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§ 19-1804. Authorization of Net Income Tax. 368
(1) The following words shall be construed in this Section to have the following meanings, except where the context clearly indicates otherwise:
(a) Board means the Board of Education of the School District of Philadelphia.
(b) Collector means the Commissioner of School Revenue of the School District of Philadelphia.
(c) Net Income shall be determined after provision of all allocable and reasonable costs and expenses paid in the production of income, but no provision shall be made in this determination for any taxes. Net Income shall not be treated as "received or credited" from an S corporation (as defined in 26 U.S.C. § 1361) for purposes of subsection 19-1804(2)(a) until actually distributed. 369
(d) Person means any individual other than a corporation who is beneficially entitled to income.
(e) Tax Year means the 12-month period from January 1 to December 31, 1969 for the purposes of the tax imposed for Fiscal Year 1970.
(e.1) Tax Year means the 12-month period from January 1 to December 31. 370
(2) Imposition of the Tax. 371
(a) Except as excluded in subsection (3), the Board is authorized to impose a tax for the following Fiscal Years for general school purposes, on every person who is a resident of the School District of Philadelphia on the net income from the ownership, lease, sale or other disposition of real property and tangible and intangible personal property, received or credited to said person during the corresponding Tax Year as set forth in the table below, including the net income paid to any beneficiary of a trust or estate and the income of any trust or estate and of which such person is the substantial owner, at the following rates, provided that, in the event the rate of any tax imposed hereunder is determined to exceed any limitation imposed by statute, it is the intent of this Ordinance to impose such tax at the maximum permissible rate:
For Fiscal Year(s)
On Net Income Received or Credited During Tax Year(s)
1970 through 1976 inclusive
1969 through 1975 inclusive
1977 through 1983 inclusive
1976 through 1982 inclusive
1984 through 1996 inclusive
1983 through 1995 inclusive
2007 and thereafter
The Tax Year Prior to the Fiscal Year
The rate at which taxes are imposed on residents under subsection 19-1502(1)(a) ("Tax on Salaries, Wages, Commissions and Other Compensation") plus the rate at which taxes are imposed under Section 19-2803 ("Imposition of Pennsylvania Inter- governmental Cooperation Authority Tax on Wages and Net Profits") in effect on July 1 of the Tax Year Prior to the Fiscal Year 372
(b) A person who was or is a resident of the School District of Philadelphia for a period less than a full tax year shall be liable for the tax on net income received or credited to him during such period.
(3) Exclusions. There shall be excluded from the tax imposed by this Section the following income:
(a) All interest on public loans issued by this Commonwealth or the United States, and public loans and obligations of any county, city, borough, town, township, school district, and incorporated district of this Commonwealth, and bonds and obligations of bodies corporate and public of this Commonwealth known as municipal authorities.
(b) Interest and dividends received or credited on savings deposits and savings certificates issued by any private bank, building and loan association, savings and loan association, credit union, savings bank, bank and trust company, or trust company. For purposes of this subsection (3)(b), a savings certificate means an instrument designated as a savings certificate or a savings bond and which either according to the rules of the issuer in effect at the time the instrument is issued or when this act is approved, whichever is later, can only be originally issued to an individual or a non-profit organization, or is non-negotiable.
(c) Gains realized upon the sale, exchange or other disposition of tangible or intangible personal property or of real estate; provided, that the property which produced such gains has been owned by the resident for a period of more than six months prior to the date of sale, exchange or other disposition.
(d) Income from carrying on or exercising for profit of any trade, business, profession or enterprise which is subject to the Net Profits Tax or Wage Tax (Philadelphia Code Chapter 19-1500 et seq.).
(e) Old age, retirement and pension payments.
(f) Sick pay and disability benefits.
(g) Benefits arising under the Workmen's Compensation Act and Unemployment Compensation Act.
(h) Active military service pay.
(i) Bonuses paid by any governmental unit for active military service.
(j) Death benefits.
(k) Proceeds from insurance policies.
(l) Gifts and bequests.
(m) Compensatory damages arising from any claim or cause of action.
(4) Returns and Payment of Tax.
(a) The tax as imposed by this Section and levied by the Board shall be due and payable by April 15 of the fiscal year for which the tax is imposed. 373
Added, 1969 Ordinances, p. 1082; amended, 1980 Ordinances, p. 12.
Added, 1970 Ordinances, p. 740.
Amended, Bill No. 080526 (approved June 27, 2008).
Amended, 1970 Ordinances, p. 740; amended, 1975 Ordinances, p. 1571.