This article shall be known and shall be cited as the "Earned Income Tax Ordinance." No. 1042, §
1 (22-176), 9-10-1990.
[Ord. No. 1042, § 1, (22-177), 9-10-1990; Ord. No. 1406, § 1, 7-14-2003]
The following definitions shall apply in the interpretation
and enforcement of this article.
ASSOCIATION
A partnership, limited partnership or any other unincorporated
group of two or more persons.
BUSINESS
An enterprise, activity, profession or any other undertaking
of an unincorporated nature conducted for profit, or ordinarily conducted
for profit, whether by persons, partnerships, associations or any
other entity.
CORPORATION
A corporation or joint stock association organized under
the laws of the United States, the Commonwealth of Pennsylvania or
any other state, territory, foreign country or dependency.
DOMICILE
The place where one lives and has his permanent home, and
to which he has the intention of returning whenever he is absent.
Actual residence is not necessarily domicile, for domicile is the
fixed place of abode which, in the intention of the taxpayer, is permanent
rather than transitory. Domicile is the voluntary fixed place of habitation
of a person, not for a mere special or limited purpose, but with the
present intention of making a permanent home, until some event occurs
to induce him to adopt some other permanent home. In the case of businesses
or associations, the domicile is that place considered as the center
of business affairs and the place where its functions are discharged.
EARNED INCOME
Compensation as determined under Section 303 of the act of March 4, 1971 (P.L. 6, No. 2), known as the "Tax Reform Code of 1971," and regulations at 61 Pa. Code Pt. I Subpt. B. Art.
V (relating to personal income tax). Employee business expenses are allowable deductions as determined under Article
III of the Tax Reform Code of 1971. The amount of any housing allowance provided to a member of the clergy shall not be taxable as earned income.
A person, partnership, association, corporation, institution,
governmental body or unit or agency, or any other entity employing
one or more persons for a salary, wage, commission or other compensation.
INCOME TAX OFFICER OR OFFICERS
Person, public employee or private agency designated by the
Council of Plymouth Township to collect and administer the tax on
earned income and net profits.
NET PROFITS
The net income from the operation of a business, profession, or other activity, except corporations, determined under Section 303 of the act of March 4, 1971 (P.L. 6, No. 2), known as the "Tax Reform Code of 1971," and regulations in 61 Pa. Code Pt. I Subpt. B Art.
V (relating to personal income tax). The term does not include income which is not paid for services provided and which is in the nature of earnings from an investment. For taxpayers engaged in the business, profession or activity of farming, the term shall not include:
(a)
Any interest earnings generated from any monetary accounts or
investment instruments of the farming business;
(b)
Any gain on the sale of farm machinery;
(c)
Any gain on the sale of livestock held 12 months or more for
draft, breeding or dairy purposes; and
(d)
Any gain on the sale of other capital assets of the farm.
NONRESIDENT
A person, partnership, association or other entity domiciled
outside the Township.
RESIDENT
A person, partnership, association or other entity domiciled
in the Township.
TAXPAYER
A person, partnership, association, or any other entity required
hereunder to file a return of earned income or net profits or to pay
a tax thereon.
TOWNSHIP
The Home Rule Municipality of Plymouth Township, Montgomery
County, Pennsylvania.
[Ord. No. 1042, § 1 (22-178), 9-10-1990;
amended 11-29-2021 by Ord. No. 1673; 11-28-2022 by Ord. No. 1687]
A tax at the rate of 1.10 percent (1.10%) on each dollar is
hereby imposed on all earned income and net profits as defined herein,
earned by residents of the Township, and a tax at the rate of one
percent (1.00%) on each dollar is hereby imposed on all earned income
and net profits earned by nonresidents of the Township for work done
or services performed or rendered in said Township. This tax shall
become effective January 1, 2023, and shall remain in effect thereafter
on a calendar-year basis without annual re-enactment unless the rate
of tax is subsequently changed.
[Ord. No. 1042, § 1 (22-179), 9-10-1990]
(a) Net profits. Every taxpayer making net profits shall, on or before
April fifteenth of each year, make and file with the income tax officer,
on a form prescribed by the income tax officer, a declaration of his
estimated net profits during the period beginning January first and
ending December thirty-first of the current year and pay to the officer
in four equal quarterly installments the tax due thereon as follows:
The first installment at the time of filing the declaration and the
other installments on or before June fifteenth of the current year,
September fifteenth of the current year, and January fifteenth of
the succeeding year.
