Rep. Dave Hickernell (R-98) would like to remind residents of a Primary Election ballot question regarding a possible reduction in their school property taxes in exchange for an increased earned income or personal income tax.
The questions that appear on the ballot at the May 15, 2007, Primary Election will vary based on a person’s school district of residence.
Act 1, passed by the House in the summer of 2006, required school districts across the state to create Local Tax Study Commissions to provide information and recommendations to school board officials regarding the level of property tax relief and the type of tax shift that should be put before the voters in their particular district.
In writing the ballot question, school board officials have already decided, based on input by their local tax study commission, whether residents will be voting on an increased earned income tax, or a personal income tax.
The difference between earned income tax and personal income tax is that earned income tax is levied only on residents' earned income, such as wages and salaries. Unearned income such as interest, dividends, pensions and Social Security is exempt from the tax.
A personal income tax is levied on the same taxable base as the Pennsylvania Personal Income Tax. This taxable base includes income from wages, interest, dividends, net income or loss from the operation of a business, profession or farm, the net gain or loss from the sale, exchange or disposition of property, the net income or loss from rent, royalties, patents and copyrights, income from estates or trusts and certain gambling and lottery winnings. It does not include pensions or Social Security.
If a majority of voters approve the referendum, homeowners whose properties were approved as a homestead will be eligible for property tax relief. Homesteads are owner-occupied properties, not rentals, investment properties or businesses.
Homeowners who have not filed a homestead application in the last three years should contact the county assessment office to check on their homestead status or to receive an application. The Lancaster County assessment office can be reached at 717-299-8381, and the Dauphin County assessment office can be reached at 717-780-6101.