Munroe proposes sending Philly wage tax to home communities of commuters

WARMINSTER, May 5 – State Rep. Brian Munroe, D-Bucks, introduced legislation today requiring the City of Philadelphia to reimburse neighboring tax jurisdictions with funds from its Wage Tax on commuters to support their hometowns, too.

Philadelphia imposes the Wage Tax on salaries, wages, commissions and other compensation paid to employees commuting to a Philadelphia employer, which is why it is often referred to as a commuter tax. Unlike local taxes in other taxing jurisdictions, however, none of the non-resident Wage Tax is returned to the non-resident’s home municipality.

A Senate companion bill to Munroe’s proposal passed in that chamber this week.

“Because of the Wage Tax, many surrounding suburban areas are losing significant tax revenue to support their police, fire, EMS and schools,” Munroe said. “My legislation would spread revenue across the region, which is home to many commuters and where their contributions ought to be shared.”
House Bill 1134 would require Philadelphia to reimburse surrounding tax jurisdictions that impose an earned income tax at a rate equivalent to what would have been collected from commuting workers of their respective boroughs and townships. This legislation would ensure that Philadelphia’s tax collection practices mirror those of all other taxing jurisdictions in Pennsylvania and that surrounding entities are receiving their fair share of revenue to serve their communities.

“Commuters have been the lifeblood for Philadelphia’s budget for decades, but this leaves little else for communities that are home to the people responsible for paying the tax,” Munroe said. “We could better invest that money along the complete region, which is wholly responsible for the quality of life and safety of our region’s residents.

“I look forward to this legislation’s progress – whether through Senate Bill 671 or my companion House introduction.”