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On or before April fifteenth of the succeeding year, every taxpayer
shall make and file a final return on a form prescribed by the officer,
showing the amount of net profits earned, the total amount of tax
due and the total amount of tax paid thereon. At the time of filing
the final return, the taxpayer shall pay to the officer the balance
of the tax due, or shall make demand for refund or credit in the case
of overpayment. An incomplete or improperly completed tax return shall
be considered as not having been filed. Each final return shall be
substantiated and supported by such United States Federal Income Tax
Return forms as required by the officer, which shall at least include
a copy of the Federal W-2 Form in the case of an earned income taxable
and Schedule "C" of the Federal Return as to a net profits taxable.
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(b) Earned income. Every taxpayer shall, on or before April fifteenth
of the succeeding year, make and file with the officer a final return
showing the amount of earned income received during the period beginning
January first of the current year and ending December thirty-first
of the current year, the total amount of tax due thereon, the amount
of tax paid thereon, the amount of tax thereon that has been withheld
pursuant to the provisions relating to the collection at source, and
the balance of tax due. At the time of the 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. An incomplete or
improperly completed tax return shall be considered as not having
been filed. Each final return shall be substantiated and supported
by such United States Federal Income Tax Return forms as required
by the officer, which shall include a copy of the Federal W-2 Form
in the case of an earned income taxable and Schedule "C" of the Federal
return as to a net profit taxable.
(c) Earned income not subject to withholding. Every taxpayer who is employed
for a salary, wage, commission, or other compensation, and who received
any earned income not subject to the provisions related to collection
at source, shall make and file with the officer, on a form prescribed
or approved by the officer, a quarterly return on or before April
thirtieth of the current year, July thirty-first of the current year,
October thirty-first of the current year, and January thirty-first
of the succeeding year, setting forth the aggregate amount of earned
income not subject to withholding by him during the three month periods
ending March thirty-first of the current year, June thirtieth of the
current year, September thirtieth of the current year, and December
thirty-first of the current year, respectively, and subject to the
tax, together with such other information as the officer may require.
Every taxpayer making such return shall, at the time of filing thereof,
pay to the officer the amount of tax shown as due thereon.
[Ord. No. 1042, § 1 (22-180), 9-10-1990]
(a) Every employer having an office, factory, workshop, branch, warehouse
or other place of business within the Township imposing a tax on earned
income or net profits within the Township, who employs one or more
persons, other than domestic servants, for a salary, wage, commission
or other compensation and who has not previously registered, shall,
within 15 days after becoming an employer, register with officer his
name and address and such other information as the officer may require.
(b) Every employer having an office, factory, workshop, branch, warehouse
or other place of business within the Township who employees one (1)
or more persons, other than domestic servants, for a salary, wage,
commission or other compensation shall deduct at the time of payment
thereof the tax imposed by the Council of Plymouth Township on the
earned income due to his employee or employees and shall, on or before
April thirtieth of the current year, July thirty-first of the current
year, October thirty-first of the current year, and January thirty-first
of the succeeding year, file a return and pay to the officer the amount
of taxes deducted during the preceding three (3) month periods ending
March thirty-first of the current year, June thirtieth of the current
year, September thirtieth of the current year, and December thirty-first
of the current year, respectively. Such return, unless otherwise agreed
upon between the officer and employer, shall show the name and Social
Security number of each such employee, the earned income of such employee
during such preceding three-month period, the tax deducted therefrom,
the political subdivision imposing the tax upon such employee and
the political subdivision in which the employee resides, the total
earned income of all such employees during such preceding three-month
period, and the total tax deducted therefrom and paid with the return.
(c) Any employer who for two (2) of the preceding four (4) quarterly
periods has failed to deduct the proper tax, or any part thereof,
or has failed to pay over the proper amount of tax to the taxing authority,
may be required by the officer to file his return and pay the tax
monthly. In such cases, payments shall be made to the officer on or
before the last day of the month succeeding the month for which the
tax was withheld.
