[HISTORY: Adopted by the City Council of the City of Harrisburg
by Ord. No. 108-1966. Amendments noted where applicable.]
CROSS-REFERENCES
Power to tax: see Local Tax Enabling Act, Act of December 31,
1965, P.L. 1257, as amended (53 P.S. § 6924.101 et seq.).
[Ord. No. 127-1967[1]]
As used in this chapter, unless otherwise expressly stated or
clearly indicated by the context, the following terms shall have the
meanings indicated:
A partnership, limited partnership or any other unincorporated
group of two or more persons.
See Chapter 5-715, Business Privilege and Mercantile Tax.
See Glossary, Chapter 1-302.
The present calendar year for which a tax is levied.
See Glossary, Chapter 1-302.
Salaries, wages, commissions, bonuses, incentive payments,
fees, tips, and other compensation received by a person or his or
her personal representative for services rendered, whether directly
or through an agent, and whether in cash or in property. This term
does not include:
Wages or compensation paid to persons on active military service;
Periodic payments for sickness and disability other than regular
wages received during a period of sickness, disability or retirement;
Payments arising under workers' compensation acts, occupational
disease acts and similar legislation;
Payments commonly recognized as old-age benefits, retirement
pay or pensions paid to persons retired from service after reaching
a specific age or after a stated period of employment;
Payments commonly known as "public assistance";
Unemployment compensation payments made by any governmental
agency;
Payments to reimburse expenses;
Payments made by employers or labor unions for wage and salary
supplemental programs, including, but not limited to, programs covering
hospitalization, sickness, disability, or death, supplemental unemployment
benefits, strike benefits, social security and retirement.
An individual who works, for financial or other compensation,
for another person, partnership, association, corporation, governmental
body, agency, or other entity employing one or more persons on a salary,
wage, commission, or other compensation basis; a self-employed person.
A person, public employee or private agency designated by
Council to collect and administer the tax on earned income and net
profits.[2]
The net income from the operation of a business, profession
or other activity, except a corporation, after provisions for all
costs and expenses incurred in the conduct thereof, determined either
on a cash or accrual basis in accordance with the accounting system
used in such business, profession or other activity, but without deduction
of taxes based on income.
A person, partnership, association, or other entity domiciled
outside the City.
The calendar year before the current year.
See Glossary, Chapter 1-302.
The calendar year following the current year.
See Glossary, Chapter 1-302.
A.
(1)
Salaries, wages, commissions and other compensation earned on
and after January 1, 1967, by individual residents of the City;
(2)
Salaries, wages, commissions and other compensation earned in
the City on and after January 1, 1967, by individual nonresidents
of the City;
(3)
Net profits earned on and after January 1, 1967, by residents
of the City;
(4)
Net profits earned on and after January 1, 1967, in the City
by nonresidents of the City.
[1]
Editor's Note: Sections 1 and 2 of Ord. No. 10-2012, adopted
10-23-2012, provide as follows: "The Earned Income Tax imposed under
Chapter 5-707.2 of the Codified Ordinances of the City of Harrisburg
is increased from 1% to 2% upon residents of the City of Harrisburg
effective immediately upon passage of this ordinance. The revenues
generated from the 1% tax increase are not subject to sharing with
the Harrisburg School District." Section 7 of Ord. No. 10-2012 provides
as follows: "The tax increase imposed by this Ordinance shall be effective
only for one year from the date this Ordinance is enacted, at which
time the Earned Income Tax shall return to 1%, unless extended by
a lawfully enacted Ordinance of City Council."
[2]
Ordinance No. 22-2013, adopted 9-16-2013, extended the 2%
tax, effective 1-1-2014 to 12-31-2016, and stated that revenues generated
from the 1% tax increase would not be subject to sharing with the
Harrisburg School District.
B.
The tax levied hereunder shall relate to and be imposed upon salaries,
wages, commissions, and other compensation paid by an employer or
on the employer's behalf to an employee or shall relate to and
be imposed on the net profits of any business, profession or other
activity carried on by any person or persons.
C.
