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Solanco School District July 24 th 2001

Solanco School District July 24 th 2001. A Hearing for Act 24 of 2001 Occupational Tax / Earned Income Tax Resolution & Referendum Questions. Introduction / Overview. Why now, Why July 24 th ? Timelines; 11/6, 8/8, 8/6, Hearing, 3 weeks of Advertising Act 24 signed into law June 22, 2001

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Solanco School District July 24 th 2001

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  1. Solanco School DistrictJuly 24th 2001 A Hearing for Act 24 of 2001 Occupational Tax / Earned Income Tax Resolution & Referendum Questions

  2. Introduction / Overview • Why now, Why July 24th? • Timelines; 11/6, 8/8, 8/6, Hearing, 3 weeks of Advertising • Act 24 signed into law June 22, 2001 • Board Action required to place Question on the Ballot…The Hearing Purpose • Citizen Action required (ie. voting) to initiate any change, a simple majority

  3. Earned Income Tax (EIT) Currently 1/2 of 1% to the District and ½ of 1% to the Township for a total of 1% (1% is the legislative cap) Successful referendum to eliminate the OAT will raise EIT to a total of 1.6% Occupational Assessment Tax (OAT) Based on two factors: (1) Job title classification out of the County Assessment office. (2) District millage Rate (1100 mills) Two Tax Options In QuestionBoth and either / or

  4. Occupation Tax Overview • Utilized to offset reliance on Real Estate Tax millage ( approximately 1.7 mills or 22%) • Occupation tax revenue is estimated at $2,361,805 or .60% • Amount paid is based on individual job title and millage rate……not income (by statute) • Typically paid in a lump sum with fall tax bills • By design, taxes those who are working

  5. Earned Income and Net Profits Tax • Currently the 1.0% tax collected by employers via payroll deductions each pay….or remitted quarterly or annually by schedule C and F filers…if voters indicate they want to change, the rate will be 1.6% • Amount of tax paid is based on Earned Income • Paid at the same percentage rate by all • By design, taxes those who are working.

  6. Occupation tax would not be levied July 1, 2002. The district could not re-instate the occupation tax at a later date Any and all delinquents from prior levies are still due and collectible. The Earned Income Tax rate for Solanco residents would change July 1, 2002 to 1.6% April 15, 2003 first filing with split rate April 15, 2004, first filing with full rate If the voters say Yes….

  7. If the voters say No….. • Occupational Assessment Tax and Earned Income systems would remain in place

  8. Employer to withhold a little per pay (most) Taxes paid are based on Income (fairness issue) Some will pay less Some will pay more Make more, pay more Make less, pay less Quarterly filing for self-employed LCTCB April 15th vs July 1 OAT bill Part-Time; Retirees Individual Pros and Consto add additional EIT and eliminate the OAT

  9. Dramatic Cash Flow change Major changes from one system to another Initially, the District receives the same amount of money….individuals pay different amounts Communications with citizens and voters Employer cooperation LCTCB processes… If no Resolution…. If referendum passes…. If referendum fails…. District Concerns / Issues

  10. Re-Cap and Summary • Board Hearing July 24th • Board Resolution for August 6th...File with the County Board of Elections August 8th • Voters decide November 6th

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