[HISTORY: Adopted by the Board of Supervisors
of the Township of Lower Gwynedd 11-8-2011 by Ord. No. 481.[1] Amendments noted where applicable.]
[1]
Editor's Note: This ordinance also repealed former Ch. 890,
Earned Income Tax, passed 11-27-1995 by Ord. No. 319, as amended.
This chapter shall be known and may be cited as the "Lower Gwynedd
Township Earned Income Tax Ordinance."
The Tax Officer authorized by Lower Gwynedd Township to collect
income taxes levied prior to January 1, 2012.
An enterprise, activity, profession or any other undertaking
of an unincorporated nature conducted for profit or ordinarily conducted
for profit whether by a person, partnership, association or any other
entity.
A sole proprietorship, corporation, joint-stock association
or company, partnership, limited partnership, limited liability company,
association, business trust, syndicate or other commercial or professional
activity organized under the laws of this commonwealth or any other
jurisdiction.
A certified public accountant, public accountant or firm,
as provided for in the Act of May 26, 1947 (P.L. 318, No. 140), known
as the "CPA Law."[1]
A written demand for payment made by a Tax Officer or tax
collection district for income taxes collected by another Tax Officer
or tax collection district.
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. The term
shall include an entity which is classified as a corporation for federal
income tax purposes.
The calendar year for which the tax is levied.
The Department of Community and Economic Development of the
commonwealth.
The place where a person lives and has a permanent home and
to which the person has the intention of returning whenever 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 voluntarily 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 the person to adopt some other permanent home.
In the case of a business, domicile is that place considered as the
center of business affairs and the place where its functions are discharged.
The compensation as required to be reported to or as determined
by the Department of Revenue under Section 303 of the Act of March
4, 1971 (P.L. 6, No. 2), known as the "Tax Reform Code of 1971,"[2] and rules and regulations promulgated under that section.
Employee business expenses as reported to or determined by the Department
of Revenue under Article III of the Tax Reform Code of 1971 shall
constitute allowable deductions in determining earned income. The
term does not include offsets for business losses. The amount of any
housing allowance provided to a member of the clergy shall not be
taxable as earned income.
The tax levied by Lower Gwynedd Township on earned income
and net profits.
The actual tax rate levied by Lower Gwynedd Township on a
taxpayer based on the total of all income taxes imposed under this
act and all other acts, adjusted under Section 311 of the LTEA.[3]
The actual local services tax rate levied by Lower Gwynedd
Township on taxpayers based on the total of all local services taxes
imposed under this act and all other acts, adjusted under Section
311 of the LTEA.[4]
A person, business entity or other entity, employing one
or more persons for a salary, wage, commission or other compensation.
The term includes the commonwealth, a political subdivision and an
instrumentality or public authority of either. For purposes of penalties
under this chapter, the term includes a corporate officer.
Except as set forth in Section 511(b) of the LTEA,[5] an earned income and net profits tax, personal income
tax or other tax that is assessed on the income of a taxpayer levied
by Lower Gwynedd Township under the authority of this act or any other
act.
An entity formed by two or more Tax Collection Committees
for the purpose of income tax collection in more than one tax collection
district.
The Pennsylvania Local Tax Enabling Act, P.L. 1257, 1965,
as amended.[6]
The net income from the operation of a business, other than
a corporation, as required to be reported to or as determined by the
Department of Revenue under Section 303 of the act of March 4, 1971
(P.L. 6, No. 2), known as the "Tax Reform Code of 1971,"[7] and rules and regulations promulgated under that section.
The term does not include income under any of the following paragraphs:
A person or business domiciled outside Lower Gwynedd Township.
An income tax levied by Lower Gwynedd Township on nonresidents.
The part of the tax register that includes withholding tax
rates as provided in Section 511(a)(3) of the LTEA.[8]
A natural person.
The calendar year before the current year.
A business entity or person appointed as a Tax Officer by
a Tax Collection Committee.
Any and all public bodies, authorities, agencies, instrumentalities,
political subdivisions, intermediate units, councils, boards, commissions
or similar governmental entities.
A person or business domiciled in Lower Gwynedd Township.
An income tax levied by Lower Gwynedd Township on residents.
The Tax Officer administering and collecting income taxes
for the tax collection district in which a taxpayer is domiciled.
The calendar year following the current year.
Includes:
In the case of an earned income and net profits tax, earned
income and net profits.
