City of Washington, PA Mercantile License Tax

The license and tax provisions of the article apply to:

Wholesale vendors of or dealers in goods, wares and merchandise, that is those persons who sell to vendors of or dealers in goods, wares and merchandise.

Retail vendors of or dealers in goods, wares and merchandise, that is those vendors or dealers who are not wholesale vendors or dealers.

Persons conducting restaurants or other places where food, drink or refreshments are sold.

Persons conducting places of amusement, that is any place indoors or outdoors where the general public or a limited or a selected number thereof may, upon payment of an established price, attend or engage in any amusement, entertainment, exhibition, contest or recreation, including among other places, theaters, opera houses, motion-picture houses, amusement parks, stadia, arenas, baseball or football parks or fields, skating rinks, circus or carnival tents or grounds, fairgrounds, bowling alleys, billiard or pool rooms, shuffleboard rooms, nine- or ten-pin alleys, riding academies, golf courses, bathing and swimming places, dance halls, tennis courts, archery, rifle or shotgun ranges and other like places.

The article applies to concessionaires who carry on any occupation or business which is described in any of the classifications listed in Subsection B(1) above.

The article applies whether the business is carried on by an individual, partnership, limited partnership, association or corporation.

The article applies not only to any business in existence at the beginning of the license year, but also to any business begun within the license year.

(5)

A person whose business is in part furnishing services and in part the dealing in goods, wares and merchandise must comply with the license and tax provisions with respect to his business in goods, wares and merchandise.

Procurement of licenses and payment of license fees.

Procurement of license.

All persons to whom the article applies, on or before March 1, 1951, and on or before March 1 of each year thereafter, must procure from the City Treasurer, City Hall, Washington, Pennsylvania, for the year beginning March 1, a mercantile license for each of his places of business in Washington. For businesses begun during any license year after March 1, the license must be procured before business is begun. The application for a license must list all applicant's concessionaires and subconcessionaires.

The license must be posted conspicuously at each place of business of the licensee at all times.

A person who sells goods, wares or merchandise by means of vending machines, and who has not otherwise procured a license as a retail vendor or dealer under the article, shall procure one license covering all of his vending machines located in Washington.

Period covered. The license year is from March 1 of one year to February 28, inclusive, of the next year. A license procured after March 1 for the current year is valid only from the date of issue until the end of the year in which it is issued.

Payment of fees. The license fee must be paid to the City Treasurer before a license will be issued.

Amount of fee.

[Amended 1-12-2006 by Ord. No. 1753; 1-11-2007 by Ord. No. 1767]

The license fees for such place of business for all or part of a year, are as follows:

	Wholesale	$50
	Retail	$25
	Combined wholesale and retail	$68
	Broker	$25
	Restaurant	$25

These license fees are in addition to fees for any other licenses which persons to whom this article applies are required to procure under any article or other statute.

Returns and payment of license tax.

Return requirements.

Contents and execution. Every person to whom the article applies must file a return with the City Treasurer, City Hall, Washington, Pennsylvania, on the form furnished. The return must be filled out completely. The taxpayer must supplement the return with such other information as may be necessary in arriving at the actual gross amount of business transacted by him during the period on which the tax is based. An affidavit by the taxpayer must be included certifying to the correctness of the return.

Time of filing.

[1]

If the taxpayer has commenced business before March 1 of the license year, the return must be filed and the tax paid on or before May 15 in the current license year. The first such returns will be due on or before May 15, 1951.

[2]

If the taxpayer first begins business after March 1, 1951, or in any subsequent license year, the first return and payment of tax are due within 40 days from the date of commencing business.

[3]

If the business of the taxpayer is temporary, seasonal or itinerant, the return and payment of tax is due within seven days from the day he completes such business.

Period covered. The tax is payable for every license year or any part thereof during which the taxpayer does business.

Payment of tax. The taxpayer must pay the amount of the tax shown due on the return to the City Treasurer at the time of filing the return.

Rates of tax. The tax is imposed on the annual gross business transacted by the taxpayer at the following rates:

Character of Business	*Tax Rate in Mills per Dollar**
Wholesale	1
Brokers	1
Retail	1 1/2
Restaurant	1 1/2

	NOTE:
	*	One mill equals $1 per $1,000 or 1/10 of 1%.

Gross volume of business.

Exceptions.

The rate of tax applied to the actual gross amount of business transacted by the taxpayer during the entire preceding calendar year, except for those taxpayers:

[1]

Who were not in business during the whole of preceding calendar year;

[2]

Who begins business during the current license year; or

[3]

Whose business is temporary, seasonal or itinerant.

If the taxpayer was not in business during the whole of 1950, his annual gross volume of business is determined by multiplying by 12 the actual gross amount of business transacted by him during the first month he engaged in business.

