About Us

Murphy, Butterfield, & Holland, P.C. was founded on August 1, 1988 by Bertram S. Murphy, Jonathan E. Butterfield, and Fred A. Holland. In August of 1991, George R. Price, Jr. joined the firm, which then became known as Murphy, Butterfield, Holland & Price. Amyotrophic Lateral Sclerosis (Lou Gehrig's disease) forced Mr. Price to retire in December 1995 and took his life on April 10, 1997. The firm moved to its present location at 442 William Street in March 1992. Mr. Murphy, senior partner of the firm, passed away on August 1, 2003.  The firm currently employs two lawyers, four paralegals, and two administrative personnel. The firm has a division, Susquehanna Abstract Company, which provides real estate certificates of title and title insurance for its clients.

Understanding Local Taxes by Fred A. Holland
It seems that "tax reform" has been on the agenda in Pennsylvania forever. There were major tax reform initiatives in 1989 and 1997, both of which involved statewide referendums. Tax reform was a hotly debated issue in the race for governor this November. As a result of the 2002 election, seven of the eight school districts in Lycoming County have implemented some kind of tax reform. Why is tax reform so important? Read More...

Please note the following: Murphy, Butterfield & Holland, P.C. is a Pennsylvania law firm, and all of our lawyers are licensed to practice only in Pennsylvania. The information on this website is intended to be general information, not legal advice. The information is based upon the laws of Pennsylvania.

Understanding Local Taxes Continued...
The starting point to answering that question is to understand Pennsylvania ’s existing structure for local taxes. Local governments are only permitted to impose taxes as authorized by the Commonwealth. This article discusses only the taxes that are common in Lycoming County .

Real Estate Tax
For many years, the mainstay of local taxes has been the Real Estate Tax. A real estate tax is imposed by the County, all school districts in the County, and most other municipal governments in the County (i.e. townships, boroughs, and the City of Williamsport ). As homeowners know, the County and municipal Real Estate Tax bills are generally sent in March, and the school districts’ in July.

Real Estate Taxes are paid to the school district or municipality in which the real estate is located. They are levied and calculated by the “millage rate” that the government entity imposes. For example, the 2007 millage rate for the Williamsport Area School District is 12.95 mills. A mill is one-tenth of one percent, so the millage rate converts mathematically to .1295. The number of mills imposed by the taxing body is multiplied by the assessed value established by the County Assessment Office for the real estate. If a property in the Williamsport Area School District was assessed at $100,000.00 in the most recent reassessment, the school Real Estate Tax on that property is .1295 x 100,000, or $1,295.00. Similar calculations would show the tax imposed by the County and municipality based on their levies.

Earned Income Tax
The other primary source of revenue for school districts and municipalities is the Earned Income Tax. The tax is withheld by employers and must be paid in installments by those who are self-employed. The rate of the tax varies between 1.6% and 2% depending upon the school district in which the taxpayer resides. Some people are under the mistaken impression that the tax is kept by the municipality or school district in which the taxpayer works. It is not, it is paid over to the municipality or school district where the taxpayer lives.

“Nuisance” Taxes
In addition, there are taxes generally referred to as “nuisance taxes.” These taxes were authorized by a statute that was passed in 1965 officially known as the Local Tax Enabling Act. The statute is generally referred to as “Act 511.” Because the statute authorized local governments to impose taxes on almost anything that isn’t already taxed by the Commonwealth, it has also been called the “Tax Anything Act.”

One of the nuisance taxes is known as the Per Capita Tax. This is a tax imposed on all adults who make their principal residence within a given area. Many municipalities levy a $5.00 Per Capita Tax as allowed by Act 511. Some school districts in the County impose two Per Capita Taxes of $5.00 each - one is authorized by Act 511 and another by the Pennsylvania School Code. The bill for the Per Capita Tax is sent at the same time as real estate taxes.

Another nuisance tax is the Local Services Tax, formerly known as the Occupation Privilege Tax. Many municipalities and some school districts impose a Local Services Tax. In the City of Williamsport , the amount of this tax is $52.00. This tax is imposed on all people who work within the jurisdiction rather than the jurisdiction where the taxpayer lives. Local Services Taxes are withheld from an employee’s paycheck.

In the 1990s, the most controversial of the Act 511 taxes in Lycoming County was the Occupation Assessment Tax. There are a few municipalities that still impose this tax, but all Lycoming County School Districts repealed this tax and replaced it with a higher earned income tax.

Realty Transfer Tax
Those who have bought or sold real estate know about this tax, which is imposed on real estate transactions. Throughout the county, it’s 2% of the purchase price of the real estate being transferred. Half of the tax (1%) is paid to the Commonwealth. The other half is generally split in half again and paid to the municipality and the school district in which the property is located. In the few townships which have chosen not to levy the tax, the entire 1% local share is paid to the school district.

Business Privilege and Mercantile Taxes
This tax is only imposed in a few areas of the County. The tax is imposed on businesses located in the jurisdictions that have the tax. The Lycoming County governments that use this tax impose a millage rate that is multiplied by the gross receipts earned by the business. This tax exists in Loyalsock Township and the Loyalsock Township School District , which collect the tax jointly, and in the City of Williamsport . In Loyalsock, the first $5,000.00 of earnings are exempt from the tax, while Williamsport ’s exemption is $1,000.00. The Williamsport Area School District once imposed this tax, but stopped doing so in 1997.

Effects of Recent Tax Reform
Act 1 of 2006 has two major features. One is the tax limitation imposed upon school districts. Each year, the state determines an “index” for each school district in the Commonwealth, which is based upon a few different measures of inflation. In the late fall, a school district must decide whether it will limit its budget so that tax increases will be at or below the index. If the district believes that it may need to increase taxes by more than the index, it must prepare its budget more quickly. To exceed the index, a school district must get approval either from the Pennsylvania Department of Education, the Court of Common Pleas, or the voters by referendum, depending upon the reason that the increase above the index is needed.

The other homestead exemptions, which will be provided when the casinos permitted by state law generate enough money to fund the exemptions. At that time, homeowners who have applied and been approved through the county assessment office for a homestead exemption will see the reduction on their school real estate tax bills.