Borough of Edgeworth, PA Article III Business Privilege Tax

[Adopted 1-28-1988 by Ord. No. 424]

§ 117-29 Statutory authority.

This article is enacted under authority of the Local Tax Enabling Act, P.L. 1257, No. 511, December 31, 1965, 53 P.S. §§ 6901-24 (1982),[1] as hereafter amended, supplemented, modified or reenacted from time to time by the General Assembly of Pennsylvania.

[1] Editor's Note: See now 53 P.S. § 6924.101 et seq.

§ 117-30 Definitions and word usage.

A. As used in this article, the following terms shall have the meanings indicated, unless a different meaning clearly appears from the context:

BUSINESS

Carrying on of sales to persons or exercising of any trade, profession or service or function of any commercial nature within the Borough of Edgeworth ("Borough"). "Business" shall not include any portion of gross receipts of the business of any political subdivision or of an authority created under an Act of Assembly or of a nonprofit corporation or association organized for religious, charitable or educational purposes or any employment for a wage or salary.

GROSS RECEIPTS

Cash, credit or property of any kind or nature received or allocable or attributable to business conducted in the Borough without deduction therefrom, on account of the cost of property sold, the material used, labor, service or any other cost of doing business. "Gross receipts" shall exclude or be reduced by:

(1) The amount of any allowance made for goods, wares or merchandise taken by a dealer as trade-in or as part payment for other goods, wares and merchandise, except to the extent that the resale price exceeds the trade-in allowance.

(2) Refunds, credits or allowances given by a taxpayer to a purchaser on account of defects in goods, wares or merchandise sold or on account of goods, wares or merchandise returned.

(3) In the case of financial business, costs of security on other property as it is sold, exchanged, paid at maturity or redeemed and money or credit received in repayment of advances, credits and loans, provided that such costs do not exceed the principal amount of such advances, credits or loans.

(4) In the case of a broker, commissions paid to another broker on account of purchases in conjunction with such broker.

(5) Receipts by dealers from sales to other dealers in the same line where the dealer transfers title or possession at the same price for which he acquired the goods.

(6) Receipts for that portion of business attributable to interstate or foreign commerce or to a bona fide office or place of business regularly maintained outside the limits of the Borough and not for the purpose of evading this tax. Such receipts shall be segregated on the tax return, and only that part of receipts attributable to doing business in the Borough shall be taxed hereunder, provided that the taxpayer shall keep adequate books and records of his business to show clearly, accurately and separately the amount of such sales he is entitled to deduct from the gross volume in order to obtain this exclusion.

(7) Taxes collected as agent for the United States, the Commonwealth of Pennsylvania and/or its political subdivisions.

(8) Receipts from utility service of any person or company whose rates of service are fixed and regulated by the Pennsylvania Public Utility Commission or from any public utility service rendered by any such person or company or from any privilege or transaction involving the rendering of any such public utility service.

(9) Receipts from goods and articles manufactured in the Borough, from the by-products of such manufacture, from minerals, timber, natural resources and farm products manufactured, produced or grown in the Borough or from preparation and processing thereof or from any business relating to manufacturing, production, preparation or processing of minerals, timber and natural resources or farm products by manufacturers, producers and farmers with respect to goods, articles and products of their own manufacture, production or growth, including transportation, loading, unloading, dumping and storage of such goods, articles, products or by-products.

(10) Dues, fees and assessments of any charitable, religious, beneficial or nonprofit organization, provided that this exclusion shall not apply to the consideration paid for food, drinks, refreshments, rooms, valet services and facility rentals furnished by private clubs and other such nonprofit organizations to their members and guests.

(11) Receipts from admissions to motion-picture theaters.

(12) Receipts arising out of the construction of or improvements to residential dwellings.

(13) Discounts allowed to purchasers for prompt payment of their bills.

(14) Charges advanced by a seller for freight, delivery or other transportation for the purchaser in accordance with the terms of a contract of sale.