Every corporation which is subject to the Pennsylvania corporate
net income tax, or exempt from the Pennsylvania corporate net income
tax, and every foreign corporation which is subject to the Pennsylvania
franchise tax, or exempt from the Pennsylvania franchise tax, shall
be exempt from the tax imposed by this chapter.
D.
The tax levied by this chapter shall be applicable to salaries, wages,
commissions, and other compensation and to net profits earned in the
period beginning January 1 and ending December 31. The tax shall continue
in force on a calendar-year basis after 1967 or taxpayer fiscal-year
basis without annual reenactment. After 1967, references to 1967 shall
be references to the current year, and references to 1968 shall be
references to the succeeding year.
A.
Every taxpayer who reasonably expects to earn any taxable net profits
during the period between January 1 and December 31 shall, on or before
April 15, make and file with the Income Tax Officer, on a form prescribed
by the Income Tax Officer, a declaration of estimated net profits
for the period beginning January 1 and ending December 31, setting
forth the estimated amount of net profits reasonably expected for
such period and subject to the tax, the amount of estimated tax imposed
by this chapter on such estimated net profits, and such other relevant
information as the Income Tax Officer may require. The taxpayer making
the declaration shall, at the time of filing thereof, pay the City
1/4 of the estimated tax shown as due thereon, and such taxpayer shall
thereafter pay 1/4 of the estimated tax in each of three installments,
as follows: one installment on or before June 15; one installment
on or before September 15; and the last installment on or before January
15.
B.
A taxpayer who, on April 15, did not reasonably expect to earn any
taxable net profits during the period between January 1 and December
31 and who, subsequent to April 15, reasonably expects to earn taxable
net profits on or before December 31 shall make and file, on or before
June 15, September 15, or January 15, whichever date next follows
the date on which the taxpayer first reasonably expects such net profits,
a declaration similar to that required under the foregoing subsection.
The taxpayer making the declaration shall, at the time of filing thereof,
pay to the City the estimated tax shown as due thereon; provided,
however, that the taxpayer shall have the right to pay the estimated
tax in equal installments on or before the quarterly installment payment
dates which remain after the filing of the declaration.
C.
The Income Tax Officer is hereby authorized to provide by regulation
for the making and filing of adjusted declarations of estimated net
profits and for the payments of the estimated tax in cases where a
taxpayer who has filed the declaration hereinabove required shall
thereafter either reasonably expect additional net profits not previously
declared or find that net profits have been overestimated.
D.
On or before April 15, every taxpayer who has earned taxable net
profits shall make and file with the Income Tax Officer, on a form
prescribed by said Officer, a final return showing all of such net
profits for the period beginning January 1 and ending December 31,
the total amount of tax due, the amount of estimated tax paid under
the provisions of this chapter, and the balance due. When the return
is made for a fiscal year, different from the calendar year, the return
shall be made within 105 days from the end of said fiscal year. The
percentage of the total net profits of any calendar or fiscal year
of a taxpayer beginning or ending within the period beginning January
1 and ending December 31, to which the tax imposed by this chapter
shall be applicable, shall be equal to the same percentage of such
total net profits as the number of days in any such year within such
period bears to the total number of days in any such year. At the
time of filing the final return, the taxpayer shall pay the balance
of the tax due or shall make demand for refund or credit in the case
of overpayment. On or before January 31, a taxpayer may, in lieu of
paying the fourth quarterly installment of estimated tax, elect to
file a final return with the Income Tax Officer and make final payment
or claim refund, as the case may be.
E.
Every taxpayer who discontinues business prior to December 31 shall,
within 30 days after the discontinuance of business, file a final
return as hereinabove required and pay the tax due or demand refund
or credit in the case of overpayment.
A.
Every taxpayer who is employed on a salary, wage, commission, or other compensation basis and who reasonably expects to earn any taxable earnings not subject to the provisions of § 5-707.5 of this chapter (relating to the collection at source) shall, on or before April 15, make and file with the Income Tax Officer a declaration of estimated total taxable salaries, wages, commissions and other compensation for the period beginning January 1 and ending December 31; the estimated amount of tax thereon that will be deducted therefrom pursuant to § 5-707.5; the estimated amount of tax imposed by this chapter that will not be deducted therefrom pursuant to § 5-707.5; and such other relevant information as the Income Tax Officer may require. In preparing a declaration of estimated taxable salaries, wages, commissions, and other compensation taxable under this chapter, the taxpayer shall use the same amounts with respect to such items as shall have been used in preparing declaration of estimated tax for the year for federal income tax purposes, if such taxpayer shall be required to file any such declaration.
