06/30/2008
A bill that reduces paperwork, confusion and headaches for small employers is on its way to the governor's desk. Gov. Ed Rendell is expected to sign SB 1063 that reduces the number of local earned income tax collectors to 69 -- down from the current 560 -- and allows businesses to remit earned income taxes (EIT) to a single collector instead of remitting taxes to each county where an employee resides. The measure should eliminate $237 million annually in administrative waste and lost EIT tax collections. SB 1063 passed the House 171-29 and the Senate 40-10. Studies show that the nearly 2,900 school districts and municipalities in Pennsylvania collect about $2 billion in wage taxes annually but millions of tax dollars fail to reach their intended recipients because of a vast administrative bureaucracy. Small businesses spend about $74.24 per hour for tax-related paperwork and record-keeping. More than one-third spend $1,200 or more annually for payroll services.
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