[Adopted 12-3-2007 by Ord. No. 713]
This article shall be known and may be cited as the "Local Services Tax."
The following words and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context or language clearly indicates or requires a different meaning:
- BOROUGH MANAGER
- The Borough Manger of the Borough of Hellertown.
- BOROUGH OF HELLERTOWN
- The area within the corporate limits of the Borough of Hellertown (hereinafter "Borough" and/or "municipality")
- Any individual, partnership, association, corporation, government body, agency or other entity employing one or more persons on a salary, wage, commission or other compensation basis, including a self-employed person.
- FISCAL YEAR
- The period beginning January 1 and ending December 31 of each year.
- HE, HIS or HIM
- Indicates the singular and plural number, as well as the male, female and neuter gender.
- Includes earned income and net profits from whatever sources within the political subdivision.
- Any person, male or female, engaged in any occupation, trade or profession within the corporate limits of the Borough of Hellertown.
- Any trade, profession, business or undertaking of any type, kind or character, including services, domestic or other, carried on or performed within the corporate limits of the Borough of Hellertown for which compensation is charged or received, whether by means of salary, wages, commissions or fees for services rendered.
- Local services tax in the amount of $52 levied by this article.
For police, fire or emergency services, road construction or maintenance or for the reduction of property taxes a tax is hereby levied upon the privilege of engaging in an occupation within the corporate limits of the Borough of Hellertown during the fiscal year of 2008 and all proceeding fiscal years. Each natural person who exercises such privilege for any length of time during the year shall pay a tax in the amount of $52 in accordance with the provisions of this article. This tax is in addition to all other taxes of any kind or nature heretofore levied by the Borough of Hellertown.
Restricted use. Any municipality deriving funds from the local service tax may only use the funds for:
Emergency services, which shall include emergency medical services, police services and/or fire services.
Road construction and/or maintenance.
Reduction of property taxes.
Property tax relief through implementation of a homestead and farmstead exclusion in accordance with 53 Pa.C.S.A. Chapter 85 Subchapter F (relating to homestead property exclusion).
The Borough shall use no less than 25% of the funds derived from the local services tax for emergency services.
In the event that the Borough decides to implement a homestead and farmstead exclusion for purposes of providing property tax relief, the Borough shall comply with the terms and conditions set forth in Act 7-2007, which terms and conditions are incorporated in this article by reference and made a part hereof.
Each employer within the Borough of Hellertown, as well as those employers outside the Borough of Hellertown but who engage in business within the Borough of Hellertown, is hereby charged with the duty of collecting from each of his employees engaged by him and performing for him within the Borough of Hellertown the said tax of $52 per annum and making a return and payment thereof to the Borough Manager and/or the Borough's designee authorized to act on behalf of the Borough in obtaining said tax and forwarding any collected taxes to the Borough. Further, each employer is hereby authorized to deduct this tax from each employee in his employ, whether said employee is paid by salary, wages or commission, and whether or not part or all of such services are performed within the Borough of Hellertown. All employers shall be required to remit the local services taxes 30 days after the end of each quarter of the calendar year.
A person subject to the local services tax shall be assessed a pro rata share of the tax for each payroll period in which the person is engaging in an occupation. The pro rata share of the tax assessed on the person for a payroll period shall be determined by dividing the combined rate of the local services tax levied for the calendar year by the number of payroll periods established by the employer for the calendar year. For purposes of determining the pro rata share, an employer shall round down the amount of the tax collected each payroll period to the nearest 1/100 of a dollar. Collection of the local services tax levied under this section shall be made on a payroll-period basis for each payroll period in which the person is engaging in an occupation, except as provided in Subsection E.
If the Saucon Valley School District levied an emergency and municipal services tax on the effective date of Act 7-2007, the school district may continue to levy the local services tax in the same amount the Saucon Valley School District collected on the effective date of Act 7-2007. However, if the Borough of Hellertown in whole or in part within the school district subsequently levies the local services tax, the school district may only collect $5 on persons employed within the municipality each calendar year. If the school district did not levy an emergency and municipal services tax on the effective date of Act 7-2007, the school district shall be prohibited from levying the local services tax within the Borough. If the Saucon Valley School District and Borough of Hellertown both levy a local services tax at a combined rate exceeding $10, the school district's pro rata share of the aggregate local services taxes levied on persons employed within the Borough of Hellertown shall be collected by the Borough or its tax officer based on payroll periods as provided under Subsection A and shall be paid to the school district on a quarterly basis within 60 days of receipt by the municipality or its tax officer.
