HARRISBURG – The Senate today approved legislation sponsored by Sen. Frank Farry (R-6) to protect Philadelphia’s suburban communities from unfair tax burdens and ensure local tax dollars stay where they belong.
Senate Bill 527 – known as the Commuter Tax Fairness Act – would return earned income tax dollars paid by non-residents to the municipalities where they live, rather than where they work.
“This legislation is about protecting taxpayers and restoring fairness,” said Farry. “Residents in my district and throughout Philadelphia’s suburbs are tired of seeing their local tax dollars used to prop up budgets in places where they don’t live. These funds should be reinvested in their own communities – for local police, fire protection, infrastructure and schools.”
Under current law, Philadelphia’s special status as a home rule charter city allows it to retain 100% of the 3.44% wage tax paid by commuters who live in surrounding communities. Senate Bill 527 would end this inequity and align Philadelphia with all 2,560 municipalities in Pennsylvania.
Additionally, if the worker does not work in the city but is employed by a company based there, they would not pay the 3.44% tax. Instead, they would only be responsible for their local earned income tax.
Farry has been a strong advocate for this reform since first introducing the legislation in 2018 as a member of the Pennsylvania House of Representatives. He has continued to reintroduce it in each session since joining the Senate.
“This is a commonsense fix that puts taxpayers first,” Farry said. “I will continue to fight to ensure our suburban residents aren’t footing the bill for services they don’t receive. It’s time we reinvest those hard-earned tax dollars where they live and return what’s rightfully theirs to their own pockets.”
The bill now heads to the House of Representatives for consideration.
View Farry’s floor remarks here.
CONTACT: Nicole McGerry