Pennsylvania Statutes Title 24 P.S. Education § 6-689. Payroll tax

(1) Each municipality within the school district levies a payroll tax pursuant to section 123(c) and (d) of the act of July 10, 1987 (P.L. 246, No. 47),  2 known as the “Municipalities Financial Recovery Act.”

(2) The school district levied a mercantile or business privilege tax on a flat rate or millage basis in the year that the municipality filed a petition to levy a payroll tax pursuant to section 123(c) of the “Municipalities Financial Recovery Act.”

(1) The tax authorized under subsection (a) may be imposed at a rate not to exceed a rate sufficient to produce revenues equal to revenues collected from the levy of a mercantile or business privilege tax by the school district under Chapter 3 of “The Local Tax Enabling Act”  3 in the last full fiscal year preceding the levy of the payroll tax. A school district shall not be required to begin the levy of the payroll tax on the first day of the fiscal year. Except as provided under clause (2), a school district may levy a payroll tax in any subsequent year at a rate not to exceed the rate initially authorized under this clause.

(2) In the event that the rate imposed under clause (1) fails to produce the revenues projected in the first full year of the collection of a payroll tax, a school district may amend the rate imposed not to exceed a rate that is sufficient to produce revenues equal to the revenues collected as a result of the mercantile or business privilege tax in the final full fiscal year it was levied. A school district may levy the payroll tax in any subsequent year at a rate not to exceed the adjusted rate authorized under this clause.