Newtown News of Interest
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Penndel Enacts New 1% Earned Income Tax to Boost Borough Revenue

Penndel Enacts New 1% Earned Income Tax to Boost Borough Revenue | Newtown News of Interest | Scoop.it

Penndel will start collecting a 1% earned income tax this year after the ordinance allowing the tax was approved by borough council late in 2020.

At the same time, the borough council as part of the $2.6 million 2021 budget cut property taxes three mills, from 30.8 to 27.8 mills. That will be $63 less in annual property taxes for a resident with a property assessed at the borough average of $20,906.

The earned income tax will be assessed to both residents and non-residents at 1% of earned income and net profits, according to a news release from Keystone Collections Group, the company that collects the EIT for municipalities and school districts in Bucks County.

Anyone earning less than $12,000 a year will be exempt from the tax.

"While this tax type is new to Penndel, the majority of residents already pay the local EIT to the community they work in, and now the tax funds will go directly to Penndel," Keystone officials said.

johnmacknewtown's insight:

This is an example of how Newtown's revenue from EIT is subject to decrease when neighboring municipalities - including Penndel to a small degree - institute their own EIT. Although, in this case, the impact is probably minimal given the fact that very few - if any - of the 2,885 residents of Penndel are employed in Newtown. 

 

[I've learned that the estimated 2021 loss of Non-Resident EIT for Newtown do to this about $12,700.]

 

I like the fact that anyone earning less than $12,000 a year will be exempt from the tax. I wonder if Newtown has the same policy. I'll have to ask.

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Newtown News of Interest
These Scoops are excerpts from articles published in local newspapers and other sources that may be of interest to Newtown area residents. Please click on the "From" link to access the full original article. Any opinions and "insights" appended to these article summaries are solely those of John Mack and do not represent the opinions of any other person or entity.
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