Sterling Act

Could the municipalities of Chester County use an additional $4.2 million dollars per annum? Or the school districts about $800 thousand in additional funding? If so, consider the attached resolutions for adoption by townships and boroughs and forwarding to (SEATO - Southeast Association of Township Officials - essentially Bucks, Chester, Delaware and Montgomery Counties).

The resolutions address the 1932 Sterling Act which allowed Philadelphia to tax income both at the "resident" and "source" levels.  Each municipality in Chester County may tax income for their resident's and non-resident’s earnings regardless of source; however, they forward the taxes assessed to the home municipality.  Under the terms of the Sterling Act Phildelphia does not remit to the home municipality. Chester County's Sterling Act shortfall was $4,800,357 at the municipal level in 2014 and about $4.2M in 2021.  Bucks county over $60 million. School district shortfall is mitigated by payments made by the Commonwealth to compensate for a portion of their shortfall.

The constitutional issue in the essay cited below is related primarily to the impact in New Jersey arising in the US Supreme Court -- Comptroller of the Treasury of Maryland v. Wynne.

CCATO urges your municipality considers and passes the appropriate attached resolution.  Once passed email an executed copy to and we will handle the forwarding to legislators and the Governor.

SEATO conducts a monthly conference call with the Pennsylvania State Association of Township Officials and this topic has been jointly addressed and concurred as an important issue over several sessions with the conferees.

Reference Materials:

Adopted Resolution in 2023

  • East Caln Township
  • Upper Oxford Township 
  • West Bradford Township
  • West Nantmeal Township