For example, if a retailer begins business during a license year, and in the first month of his business grosses $10,000, his tax for the tax year would be at the rate of 1 1/2 mills times the gross volume of business for that month times the number of months or fraction of months of the current license year he begins his business, and the next succeeding year his tax will 1 1/2 mills times the gross volume of business for the first month times 12, as follows:

Taxpayer begins business June 15 of the license year and in his first month, ending July 15, grosses $10,000; his tax for the current tax year would be 0.0015 x $10,000 x 6 1/2 (remaining months and fraction of month in year from time of beginning business), and for the next succeeding year his tax will be 0.0015 x $10,000 x 12.

If the business of the taxpayer is temporary, seasonal or itinerant, the rate shall be applied to the actual gross amount of business transacted by him during each period in the license year in which the temporary, seasonal or itinerant business was conducted.

"Gross volume of business" corresponds generally to gross receipts or gross sales, depending on the nature of the business. The gross volume of business shall include not only receipts in money but also, in the case of barter and exchange transactions in which other than money is received as payment or part payment, an amount equal to that which would have been received if full payment had been required in cash. The gross receipts from sales shall include all receipts from any transfer of title or possession, or both, whether conditional, by bailment lease or otherwise, for a consideration.

The tax is imposed on any person who exercises the privilege of carrying on certain businesses within the City of Washington and is measured by the entire annual gross volume of business transacted by him. Receipts from any business transaction are to be included if any event forming a part of the transaction occurs within Washington. Examples of such events are:

Cash transaction in Washington.

Receipt of orders by seller or his agent in Washington by mail or otherwise.

Solicitation within Washington by seller or his agent.

Shipment from Washington.

Brokers, commission merchants and factors are taxable at the rate of one mill on each dollar of gross commissions received by them. However, if a person in addition to acting as a broker, commission merchant or factor also acts as a vendor or dealer and takes title to and sells good, wares and merchandise on his own account, he is required to pay a tax on the entire gross receipts from such sales made on his own account.

(5)

Wholesale or retail vendors and dealers (except to the extent they act as brokers) shall include in their gross volume of business only gross receipts from the vending of goods, wares and merchandise, which do not include stocks, bonds and other evidence of indebtedness.

(6)

The entire gross receipts of vending machines and other mechanical devices which dispense goods, wares and merchandise are to be included in the gross volume of business of the owner or lessor thereof. No deductions may be made therefrom for splits, rentals, commissions or other remuneration paid to persons in charge of the machines and/or to the lessee of premises upon which the machines are located.

(7)

Refunds, credits or allowances given by a vendor or dealer to a purchaser on account of defects in goods, wares and merchandise sold or returned may be deducted from the amount of gross volume of business of the vendor or dealer.

(8)

Trade discounts allowed to customers may be deducted from gross volume of business if they are in the nature of: a) discounts deducted on the face of the bill as a medium of adjusting the list price; and b) discounts unconditionally deducted by customers upon settlement of their bills and allowed as a matter of the established custom of a trade or line of business without regard to the due date of such bills or the form or terms in which such discounts are described or stated on bills of invoice.

(9)

Persons in the service trades shall include in their taxable gross volume of business that portion of their gross receipts resulting from the sale of goods, wares and merchandise.

(10)

The following federal and state excise taxes may be excluded from the gross volume of business, provided such taxes are separately stated on the evidence of charge or sale:

Federal tax on admission and dues.

Federal retailers excise tax on jewelry, furs and fur articles, toilet preparations and luggage.

Pennsylvania liquid fuels tax.

Treatment of particular transactions.

Property traded in. In the case of trade-in transactions in which goods, wares and merchandise are sold and allowance is made for other property which is traded in and is accepted by the vendor or dealer in part payment of the property sold, the allowance made for the property traded in shall be deducted from the selling price of the property sold in computing gross receipts upon which the tax is based. Where the property traded in is subsequently sold by the vendor or dealer, the latter must include in his gross receipts the entire selling price from the sale of such property traded in.

When dealers who are engaged in similar lines of business exchange articles of property and one of them makes payment to the other in addition to the property exchanged by him, the transaction shall constitute sales to each other. The receipt of each dealer is measured by the gross value of the transaction received by him. Where a dealer transfers property, such as an automobile, to another dealer with the understanding that property of identical description will be returned at a subsequent date, such transaction does not constitute a sale and the value of the property exchanged need not be included in the tax base of either dealer.

Property repossessed. Where goods, wares or merchandise sold under a conditional or other installment sale contract are repossessed by the seller, and the repossessed property is subsequently sold, the gross receipts from such sales are to be included in the gross volume of business only to the extent by which the amount of the sale exceeds the balance due on the original sale at the time of repossession. No deduction from gross receipts may be taken at the time of repossession for any unpaid balance due.

