(1) After a municipality has adopted a plan under Subchapters C and C.1 of Chapter 2,⁴ it may petition the court of common pleas of the county in which the municipality is located to increase its rates of taxation on the earned income, real property, or both, beyond maximum rates provided by law. No increase in the rate of taxation on nonresidents shall be authorized unless an equal or greater increase in the rate of taxation on resident income over the highest rate levied in the previous fiscal year is authorized in the same tax year.

(1.1) A municipality may petition the court to levy a payroll preparation tax as provided in subsection (d)(2).

(1.2) A municipality may petition the court for an increase in the municipality's rate of taxation for earned income under paragraph (1) or may petition the court for an increase of the local services tax as provided under subsection (d)(1) or (1.1).

(2) If a tax increase above existing limits is granted by the courts or a tax is approved as provided in subsection (d), the increase shall be effective for a period of one year. The one-year increase shall run from the date specified in the petition filed with the court or, if no such date is specified, from the beginning of the current fiscal year of the municipality. Subsequent increases in rates of taxation or the imposition of a tax under subsection (d) may be granted by the court upon annual petition of the municipality until the termination date of the plan adopted by the municipality under Chapter 2.⁵ The additional amount of taxes resulting from the petition shall not be subject to sharing with a school district.

(3) No increase in the rate of taxation on the income of nonresidents shall be authorized in a city of the second class A, or a home rule municipality that was previously a city of the second class A, unless an equal or greater increase in the rate of taxation on resident income over the highest rate levied in the previous fiscal year is authorized in the same tax year. In addition, a petition shall not include an increase in a rate of taxation on nonresident income unless the municipality certifies to the court, with regard to those provisions of the plan having a measurable fiscal impact, that:

(1) A local services tax pursuant to Chapter 3 of the act of December 31, 1965 (P.L. 1257, No. 511),⁶ known as The Local Tax Enabling Act, at a rate not to exceed $156. A municipality adopting an ordinance under this paragraph shall be prohibited from imposing any additional tax on earned income pursuant to subsection (c). A municipality levying the local services tax at a rate in excess of $52 shall, by ordinance, exempt any person from the local services tax whose total earned income and net profits from all sources within the municipality is less than $15,600 for the calendar year in which the local services tax is levied. This paragraph does not apply to a municipality which, on the effective date of this subsection,⁷ is not authorized to petition the court of common pleas for the imposition of an earned income tax on nonresidents.

(1.1) In the case of a financially distressed municipality that has also received a determination that it has a level II or level III financially distressed pension system under Chapter 6 of the act of December 18, 1984 (P.L. 1005, No. 205),⁸ known as the Municipal Pension Plan Funding Standard and Recovery Act, a petition for a local services tax under paragraph (1) shall not be authorized at a rate in excess of $104 in any fiscal year during which the municipality levies a tax under section 607(f) of the Municipal Pension Plan Funding Standard and Recovery Act⁹ on earned income.

(2) A payroll preparation tax pursuant to section 303 of The Local Tax Enabling Act.¹⁰ A municipality imposing a tax under this paragraph may levy a tax at a rate as provided in this section and as certified by the coordinator and approved by the court. When imposing a tax under this paragraph, the municipality may impose the tax not to exceed a rate that is sufficient to produce revenues equal to revenues collected as a result of a business privilege tax and a mercantile tax under Chapter 3 of The Local Tax Enabling Act in the preceding fiscal year. After approval by the court of the tax at the rate as provided in this section, the municipality may levy the tax in any subsequent year without additional court approval, including any year after the termination of the municipality's distressed status, at a rate not to exceed that initially approved by the court. A municipality adopting a payroll preparation tax under this paragraph may not levy a business privilege tax or mercantile tax. The authority provided by this paragraph is limited to those municipalities levying a business privilege or mercantile tax, on a flat-rate or millage basis, in the year of the filing of a petition as provided in subsection (c).