In the case of concurrent employment, an employer shall refrain from withholding the local services tax if the employee provides a recent pay statement from a principal employer that includes the name of the employer, the length of the payroll period and the amount of the local services tax withheld, and a statement from the employee that the pay statement is from the employee's principal employer and the employee will notify other employers of a change in the principal place of employment within two weeks of its occurrence.
The local services tax shall be no more than $52 on each person for each calendar year, irrespective of the number of political subdivisions within which a person may be employed. The Borough shall provide a taxpayer a receipt of payment upon request by the taxpayer.
The Borough shall adopt regulations for the processing of refund claims for overpaid local services taxes for any calendar year. The regulations shall be consistent with 53 Pa.C.S.A. §§ 8425 and 8426. Refunds made within 75 days of a refund request or 75 days after the last day the employer is required to remit the local services tax for the last quarter of the calendar year under § 405-38 of this article, whichever is later, shall not be subject to interest imposed under 53 Pa.C.S.A. § 8426. The Borough shall only provide refunds for amounts overpaid in a calendar year that exceed $1.
For purposes of this section of the article, "combined rate" shall mean the aggregate annual rate of the local services tax levied by a school district and a municipality located in whole or in part within the school district.
No employer shall be held liable for failure to withhold the local services tax or for the payment of the withheld tax money to the Borough if the failure to withhold taxes arises from incorrect information submitted by the employee as to the employee's place or places of employment, the employee's principal office or where the employee is principally employed; and provided, further, that an employee shall not be liable for payment of the local services tax in an amount exceeding the amount withheld by the employer if the employer complies with the provisions of §§ 405-42 and 405-36 of this article and remits the amount so withheld in accordance with this section; and provided, further, that employers shall be required to remit the local services taxes 30 days after the end of each quarter of a calendar year.
Each employer shall prepare and file a return showing a computation of the tax on forms to be supplied to him by the Borough Manager or the Borough's designee, as determined by the Borough. Each employer, in filing this return and making payment of the tax withheld from his employees, shall be entitled to retain a commission calculated at the rate of 2% of the gross tax due and payable, provided that such tax is collected and paid over by the employer on or before the dates hereinafter set forth. It is further provided that, if the employer fails to file said return and pay said tax, whether or not he makes collection thereof from the salary, wages or commissions paid by him to said employee, the employer shall be responsible for the payment of the tax, in full, without deducting a commission and as though the tax had already been levied against him. The Borough shall provide the taxpayer with a receipt to verify payment upon request of the taxpayer.
Each employer shall use his employment records for the first day of January to the 31st day of March 2008 for determining the number of employees from whom said tax shall be deducted and paid over to the Borough Manager and/or the Borough's designee on or before April 30, 2008.
Supplemental reports and payment of tax due thereon shall be made by each employer on July 31, 2008; October 31, 2008 and January 31, 2009 for new employees as reflected on his employment records from April 1, 2008 to June 30, 2008, July 1, 2008 to September 30, 2008; and October 1, 2008 to December 31, 2008. Payment of tax due on these supplemental reports shall be made on July 31, 2008; October 31, 2008 and January 31, 2009, respectfully. Thereafter the tax shall continue to be enforced on a calendar-year basis.
Each self-employed individual who performs services of any type of kind, engaged in any occupation or profession within the Borough of Hellertown, shall be required to comply with this article and pay the tax to the Borough Manager or the Borough's designee on or before April 30, 2008, or as soon thereafter as he engages in an occupation.
Each individual who shall have more than one occupation within the Borough of Hellertown shall be subject to the payment of this tax on his principal occupation, and his principal employer shall deduct this tax and deliver to him evidence of deductions on a form to be furnished to the employer by the Borough Manager or the Borough's designee, which form shall be evidence of deduction having been made and, when presented to any other employer, shall be authority of such employer to not deduct this tax from the employee's wages but to include such employee on his return by setting forth his name, address and the name or account number of the employer who deducted this tax.
In the event a person is engaged in more than one occupation, or an occupation which requires his working in more than one political subdivision during the calendar year, the priority of claim to collect such local services tax shall be in the following order: First, the political subdivision in which a person maintains his principal office or is principally employed; second, the political subdivision in which the person resides and works, if such a tax is levied by that political subdivision; third, the political subdivision in which a person is employed and which imposes the tax nearest in miles to the person's home. The place of employment shall be determined as of the day the taxpayer first becomes subject to the tax during the calendar year. It is the intent of this provision that no person shall pay more than $52 in any calendar year. In case of dispute, a tax receipt of the taxing authority for that calendar year, declaring that the taxpayer has made prior payment, shall constitute prima facie certification of payment to all other political subdivisions.