B.
A taxpayer who, on April 15, did not reasonably expect to earn any salaries, wages, commissions, and other compensation not subject to the provisions of § 5-707.5 of this chapter (relating to the collection at source) during the period between January 1 and December 31 and who, subsequent to April 15, reasonably expects to earn salaries, wages, commissions, and other compensation not subject to the provisions of § 5-707.5 on or before December 31 shall make and file, on or before June 15, September 15, or January 15, whichever of these dates next follows the date on which the taxpayer first reasonably expects to earn such salaries, wages, commissions, and other compensation, a declaration similar to that required under Subsection A hereof. The taxpayer making the declaration shall, at the time of filing thereof, pay to the City the estimated tax shown as due thereon; provided, however, that the taxpayer shall have the right to pay the estimated tax in equal installments on or before the quarterly installment payment dates which remain after the filing of the declaration.
C.
The Income Tax Officer is hereby authorized to provide by regulation
for the making and filing of an adjusted declaration of estimated
salaries, wages, commissions, and other compensation and for the payments
of the estimated tax in cases where a taxpayer who has filed the declaration
hereinabove required shall thereafter either reasonably expect additional
salaries, wages, commissions, and other compensation not previously
declared or expect that salaries, wages, commissions, and other compensation
have been overestimated.
D.
On or before April 15, every taxpayer who has received taxable salaries, wages, commissions, and other compensation shall make and file with the Income Tax Officer, on a form prescribed by such official, a final return showing all such salaries, wages, commissions, and other compensation earned during the period beginning January 1 and ending December 31; the total amount of tax due thereon; the amount of estimated tax thereon paid, if any; the amount, if any, of tax thereon that has been withheld pursuant to the provisions of § 5-707.5; and the balance of tax due. On or before January 31 of the succeeding year, a taxpayer may, in lieu of paying a fourth quarterly installment of estimated tax, elect to file a final return with the Income Tax Officer and make final payment or claim a refund, as the case may be. At the time of filing the final return, the taxpayer shall pay the balance of the tax due or shall make demand for refund or credit in the case of overpayment.
A.
Every employer within the City who employs one or more persons on
a salary, wage, commission, or other compensation basis, other than
domestic servants, shall deduct, at the time of payment thereof, the
tax imposed by this chapter on the salaries, wages, commissions, and
other compensation due the employee or employees and shall, on or
before April 30, July 31, October 31, and January 31 of the current
year, respectively, make and file with the Income Tax Officer, on
a form prescribed by said official, a return setting forth the taxes
so deducted for the preceding quarterly periods ending March 31, June
30, September 30, and December 31, respectively.
B.
On or before February 28, every such employer shall file with the
Income Tax Officer, on forms prescribed by such official:
(1)
An annual return showing the total amount of salaries, wages,
commissions, and other compensation earned by an employee or employees
on which a tax is imposed by this chapter; the total amount of tax
deducted; and the total amount of tax paid to the City in respect
to salaries, wages, commissions, and other compensation earned by
the employee or employees during the period beginning January 1 and
ending December 31;
(2)
A return in respect of each person who was an employee during
all or any part of the period beginning January 1 and ending December
31 and who earned during such period any salaries, wages, commissions,
or other compensation subject to the tax imposed by this chapter,
setting forth the employee's name, address and social security
number; the amount of such salaries, wages, commissions, or other
compensation earned by the employee during said period; the amount
of tax deducted therefrom; and such other relevant information as
the Tax Officer may require. Every employer shall furnish a copy of
the individual return to the employee in respect of whom it was filed.
C.
Every
employer who discontinues business prior to December 31 shall, within
30 days after the discontinuance of business, file the returns hereinabove
required and pay the tax due.
D.
The failure
or omission of any employer to make the deduction required by this
section shall not relieve any employee from the payment of the tax
or from complying with the requirements of this chapter relating to
the filing of declarations and returns.
E.