(15) Receipts based on the value of an exchange or transfer between one seller and another seller where such exchange or transfer is made with the understanding that property of an identical description will be returned by the transferee at a subsequent date, provided that this exclusion shall not apply to any supplemental cash payment received by the transferor incident to the exchange or transfer.

(16) Receipts arising out of a transfer between one department, branch or division of a corporation or other business entity of goods, wares and merchandise to another department, branch or division of the same corporation or other business entity and which are recorded on the books of the enterprise to reflect such interdepartmental transactions.

(17) Receipts not permitted by Pennsylvania or federal law to be the subject of a business privilege tax imposed by a Pennsylvania municipality.

PERSON

Any individual, partnership, limited partnership, association, firm, corporation or other entity engaged in business. Whenever used in any clause prescribing a penalty, the term "person," as applied to partnerships, shall mean the partners thereof and, as applied to corporations and associations, shall mean the officers thereof and, if there are no officers, the shareholders thereof. No such tax shall be assessed and collected on a privilege, transaction, subject or occupation which is subject to a state tax or license fee and which tax or license fee has been held by the courts of Pennsylvania to be the basis for exemption from the imposition of a business privilege tax by a municipality.

RETAIL DEALER or RETAIL VENDOR

Any vendor who sells to the ultimate consumers of his goods, wares and merchandise.

TAX YEAR

The period from January 1 to December 31, inclusive.

TEMPORARY, SEASONAL OR ITINERANT BUSINESS

A business conducted at one location for less than 60 consecutive calendar days.

VENDOR

A person who, from a store, warehouse, lot or other established place of business in the Borough, sells merchandise or other tangible personalty previously purchased by him, such property being in the same state and condition as when purchased by or for such vendor or, if manufactured by him, being sold from a store or warehouse apart from the manufactory.

WHOLESALE DEALER or WHOLESALE VENDOR

Any vendor who sells to dealers or vendors of goods, wares and merchandise with respect to such goods and to no other persons.

B. As used in this article, the masculine shall include the feminine and neuter.

§ 117-31 Imposition of tax.

There is hereby imposed for the first tax year and annually thereafter a business privilege tax for general revenue purposes on the privilege of doing business in the Borough. The rate of the tax on the gross receipts shall be 1 1/2 mills, which shall mean $1.50 per $1,000 gross receipts, except that the rate of the tax on the gross receipts of wholesale dealers or vendors within the Borough shall be one mill, which shall mean $1 per $1,000 of gross receipts.

§ 117-32 Computation of gross receipts.

A. Every person subject to payment of the tax hereby imposed who has commenced business prior to the full calendar year prior to the tax year shall estimate his annual gross receipts upon the actual gross receipts of said immediately preceding calendar year. For the first tax year only, such computation shall be based upon the actual gross receipts collected from March 1 through December 31 of the immediately preceding calendar year.

B. Every person subject to payment of the tax hereby imposed who has commenced or who commences his business before the beginning of the tax year but after the beginning of the full calendar year prior to the tax year shall estimate his annual gross receipts upon the gross receipts of the prior calendar year, taking the monthly average during said period and multiplying the same by 12. In the event that he shall be in business fewer than 90 days in the prior calendar year, he shall be permitted to use sufficient days in the calendar year in which the tax year begins to equal 90 successive days after commencement of business, to take a monthly average thereon, and to multiply the average by 12. For the first tax year only, such computation shall be based upon the monthly average multiplied by 10.

C. Every person subject to payment of the tax hereby imposed who has commenced or commences his business subsequent to the beginning of the tax year and prior to the effective date of this article shall estimate his gross receipts for such tax year upon the gross receipts collected during the period from the commencement of his business to the end of the year, taking the monthly average during the first three months of business and multiplying the same by the number of months from the commencement of business to the end of the tax year. For the first tax year only, such computation shall be based on the monthly average multiplied by 10. In the event that such person shall be in business fewer than 90 days in the tax year, he shall be permitted to use sufficient days in the next succeeding calendar year to equal 90 successive days after commencement of business to take a monthly average thereon and to multiply the average by the number of months from the commencement of his business to the end of the tax year.

