[Adopted 11-20-2007 by Ord. No. 611]
This article shall be known and may be cited as the "Local Services
Tax Ordinance."
The provisions of the local Tax Enabling Act (Act No. 511 of
1965), as amended, are incorporated by reference, as required by law.[1]
[1]
Editor's Note: See 53 P.S. § 6924.101 et seq.
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:
The person, public employee or private agency or firm from
time to time designated by Council of the Borough of Paxtang to collect
or receive the tax levied by this article and administer the provisions
of this article.
The Department of Community and Economic Development of the
Commonwealth of Pennsylvania.
Compensation as this term is defined in Section 13 (relating
to earned income taxes) of the Local Tax Enabling Act, the Act of
Dec. 31, 1965, P.L. 1257, § 13, as amended, 53 P.S. § 6913,
as amended.[1]
An individual, partnership, association, limited liability
corporation, limited liability partnership, corporation, governmental
body, agency or other entity employing one or more persons on a salary,
wage, commission, fee or other compensation basis, including a self-employed
person.
Includes singular and plural number, and male, female and
neuter gender.
Any person, male or female, engaged in any occupation within
the limits of the Borough of Paxtang.
The net income from the operation of a business, profession,
or other activity, as this term is defined in Section 13 (relating
to earned income taxes) of the Local Tax Enabling Act, the Act of
Dec. 31, 1965, P.L. 1251, § 13, as amended, 53 P.S. § 6913,
as amended.[2]
Any trade, profession, business, enterprise, activity or
undertaking of any type, kind or character, including services, domestic
or other, carried on or performed within the limits of the Borough
of Paxtang for which compensation is charged or received, whether
by means of any salary, wages, commissions or fees for services rendered.
The local services tax authorized by Act of December 1, 2004,
No. 222, as amended, levied by this article.
The period from January 1 until December 31 in any year;
a calendar year.
[1]
Editor's Note: Former 53 P.S. § 6913 was repealed with
no direct replacement, effective 6-30-2012; a new chapter, Chapter
5, Consolidated Collection of Local Income Taxes, was added to the
Local Tax Enabling Act, and contains definitions.
[2]
Editor's Note: Former 53 P.S. § 6913 was repealed with
no direct replacement, effective 6-30-2012; a new chapter, Chapter
5, Consolidated Collection of Local Income Taxes, was added to the
Local Tax Enabling Act, and contains definitions.
For specific revenue purposes, an annual tax is hereby levied
and assessed, commencing January 1, 2008, upon the privilege of engaging
in an occupation with a primary place of employment within the Borough
of Paxtang during the tax year. Each natural person who exercises
such privilege for any length of time during any tax year shall pay
the tax provisions of this article. This tax may be used solely for
the following purposes, as the same may be allocated by the Borough
of Paxtang from time to time: (1) emergency services, which shall
include emergency medical services, police services and/or fire services;
(2) road construction and/or maintenance; (3) reduction of property
taxes; or (4) property tax relief through implementation of a homestead
and farmstead exclusion in accordance with 53 Pa.C.S.A. Ch. 85, Subch.
F (relating to homestead property exclusion). No less than 25% of
the funds derived from the tax shall be used for emergency services.
This tax is in addition to all other taxes of any kind or nature heretofore
levied by the Borough of Paxtang. The 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.
A.Â
Exemption. The following persons are exempt from payment of the tax:
(1)Â
Any person who has 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 disability.
(2)Â
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 the purposes of this subparagraph, "reserve component of
the armed forces" shall mean the Untied 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.
(3)Â
Any person whose total of earned income and net profits from all sources within the Borough is less than $12,000 for any calendar year in which the tax is levied is exempt from the payment of the tax for that calendar year. A person filing an exemption certificate pursuant to Subsection B of this section shall have attached to it a copy of all of the person's last pay stubs or W-2 forms from employment within the Borough for the year prior to the fiscal year for which the exemption from the tax is requested.
[Added 1-7-2008 by Ord. No. 613]
B.Â
Procedure to claim exemption.
(1)Â
A person seeking to claim an exemption from the local services tax may annually file an exemption certificate with the Borough of Paxtang and with the person's employer, affirming that person's qualification for exemption pursuant to Subsection A of this section, the year for which the employee is requesting to be exempted from the tax. A copy of the tax exemption certificate shall be provided by the Borough to the Collector. Upon receipt of the exemption certificate and until otherwise instructed by the Borough of Paxtang or except as required by Subsection B(2), 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 exemption certificate form shall be the uniform form provided by the Borough of Paxtang.
(2)Â
With respect to a person who claimed an exemption for a given calendar year from the tax, upon notification to an employer by the person or by the Borough of Paxtang that the person is ineligible for the tax exemption for that calendar year, an employer shall withhold the local services tax from the person under Subsection B(3).
(3)Â
If a person who claimed an exemption for a given calendar year from the tax becomes subject to the tax for the calendar year under Subsection B(2), 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 B(2), 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 of Paxtang may pursue collection under this article.
C.Â
Refunds. The Borough of Paxtang, in consultation with the Collector
and DCED, shall establish procedures for the processing of refund
claims for any tax paid by any person who is eligible for exemption,
which procedures shall be in accord with provisions of the general
municipal law relating to refunds of overpayments and interest on
overpayments. Refunds made within 75 days of a refund request or 75
days after the last day the employer is required to remit the tax
for the last quarter of the calendar year, whichever is later, shall
not be subject to interest. No refunds shall be made for amounts overpaid
in a calendar year that do not exceed $1. The Borough of Paxtang or
the Collector shall determine eligibility for exemption and provide
refunds to exempt persons.
