Sales and Use Tax Distribution
Under a formula in Act 77, Allegheny County and its municipalities receive one-half of the County sales tax.
The County levied the tax in March 1994 and every municipal government in Allegheny County voted to participate in the benefits of the tax. 25% of the funds go directly to the County and 25% goes to the other municipal governments based on a formula weighted to help distressed communities. The proceeds are used to assist in shifting the tax burden awayfrom property taxes and for municipal functions such as road repair and police protection. Municipal funds do not go through the RAD Board; they are distributed directly to the municipalities from the state which collects the tax. The total local government sales tax distribution from 1994-2016 is detailed in this chart.
Municipal Sales Tax Revenue History
RAD sales tax revenue provided to Allegheny County and the municipalities allowed the elimination of the personal property tax and resulted in reductions in real property taxes and other taxes in every municipality in Allegheny County.
By the end of 2017, this will amounted to $1.79 billion since the program began. The Legislature required the County and local governments to shift costs away from property tax and toward the broader base sales tax. The result has been substantial and long-lasting tax relief for citizens.
- Permanent elimination of the County and local personal property tax. Based on pre-sales tax, this means savings of $437 million in personal property tax in the first 20 years of RAD.
- Tax relief in Allegheny County and in every municipality. In 1995, Allegheny County reduced its real property millage by 5 mills and then reduced it by another 2 mills the following year (a value of $60 million per year at that time) as a direct result of new sales tax revenue and District support of regional assets like the parks and libraries. As a result of new sales tax revenue, 115 municipal governments reduced local millage, 10 eliminated the per capita tax, and three reduced/eliminated the wage tax.
- Reduction of the City of Pittsburgh amusement tax by at least 50%.
- Dependence on property taxes to support parks, libraries, and other publicly funded assets has been further reduced.
- Municipalities have allocated RAD funds for a wide variety of services, like police officers and road repairs.