D. Every person subject to payment of the tax hereby imposed who engages in business which is temporary, seasonal or itinerant by nature shall estimate the gross receipts for the period said person engages in such temporary, seasonal or itinerant business by a method to be determined by the Tax Collector.

E. The Tax Collector is hereby authorized to accept payment under protest of the amount of business privilege tax claimed by the Borough in any case where the taxpayer disputes the validity or amount of the Borough's claim for tax. If it is thereafter judicially determined by a court of competent jurisdiction that the Borough has been overpaid, the amount of the overpayment shall be refunded to the taxpayer. Any action instituted for such judicial determination shall be instituted within two years of the last day of the period for which the tax is disputed or claim is made.

F. If any person is liable for the same tax on the same subject imposed under the Local Tax Enabling Act,[1] to the Borough and one or more political subdivisions of the state, then and in that event the tax shall be apportioned by such percentage as may be agreed upon by such political subdivisions, but in no event shall the combined taxes of both subdivisions exceed a maximum rate of tax as fixed by said Enabling Act permitting the imposition of such taxes.

[1] Editor's Note: See now 53 P.S. § 6924.101 et seq.

§ 117-33 Returns; license.

A. Every return shall be made upon a form furnished by the Tax Collector. Every person making a return shall certify the correctness thereof by affidavit.

B. Every person subject to the tax imposed by this article who commenced his business on or before January 1 of the full calendar year previous to the beginning of any tax year shall, on or before the first day of August for the first tax year and on or before the first day of June of all subsequent tax years, file with the Tax Collector a return setting forth his name, business, business address and other information as may be necessary in arriving at the actual gross receipts of the preceding calendar year and the amount of the tax due.

C. Every person subject to the tax imposed by this article who has commenced his business before the beginning of any tax year but after January 1 of the full calendar year previous to the beginning of the tax year shall, on or before the first day of August for the first tax year and on or before the first day of June of all subsequent tax years, file with the Tax Collector a return setting forth his name, business address and other information as may be necessary in estimating the gross receipts as calculated under § 117-32B hereof and the amount of tax due.

D. Every person subject to the tax imposed by this article who has commenced or commences his business subsequent to the beginning of the tax year shall, on or before the first day of August for the first tax year and on or before the first day of June of all subsequent tax years, file with the Tax Collector a return setting forth his name, business, business address and other information as may be necessary in estimating the gross receipts as calculated under § 117-32C hereof and the amount of tax due, provided that 100 days have elapsed from the commencement of the business to August 1 of the first tax year and to June 1 of all subsequent tax years. If a taxpayer has not been in business for 100 days as of August 1, 1988, or June 1 of all subsequent tax years, his return shall be filed within 100 days of the commencement of his business.

E. Every person subject to payment of the tax imposed by this article who engages in a business which is temporary, seasonal or itinerant by its nature shall, at a time specified by the Tax Collector, file a return with the Tax Collector setting forth his name, business, business address and other information as may be necessary in estimating gross receipts as calculated in accordance with § 117-32D.

F. Any person going out of or ceasing to do business shall, within seven days from the date of ceasing to do business, file a return showing the actual gross receipts of that tax year in which said person ceased doing business and pay the tax due as computed thereon at the rate herein provided for at the time of filing said return. If such tax has been previously paid based upon estimated gross receipts, the taxpayer shall be entitled to a refund, without interest, of any excess tax paid for the tax year in which business was terminated.

G. After the effective date of this article, any person desiring to conduct or to continue any business, as herein defined, within the Borough shall file with the Tax Collector an application for a business privilege license and shall pay a fee of $5 for the initial license and $5 for each annual renewal thereof.

H. If any person is liable for the same tax on the same subject imposed by the Local Tax Enabling Act[1] to the Borough and one or more political subdivisions of the state, then and in that event the tax shall be apportioned by such percentage as may be agreed upon by such political subdivisions, but in no event shall the combined taxes of both political subdivisions exceed a maximum rate of tax as fixed by said Enabling Act permitting the imposition of such taxes.