Intercompany transactions. Receipts from transactions between affiliated companies, other than those of a purely accommodation nature, are subject to inclusion in gross volume of business.

Interdepartment charges. When one department, branch or division of a corporation or other business entity furnishes goods, wares and merchandise to another department, branch or division of the same corporation or business entity, the amounts recorded on the books to reflect such interdepartmental transactions need not be included in the gross volume of business of the taxpayer.

Exemption and exclusions. The article does not apply to:

Nonprofit corporations and associations organized for religious, charitable or educational purposes.

Agencies of the Government of the United States or of the Commonwealth of Pennsylvania.

Any person vending or disposing of articles of his own growth, production or manufacture or shipment or delivery from the place of growth, production or manufacture thereof. The term "manufacture" means the production of a new article which is separate and distinct from the materials or ingredients of which it is composed.

Any hawker or peddler licensed under any law of the commonwealth.

(5)

Professions and contractors, such as lawyers, doctors, architects, engineers and service trades such as barbers, laundries and cleaning and dyeing establishments, except to such part of their business as may consist of the sale of goods, wares and merchandise.

(6)

That portion of the annual gross volume of business which the Commonwealth of Pennsylvania is prohibited from taxing by reason of the Constitution of the United States and of the Commonwealth of Pennsylvania. Receipts will be excluded as having been derived from interstate commerce transactions only if those transactions directly involved the sale, exchange or transportation of commodities between the states. The citizenship or residence of the parties to the transaction is of no significance, and it is of no significance in which state title to the goods passes or whether the goods are shipped FOB, one state to another. For example:

Sale and delivery in Washington. Receipts are included in the case of sales made by a Washington vendor or dealer to customers located outside Pennsylvania where the property is delivered directly to the purchaser or his agent within Pennsylvania, notwithstanding the fact that the purchaser or his agent intends to, and later does, transport the property to a point outside the state.

Shipment from Washington by vendor or dealer. Receipts are excluded if the Washington vendor or dealer, as a necessary incident to the contract of sale, agrees to and does deliver the property to a purchaser at a point outside Pennsylvania or delivers the property to a common carrier consigned to the purchaser at a point outside Pennsylvania.

Shipments into Pennsylvania from out-of-state warehouse of vendor or dealer. Receipts are excluded if, by the terms of the contract of sale or the established practice of doing business, the vendor or dealer is required to make delivery by transporting or shipping the property from his warehouse situated outside Pennsylvania directly to the purchaser at a point within Pennsylvania.

Shipment into Pennsylvania from out-of-state factory of third party. Receipts are included if the Washington vendor or dealer causes delivery to be made at a point within Pennsylvania from an out-of-state source of supply owned or operated by a third party (one from whom the vendor buys). For example, if a dealer in Washington causes an automobile to be delivered directly to the buyer from the factory of the manufacturer in Detroit, the receipts are included in the dealer's gross volume of business on which the tax is based.

(e)

Delivery from out-of-state factory of vendor or dealer via his Washington office. Receipts are included if the property is shipped from the out-of-state factory or warehouse of a Washington vendor or dealer to his (the vendor's or dealer's) place of business in Pennsylvania, from which point the goods are delivered to the purchaser.

(7)

Receipts from sales to or dealings with governmental agencies, charitable and religious corporations are not to be excluded from the gross volume of business on which the tax is based. The article grants exemption only to the agencies, institutions and persons specified, and not to taxpayers transacting business with such agencies, institutions and persons.

Collection, books and records and examination thereof.

Collection. If the amount of the tax, penalty or interest imposed by this article is not paid when due, payment of the total amount owing will be enforced by suit by the City Treasurer. For this purpose, the due date of the amount of tax computed and reported on a return is the date of filing such return; and the due date of any amount of deficiency of tax not computed or reported in a return properly filed is the date in which the City Treasurer makes an assessment of the deficiency by notice thereof sent to the taxpayer.

Books and records. The taxpayer must maintain such accounting records as will enable him to make a true and accurate return in accordance with the provisions of the article and these regulations. Such accounting records must disclose in detail all data pertaining to the taxpayer's gross volume of business and must be sufficiently complete to enable the Treasurer to verify all transactions. A taxpayer claiming exemptions for receipts from transactions in foreign or interstate commerce, and exclusions of nontaxable receipts, must maintain complete records of such items.

Inspection and examination. The Treasurer is authorized to examine the books, papers and records of any taxpayer or supposed taxpayer in order to verify the accuracy of any return made or, if no return was made, to ascertain the tax to be imposed. He is authorized to examine any person connected with any business concerning the gross volume of business or gross receipts which was or should have been returned for taxation, and for this purpose may compel the production of books, papers and records. The article directs that every taxpayer or supposed taxpayer give to the Treasurer the means, facilities and opportunity for such examinations and investigations.

Interest, cost of collection and penalties.

Interest. If 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 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.