All employers and self-employed individuals residing or having their place of business outside of the Borough of Hellertown but who perform services of any type or kind, or engage in any occupation or profession within the Borough of Hellertown, do, by virtue thereof, agree to be bound by and subject themselves to the provisions, penalties and regulations as though they were residents of the Borough of Hellertown. Further, any individual engaged in an occupation within the Borough of Hellertown and an employee of a nonresident employer may, for the purpose of this article, be considered a self-employed person, and in the event this tax is not paid, the Borough shall have the option of proceeding against either the employer or employee for the collection of this tax as hereinafter provided.
The Borough of Hellertown levying the local services tax shall exempt the following person from the local services tax:
Any person who served in any war or armed conflict in which the United States was engaged and is honorably discharged or released under honorable circumstances from active service if, as a result of military service, the person is blind, paraplegic or a double or quadruple amputee or has a service-connected disability declared by the United States Veterans Administration or its successor to be a total one-hundred-percent permanent disability.
Any person who serves as a member of a reserve component of the armed forces and is called to active duty at any time during the taxable year.
For purposes of this subsection, "reserve component of the armed forces" shall mean the United States Army Reserve, United States Navy Reserve, United States Marine Corps Reserve, United States Coast Guard Reserve, United States Air Force Reserve, the Pennsylvania Army National Guard or the Pennsylvania Air National Guard.
Any individual who derives earned income and net profits from all sources within the Borough of Hellertown of less than $12,000 per year from his occupation shall be exempt for the calendar year in which the local services tax is levied.
A person seeking to claim an exemption from the local services tax may annually file an exemption certificate with the Borough of Hellertown and with the person's employer affirming that the person reasonably expects to receive earned income and net profits from all sources within the Borough of less than $12,000 in the calendar year for which the exemption certificate is filed. In the event the Borough utilizes a tax collection officer, the Borough shall provide a copy of the exemption certificate to that officer. The exemption certificate shall have attached to it by the employee a copy of all of the employee's last pay stubs or W-2 forms from employment within the Borough for the year prior to the fiscal year for which the employee is requesting to be exempted from the local services tax. Upon receipt of the exemption certificate and until otherwise instructed by the Borough levying the tax or except as required Subsection C, the employer shall not withhold the tax from the person during the calendar year or the remainder of the calendar year for which the exemption certificate applies. Employers shall ensure that the exemption certificate forms are readily available to employees at all times and shall furnish each new employee with a form at the time of hiring. The Department of Community and Economic Development shall develop and make available to the Borough and employers uniform exemption certificates required by this subsection pursuant to Act 7-2007.
With respect to a person who claimed an exemption for a given calendar year from the local services tax, upon notification to an employer by the person or by the political subdivision that the person has received earned income and net profits from all sources within that political subdivision equal to or in excess of $12,000 in that calendar year or that the person is otherwise ineligible for the tax exemption for that calendar year, or upon an employer's payment to the person of earned income within the Borough in an amount equal to or in excess of $12,000 in that calendar year, an employer shall withhold the local services tax from the person under Subsection D.
If a person who claimed an exemption for a given calendar year from the local services tax becomes subject to the tax for the calendar year under Subsection C, the employer shall withhold the tax for the remainder of that calendar year. The employer shall withhold from the person, for the first payroll period after receipt of the notification under Subsection C, a lump sum equal to the amount of tax that was not withheld from the person due to the exemption claimed by the person under this subsection, plus the per-payroll amount due for that first payroll period. The amount of tax withheld per payroll period for the remaining payroll periods in that calendar year shall be the same amount withheld for other employees. In the event the employment of a person subject to withholding of the tax under this subsection is subsequently severed in that calendar year, the person shall be liable for any outstanding balance of tax due, and the Borough levying the tax may pursue collection under this article.
It shall be the duty of the Borough Manager or the Borough's designee to accept and receive payments of this tax and to keep a record thereof showing the amount received by him from each employer or self-employed person, together with the date the tax was received.
The Borough Manager or the Borough's designee is hereby charged with the administration and enforcement of this article and is hereby charged and empowered 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 of payroll records of any employer subject to this article; the examination and correction of any return made in compliance with the article; and any payment alleged or found to be incorrect or as to which overpayment is claimed or found to have occurred, or any payment made by a taxpayer who is engaged in a business or occupation or businesses or occupations from which he derives less than $12,000 per year. Any person aggrieved by any decision of the Borough Manager shall have the right to appeal to the Court of Common Pleas of Northampton County as in other cases provided.