If an
employer makes a deduction of tax as required by this section, the
amount deducted shall constitute, in the hands of such employer, a
trust fund held for the account of the City as beneficial owner thereof,
and the employee from whose salaries, wages, commissions, or other
compensations such tax was deducted shall be deemed to have paid such
tax.
A.
It shall be the duty of the Income Tax Officer to collect and receive
the taxes, fines and penalties imposed by this chapter. It shall also
be a duty to keep a record showing the amount received from each taxpayer
or employer paying the tax and, if paid by such taxpayer or employer
in respect of another taxpayer, the name of such other taxpayer and
the date of such receipt.
B.
The Income Tax Officer is hereby charged with the administration
and enforcement of the provisions of this chapter and is hereby empowered
to prescribe, adopt, promulgate, and enforce rules and regulations
relating to any matter pertaining to the administration and enforcement
of this chapter, including provisions for the reexamination and correction
of declarations and returns and of payments alleged or found to be
incorrect or as to which an overpayment is claimed or found to have
occurred, and to prescribe forms necessary for the administration
of this chapter.
C.
The Income Tax Officer and designated agents are hereby authorized
to examine the books, papers and records of any taxpayer or employer
in order to verify the accuracy of any declaration or return or, if
no declaration or return was filed, to ascertain the tax due. Every
taxpayer and employer is hereby directed and required to give to the
Income Tax Officer or designee the opportunity for such examinations
and investigations as are hereby authorized.
D.
Any information gained by the Income Tax Officer or designee or by
any other official, agent or employee of the City as a result of any
declarations, returns, investigations, hearings, or verifications
required or authorized by this chapter shall be confidential and shall
not be disclosed to any person except for official use in connection
with the administration or enforcement of this chapter or as otherwise
provided by law.
E.
Any taxpayer or employer aggrieved by any action of the Income Tax
Officer shall have the right of appeal as provided by law.
A.
The Income Tax Officer may sue in the name of the City for the recovery
of taxes due and unpaid under this chapter.
B.
Any suit brought to recover the tax imposed by this chapter shall
be commenced within three years after such tax is due or within three
years after a declaration or return has been filed, whichever date
is later, provided that this limitation shall not prevent the institution
of a suit within six years for the collection of any tax due or determined
to be due in the following instances:
(1)
Where no declaration or return was filed by a person, although
a declaration or return was required to be filed under the provisions
of this chapter;
(2)
In the case of a false or fraudulent declaration or return with
the intent to evade tax;
(3)
Where any employer has deducted taxes under the provisions of
this chapter and has failed to pay the amounts so deducted to the
City of Harrisburg; or
(4)
In the case of substantial understatement of tax liability of
25% or more, and no fraud.
C.
The Income Tax Officer may sue for recovery of an erroneously issued
refund, provided such suit is begun within two years after making
such refund, except that the suit may be brought within five years
if it appears that any part of the refund was induced by fraud or
misrepresentation of material fact.
If, for any reason, the tax is not paid when due, interest at
the rate of 6% per annum on the amount of said tax and an additional
penalty of 0.5% of the amount of unpaid tax for each month or fraction
thereof during which the tax remains unpaid shall be added and collected.
Where suit is brought for the recovery of any such tax, the taxpayer
or employer liable therefor shall, in addition, be liable for the
costs of collection and the interest and penalties herein imposed.
The Income Tax Officer is hereby authorized to accept payment
of the amount of tax claimed by the City in any case where any person
disputes the validity or amount of the City's claim for the tax.
If it is thereafter judicially determined by a court of competent
jurisdiction that there has been an overpayment to the Income Tax
Officer, the amount of the overpayment shall be refunded or credited
to the taxpayer or employer who paid.
A.
The tax imposed by this chapter shall not apply:
(1)
To any person as to whom it is beyond the legal power of the
City to impose the tax herein provided under the Constitution of the
United States and the Constitution and laws of the Commonwealth of
Pennsylvania;
(2)
To the net profits of any institution or organization operated
for public, educational or charitable purposes, to an institution
or organization not organized or operated for private profit, or to
a trust or a foundation established for any of such purposes.
See Chapter 5-717, Enforcement and Penalties.