A.Â
Each employer within the Borough of Paxtang and each employer situate
outside of the Borough of Paxtang but who engages in business within
the Borough of Paxtang is hereby charged with the duty of collecting
the tax from each of the employees engaged by him and performing for
him within the Borough of Paxtang and making a return and payment
thereof to the Collector. Further, each employer is hereby authorized
to deduct said tax from the salary, wages, commissions or fees paid
each employee in his employ and whether or not all such services are
performed within the Borough of Paxtang.
B.Â
A person subject to the tax shall be assessed by the employer 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 rate of the 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 tax 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 D of this section.
C.Â
No person shall be subject to the payment of the local services tax
by more than one political subdivision during each payroll period.
D.Â
In the case of concurrent employment, an employer shall refrain from
withholding the 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 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 principal place of employment within two
weeks of its occurrence.
E.Â
The 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 of Paxtang shall provide
to a taxpayer a receipt of payment upon request by the taxpayer.
F.Â
No employer shall be held liable for failure to withhold the tax or for the payment of the withheld tax money to the Borough of Paxtang 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. Further, an employer 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 § 381-40B of this article and this section and remits the amount so withheld in accordance with this article.
G.Â
Employers shall remit the local services taxes to the Borough of
Paxtang within 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 Collector. If the
employer fails to file said return and pay said tax, whether or not
the employer makes collection thereof from the salary, wages, commissions
or fees paid by him to each employee, except as provided in this article,
the employer shall be responsible for the payment of the tax in full
as though the tax had originally been levied against the employer.
In each tax year, each employer shall use his or her employment
records to determine the number of employees from whom such tax shall
be deducted and paid over to the Collector on or before the 30th day
following the end of each calendar quarter of each such tax year.
A.Â
The place of employment shall be determined as of the day the individual
first becomes subject to the tax each payroll period. In the event
an individual is engaged in more than one occupation or an occupation
which requires working in more than one political subdivision during
the calendar year, the priority of claim to collect the tax shall
be in the following order:
(1)Â
The political subdivision in which the individual maintains his principal
office or is principally employed;
(2)Â
The political subdivision in which the individual resides and works,
if such a tax is levied by that political subdivision; and
(3)Â
The political subdivision in which the individual is employed and
which imposes the tax nearest in miles to the individual's home.
B.Â
Any employer to whom an 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 that the employee
will notify other employers of a change in the principal place of
employment within two weeks of its occurrence, shall refrain from
withholding the local services tax from the employee's wages.
C.Â
In case of dispute, a tax receipt of the taxing authority for that
calendar year, declaring that the taxpayer has made prior payment,
constitutes prima facie certification of payment to all other political
subdivisions.
All self-employed individuals engaged in any occupation within the Borough of Paxtang shall be required to comply with this article and pay the pro rata portion of the tax due to the Collector on or before the 30th day following the end of each calendar quarter. In the event a self-employed person is engaged in more than one occupation within or without the Borough or an occupation which requires his working in more than one political subdivision during the year, reporting priority of claims and prima facie certification payment shall be in accordance with § 381-44.
All employers and self-employed individuals residing or having
their place of business outside Paxtang Borough but who engage in
any occupation within Paxtang Borough do by virtue thereof agree to
be bound by and subject themselves to the provisions, penalties and
regulations promulgated under this article with the same force and
effect as though they were residents of Paxtang Borough. Further,
any individual engaged in an occupation within Paxtang Borough 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.
A.Â
It shall be the duty of the Collector to accept and receive payments
of the local services 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.
B.Â
The Collector is hereby charged with the administration and enforcement
of this article 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 article, including provisions
for the examination of the payroll records of any employer subject
to this article; the examination and correction of any return made
in compliance with this article; any payment alleged or found to be
incorrect or as to which overpayment is claimed or found to have occurred.
Any person aggrieved by any decision of the Collector shall have the
right to appeal, consistent with the Local Taxpayer's Bill of
Rights under Act 50 of 1998 and the tax appeal regulations of the
Borough of Paxtang.
C.Â
The Collector 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 Collector
the means, facilities and opportunity for such examination.
A.Â
In the event any tax under this article remains due or unpaid 30
days after the due date above set forth, the Collector may sue for
the recovery of such tax due or unpaid, together with interest and
penalty.
B.Â
If for any reason the tax is not paid when due, interest at the rate
of 6% on the amount of said tax shall be calculated beginning with
the due date of the tax, and a penalty for nonpayment thereof of 5%
of the amount of the unpaid tax for each month or fraction thereof
during which the tax remains unpaid shall be added to the flat rate
of such tax for nonpayment thereof. Where suit is brought for the
recovery of this tax or other appropriate remedy undertaken, the individual
liable therefor shall, in addition, be responsible and liable for
the costs of collection.
The Collector shall attach the wages, commissions and earnings
of any person owing delinquent local services tax or of any person
whose spouse owes delinquent local services tax in accordance with
the Local Tax Enabling Act, 53 P.S. § 6924.101 et seq.
A.Â
Nothing contained in this article shall be construed to empower the
Borough of Paxtang to levy and collect the tax hereby imposed on any
occupational privilege not within the taxing power of the Borough
of Paxtang under the Constitution of the United States or the laws
of the Commonwealth of Pennsylvania.
B.Â
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 individuals as herein provided.
Any person who makes any false or untrue statement on any return
required by this article, or who refuses to allow inspection of any
of the books, records or accounts in his custody or control, setting
forth the number of employees subject to this tax who are in his employment,
whoever fails or refuses to file any return required by this article,
shall be guilty of a violation and shall, upon conviction, be sentenced
to pay a fine of not more than $600 and the costs of prosecution and,
in the default of payment of fine and costs, to undergo imprisonment
for not more than 30 days for each offense or violation, provided
the action to enforce the fine or penalty provided by this article
may be instituted against any person in charge of the business or
any employer who fails or refuses to file a return required by this
article.