The Borough Manager or the Borough's designee is hereby authorized to examine the books and payroll records of any employer in order to verify the accuracy of any return made by an employer or, if no return was made, to ascertain the tax due. Each employer is hereby directed and required to give the Borough Manager the means, facilities and opportunity for such examination.
The Borough Manager or Borough's designee has the authority to collect any delinquent and/or unpaid local services tax. The Borough Manager and/or the Borough designee shall demand, receive and collect from all corporations, political subdivisions, associations, companies, firms or individuals employing persons owing delinquent local services tax or whose spouse owes delinquent local services tax, or having in possession unpaid commissions or earnings belonging to any person or persons owing delinquent local services tax or whose spouse owes delinquent local services tax, upon the presentation of a written notice and demand certifying that the information contained therein is true and correct and containing the name of the taxable person or the spouse thereof and the amount of tax due.
Upon the presentation of such written notice and demand, it shall be the duty of any such corporation, political subdivision, association, company, firm or individual to deduct from the wages, commissions or earnings of such individual employees, then owing or that shall within 60 days thereafter become due, or from any unpaid commissions or earnings of any such taxable income in its or his possession or that shall within 60 days thereafter come into its or his possession, a sum sufficient to pay the respective amount of the delinquent local services tax and costs shown upon the written notice or demand, and to pay the same to the Borough Manager or the Borough's designee of the taxing district in which such delinquent tax was levied within 60 days after such notice shall have been given.
No more than 10% of the wages, commissions or earnings of the delinquent taxpayer or spouse thereof may be deducted at any one time for delinquent local services tax. Such corporation, political subdivision, association, firm or individual shall be entitled to deduct from the moneys collected from each employee the costs incurred from the extra bookkeeping necessary to record such transactions, not exceeding 2% of the amount of money so collected and paid over to the Borough.
Upon the failure of any such corporation, political subdivision, association, company, firm or individual to deduct the amount of such taxes or to pay the same over to the Tax Collector, less the cost of bookkeeping involved in such transaction, as herein provided, within the time hereby required, such corporation, political subdivision, association, firm or individual shall forfeit and pay the amount of such tax for each such individual whose taxes are not withheld and paid over or that are withheld and not paid over together with a penalty of 10% added thereto, to be recovered by an action of assumpsit in a suit to be instituted by the Tax Collector or by the proper authorities of the taxing district as debts of like amount are now by law recoverable, except that such person shall not have the benefit of any stay of execution or exemption law. The Tax Collector shall not proceed against a spouse or his employer until he has pursued collection remedies against the delinquent taxpayer and his employer under this section.
In the event that any tax under this article remains due or unpaid 30 days after the due dates above set forth, the Borough Manager or the Borough's designee may sue for the recovery of any such tax due or unpaid under this article, together with interest and penalty.
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 shall be calculated, beginning with the due date of said tax, and a penalty of 5% shall be added to the flat rate of said tax for nonpayment thereof. Where suit is brought for the recovery of this tax, the individual liable therefor shall, in addition, be responsible and liable for the costs of collection.
Whoever makes any false or untrue statement on any return required by this article, or who refuses inspection of his books, records or accounts in his custody and control setting forth the number of employees subject to this tax who are in his employment, or whoever fails or refuses to file any return required by this article shall, upon conviction before any Magisterial District Judge, be sentenced to pay a fine for each offense of not more than $600 or be imprisoned for not more than 90 days, or both. It is further provided that the action to enforce the fine and penalty herein provided may be instituted against any person in charge of the business of any employer who has failed or refuses to file a return required by this article.
Nothing contained in this article shall be constructed to empower the Borough of Hellertown to levy and collect the tax hereby imposed on any occupation not within the taxing power of the Borough under the Constitution of the United States and the laws of the Commonwealth of Pennsylvania.
If the tax hereby imposed under the provisions of this article shall be held by any court of competent jurisdiction to be in violation of the Constitution of the United States or of the laws of the Commonwealth of Pennsylvania as to any individual, the decision of the court shall not affect or impair the right to impose or collect said tax or the validity of the tax so imposed on other persons or individuals as herein provided.
The tax imposed by this article shall continue in force on a calendar-year basis without annual reenactment unless the rate of the tax is subsequently changed.