An Act amending Titles 53 (Municipalities Generally) and 72 (Taxation and Fiscal Affairs) of the Pennsylvania Consolidated Statutes, eliminating school district property taxes; imposing county and school district taxes; establishing the School District Emergency Fund and the School District Property Tax Elimination Fund; consolidating Articles II and III of the Tax Reform Code of 1971; in preliminary provisions relating to sales and use tax, providing for definitions; in taxation generally relating to sales and use tax, providing for exclusions and for transfer to county sales and use tax accounts; in preliminary provisions relating to personal income tax, providing for definitions; and making repeals.

HB 1649 eliminates school district property taxes on residential and commercial properties in Pennsylvania. It replaces these taxes with two new revenue sources: a 2% increase to county-level sales, use, and occupancy taxes (with some exclusions like clothing and candy removed), and a local income tax of up to 1.88% on resident taxpayers' earned income and retirement benefits (excluding Social Security). The bill establishes two funds - the School District Property Tax Elimination Fund (to distribute sales tax revenue to school districts) and the School District Emergency Fund - and requires landlords to reduce rents for tenants by the amount of eliminated property taxes. This directly affects property owners, school districts, and landlords/tenants, shifting funding responsibility from property taxes to broader consumption and income-based taxes.