(d) On or before February twenty-eighth of the succeeding year, every
employer shall file with the officer:
(1)
An annual return showing the total amount of earned income paid,
the total amount of tax deducted, and the total amount of tax paid
to the tax officer for the period beginning January first of the current
year and ending December thirty-first of the current year.
(2)
A return withholding statement for each employee employed during
all or part of the period beginning January first of the current year
and ending December thirty-first of the current year, setting forth
the employee's name, address, Social Security number, the amount of
earned income paid to the employee during said period, the amount
of tax deducted, the political subdivisions imposing the tax upon
such employee and the amount of tax paid to the officer. Every employer
shall furnish two (2) copies of the individual return to the employee
for whom it is filed.
(e) Every employer who discontinues business prior to December thirty-first
of the current year shall within thirty (30) days after the discontinuance
of business, file the returns and withholding statements hereinabove
required and pay the tax due.
(f) Except as otherwise provided, every employer who willfully or negligently
fails or omits to make the deductions required by this section shall
be liable for payment of the taxes which he was required to withhold
to the extent that such taxes have not been recovered from the employee.
(g) The failure or omission of any employer to make the deductions required
by this section shall not relieve any employee from the payment of
the tax or from complying with the requirements of this article relating
to the filing of declarations and returns.
[Ord. No. 1042, § 1 (22-181), 9-10-1990]
(a) It shall be the duty of the officer to collect and receive the taxes,
fines and penalties imposed by this article. It shall also be his
duty to keep a record showing the amount received by him from each
person or business paying the tax and the date of such receipt.
(b) Each officer, before entering upon his official duties, shall give
and acknowledge a bond to the Township. If Council of Plymouth Township
shall by resolution designate any bond previously given by the officer
as adequate, such bond shall be sufficient to satisfy the requirements
of this subsection.
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Each such bond shall be joint and several, with one (1) or more
corporate sureties, which shall be surety companies authorized to
do business in this commonwealth and duly licensed by the insurance
commissioner of this commonwealth.
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Each bond shall be conditioned upon the faithful discharge by
the officer, his clerks, assistants and appointees of all trusts confided
in him by virtue of his office; upon the faithful execution of all
duties required by him according to law; of all monies and all balances
thereof paid to, received or held by him by virtue of his office,
and upon the delivery to his successor or successors in office of
all books, papers, documents or other official things held in right
of his office.
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Each such bond shall be taken in the name of the appointing
authority or authorities, and shall be for the use of the political
subdivision or political subdivisions appointing the officer, and
for the use of such other person or persons for whom money shall otherwise
appear, in case of a breach of any of the conditions thereof by the
acts or neglect of the principle on the bond.
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(c) The officer charged with the administration and enforcement of the
provisions of this article is hereby empowered to prescribe, adopt,
promulgate and enforce rules and regulations relating to any matter
pertaining to the administration and enforcement of this article,
including provisions for the reexamination and corrections 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 make refunds in case of overpayment for any period of time not
to exceed six (6) years subsequent to the date of payment of the sum
involved, and to prescribe forms necessary for the administration
of this article. No rule or regulation of any kind shall be enforceable
unless it has been approved by the Council of the Township. A copy
of such rules and regulations currently in force shall be available
for public inspection.
(d) The officer shall refund, on petition of and proof by the taxpayer,
earned income tax paid on the taxpayer's ordinary and necessary business
expenses, to the extent that such expenses are not paid by the taxpayer's
employer.
(e) The officer and agents designated by him are hereby authorized to
examine the books, papers and records of any employer or of any taxpayer
or of any person who the officer reasonably believes to be an employer
or taxpayer 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 employer and every taxpayer and every person who the
officer reasonably believes to be an employer or taxpayer is hereby
directed and required to give to the officer, or to any agent designated
by him, the means, facilities and opportunity for such examination
and investigations, as are hereby authorized.
(f) Any information gained by the officer, his agents, or by any other
official or agent of the taxing district, as a result of any declarations,
returns, investigations, hearings or verifications required or authorized
by this article, shall be confidential, except for official purposes
and except in accordance with a proper judicial order, or as otherwise
provided by law.
(g) The officer is authorized to establish different filing, reporting
and payment dates for taxpayers whose fiscal years do not coincide
with the calendar year.
