve Santarsiero joining all Republicans in favor. It heads to the House, where its future is uncertain, with a slim Democratic majority.
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