[1] Editor's Note: See now 53 P.S. § 6924.101 et seq.

§ 117-34 Payment of tax; penalty and interest for late payment.

A. The tax imposed by this article for the first tax year which shall include the period from March 1 through December 31, shall be due and payable as follows:

(1) For those taxpayers who are required to file a return on August 1, 1/2 of the tax shall be due and payable on this date, and 1/2 of the tax shall be due and payable on October 1.

(2) For those taxpayers who are required to file a return subsequent to August 1 but prior to October 1, 1/2 of the tax shall be due and payable on the date on which the taxpayer is required to file a return, and 1/2 of the tax shall be due and payable on October 1.

(3) For those taxpayers who are required to file a return on or subsequent to October 1, the entire amount of the tax shall be due and payable on the date on which the taxpayer is required to file a return.

B. For the second and subsequent years this tax is imposed, the tax shall be due and payable on the date on which the taxpayer is required to file a return.

C. In the event that the amount due and payable is not paid on the dates required as set forth above, a penalty of 5% shall be added thereto, plus an additional interest of 1% per month or fractional part of a month until paid.

D. The Tax Collector shall, upon payment to him of the tax hereby imposed, give, if requested, the person paying the same a receipt therefor.

§ 117-35 Collection of taxes; records; appeal.

A. The Tax Collector is charged with the duties of collecting and receiving taxes, fines and penalties imposed by this article. It shall be his duty to keep a record showing the amount received by him, from whom received and the date of such receipt.

B. The Tax Collector and his duly appointed agents are hereby empowered with the approval of the Council of the Borough to prescribe, adopt and promulgate rules and regulations relating to any matter pertaining to the administration and enforcement of this article, including provisions for the examination and correction of returns and payments alleged or found to be incorrect or overpayments claimed or found to have occurred, and charged with enforcing the provisions of this article and any rules and/or regulations promulgated pursuant hereto.

C. In the event that the person to be assessed neglects or refuses to make a return, then, in such case, the Tax Collector or his duly appointed agents shall assess said person or persons on such an amount of gross receipts as said Tax Collector or his agents deem reasonable and appropriate. In all cases of assessment, the Tax Collector or his duly appointed agents shall give the parties assessed a notice in which shall be stated the trade, business, occupation or class and the amount of the business privilege tax imposed.

D. The taxpayer shall maintain such record and books of account as will enable him to make a true and accurate return in accordance with this article. Such accounts and records must disclose in detail the gross receipts and other data pertaining to the taxpayer's gross receipts and must be sufficiently complete to enable the Tax Collector or his agents to verify all transactions. The Tax Collector or his agents are hereby authorized to examine the books, papers and records of any person or persons subject to or supposed to be subject to the tax imposed by this article in order to verify the accuracy of the return made or, if no return was made, ascertain the tax due.

E. Any person aggrieved by any decision of the Tax Collector shall have the right to appeal to the Court of Common Pleas.

§ 117-36 Confidentiality.

Any information gained by the Tax Collector or any other official, agent or employee of the Borough as a result of any returns, investigations, hearings or verifications required or authorized by this article shall be confidential, except in accordance with proper judicial order or as otherwise provided by law.

§ 117-37 Suit for collection.

A. The Tax Collector or his duly appointed agents shall have the power, in the name of the Borough, to institute proceedings against persons' who violate the provisions of this article.

B. If, for any reason, the tax is not paid when due and 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 interest and penalties herein imposed.

§ 117-38 Violations and penalties.

Any person who shall conduct, transact or engage in any of the businesses subject to the tax imposed by this article without having secured a business license for the year or any person who shall fail to file a tax return as required by the provisions of this article or any person who shall willfully file a false return shall, upon conviction thereof, be sentenced to pay a fine of not more than $300 and/or to imprisonment for a term not to exceed 90 days. Every day that a violation of this article continues shall constitute a separate offense.