(h) The officer shall, at least quarterly, distribute earned income taxes
to the appropriate political subdivisions. The political subdivisions
shall not be required to request the officer to distribute the funds
collected but shall at least annually reconcile their receipts with
the records of the officer and return to or credit the officer with
any overpayment. If the officer, within one (1) year after receiving
a tax payment, cannot identify the taxing jurisdiction entitled to
a tax payment, he shall make payment to the Township.
[Ord. No. 1042, § 1 (22-182), 9-10-1990]
(a) The owner of any apartment house or rental unit located in the Township,
or the authorized representative of the owner, shall submit to the
Secretary of the Township a list of the occupants consisting of all
the names and apartment designations of all persons eighteen (18)
years of age and older, residing in the apartment house or rental
unit and who are not transient occupants. The list shall be submitted
within sixty (60) days from December 31, 1990, and shall be updated
quarterly thereafter, every April 1, July 1, October 1 and January
1.
[Ord. No. 1042, § 1 (22-183), 9-10-1990]
(a) The officer may sue in the name of the Township for recovery of taxes
due and unpaid under this article.
(b) Any suit brought to recover the tax imposed by this article shall
begin within three (3) years after such tax is due, or within three
(3) years after the declaration or return has been filed, whichever
date is later; provided, however, that this limitation shall not prevent
the institution of a suit for the collection of any tax due or determined
to be due in the following cases:
(1)
Where no declaration or return was filed by any person, although
a declaration or return was required to be filed by him under provisions
of this article, there shall be no limitation.
(2)
Where an examination of the declaration or return filed by any
person, or of other evidence relating to such declaration or return
in the possession of the officer, reveals a fraudulent evasion of
taxes, there shall be no limitation.
(3)
In the case of substantial understatement of tax liability of
twenty-five (25) percent or more and no fraud, suit shall begin within
six (6) years.
(4)
Where any person has deducted taxes under the provisions of
this article, and has failed to pay the amounts so deducted to the
officer, or where any person has willfully failed or omitted to make
the deductions required by this section, there shall be no limitation.
(5)
This section shall not be construed to limit the Township from
recovering delinquent taxes by any other means provided by law.
(c) The officer may sue for recovery of an erroneous refund provided
such suit is begun two (2) years after making such refund, except
that the suit may be brought within five (5) years if it appears that
any part of the refund was induced by fraud or misrepresentation of
material fact.
[Ord. No. 1042, § 1 (22-184), 9-10-1990]
If for any reason the tax is not paid when due, interest at
the rate of six (6) percent per annum on the amount of said tax, and
an additional penalty of one-half of one percent (1/2 of 1%) of the
amount of the 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 person liable therefor
shall, in addition, be liable for the costs of collection and the
interest and penalties herein imposed.
[Ord. No. 1042, § 1 (22-185), 9-10-1990]
(a) Any person who fails, neglects or refuses to make any declaration
or return required by this article, any person who fails, neglects
or refuses to submit the list of occupants referred to in Section
22-182 above; any employer who fails, neglects or refuses to deduct
or withhold the tax from his employees; any person who refuses to
permit the officer or any agent designated by him to examine his books,
records and papers; and any person who knowingly makes any incomplete,
false or fraudulent return, or attempts to do anything whatsoever
to avoid the full disclosure of the amount of his net profits or earned
income in order to avoid the payment of the whole or any part of the
tax imposed by this article shall, upon conviction thereof before
any justice of the peace, alderman or magistrate, or court of competent
jurisdiction in the county, be sentenced to pay a fine of not more
than five hundred dollars ($500.00) for each offense and costs, and
in default of payment of said fine and costs to be imprisoned for
a period not exceeding thirty (30) days. Each violation shall constitute
a separate offense, punishable by a like fine or imprisonment for
each day of continued violation.
(b) Any person who divulges any information which is confidential under
the provisions of this article shall, upon conviction thereof before
any justice of the peace, alderman or magistrate, or court of competent
jurisdiction, be sentenced to pay a fine of not more than five hundred
dollars ($500.00) for each offense and costs, and in default of payment
of said fines and costs to be imprisoned for a period not exceeding
thirty (30) days.
(c) The penalties imposed under this section shall be in addition to
any other penalty imposed by any other section of this article.
(d) The failure of any person to receive or procure forms required for
making the declaration or returns required by this article shall not
excuse him from making such declaration or return.