In the case of a personal income tax, income enumerated in Section
303 of the act of March 4, 1971 (P.L. 6, No. 2), known as the "Tax
Reform Code of 1971,"[9] as reported to and determined by the Department of Revenue,
subject to correction for fraud, evasion or error, as finally determined
by the commonwealth.
A public nonprofit entity established for the administration
and collection of taxes.
The committee established to govern each tax collection district
for the purpose of income tax collection. The term shall include a
joint Tax Collection Committee.
A tax collection district established under Section 504 of
the LTEA,[10] encompassing political subdivisions in Montgomery County,
including Lower Gwynedd Township.
A political subdivision, public employee, tax bureau, county,
except a county of the first class, or private agency which administers
and collects income taxes for one or more tax collection districts.
Unless otherwise specifically provided, for purposes of the obligations
of an employer, the term shall mean the Tax Officer for the tax collection
district within which the employer is located or, if an employer maintains
workplaces in more than one district, the Tax Officer for each such
district with respect to employees principally employed therein.
A person or business required under this chapter to file
a return of an income tax or to pay an income tax.
Tax returns, supporting schedules, correspondence with auditors
or taxpayers, account books and other documents, including electronic
records, obtained or created by the Tax Officer to administer or collect
a tax under this chapter. The term includes documents required by
Section 509(e) of the LTEA.[11] The term "electronic records" includes data and information
inscribed on a tangible medium or stored in an electronic or other
medium and which is retrievable in perceivable form.
A database of all county, municipal and school tax rates
available on the Internet as provided in Section 511(a)(1) of the
LTEA.[12]
Lower Gwynedd Township, Montgomery County, Pennsylvania.
An income tax levied by a political subdivision under the
authority of this chapter or any other ordinance, or any other tax
levied by a municipality or school district for which employer withholding
may be required under this chapter.
[1]
Editor's Note: See 63 P.S. § 9.1 et seq.
[2]
Editor's Note: See 72 P.S. § 7303.
[3]
Editor's Note: See 53 P.S. § 6924.311.
[4]
Editor's Note: See 53 P.S. § 6924.311.
[5]
Editor's Note: See 53 P.S. § 6924.511(b).
[6]
Editor's Note: See 53 P.S. § 6924.511(b).
[7]
Editor's Note: See 72 P.S. § 7303.
[8]
Editor's Note: See 53 P.S. § 6924.511(a)(3).
[9]
Editor's Note: See 72 P.S. § 7303.
[10]
Editor's Note: See 53 P.S. § 6924.504.
[11]
Editor's Note: See 53 P.S. § 6924.509(e).
[12]
Editor's Note: See 53 P.S. § 6924.511(a)(1).
(a)
The tax levied under this chapter shall be applicable to earned income
received and to net profits earned in the period beginning January
1 of the current year and ending December 31 of the current year,
or for taxpayer fiscal years beginning in the current year, except
that taxes imposed for the first time shall become effective from
the date specified in the ordinance or resolution, and the tax shall
continue in force on a calendar year or taxpayer fiscal year basis,
without annual reenactment, unless the rate of the tax is subsequently
changed. Changes in rate shall become effective on the date specified
in the ordinance. A tax for general revenue purposes of 1% is hereby
imposed on the following:
(1)
Earned income, as defined by this chapter, received by residents
of the Township, on or after January 1, 2012;
(2)
Earned income, as defined by this chapter, received by nonresidents
of the Township for work done or services performed or rendered in
the Township on or after January 1, 2012;
(3)
Net profits earned on or after January 1, 2012, of businesses,
professions, and other activities conducted by residents in the Township,
and;
(4)
Net profits earned on or after January 1, 2012, of businesses,
professions, and other activities conducted in the Township, by nonresidents.
(b)
The tax levied under Paragraphs (a)(1) and (2) herein shall relate
to and be imposed upon salaries, wages, commissions, and other compensation
paid by an employer or on his behalf to any person who is employed
by or renders services to him. The tax levied under Paragraphs (a)(3)
and (4) herein shall relate to and be imposed on the net profits of
any business, profession, or enterprise carried on by any person as
owner or as proprietor, either individually or in association with
some other person or persons.
(a)
Application.
(1)
Income taxes shall be applicable to taxable income earned or
received based on the method of accounting used by the taxpayer in
the period beginning January 1 of the current year and ending December
31 of the current year, except that taxes imposed for the first time
and changes to existing tax rates shall become effective on January
1 or July 1, as specified in the ordinance or resolution, and the
tax shall continue in force on a calendar year or taxpayer fiscal
year basis, without annual reenactment, unless the rate of the tax
is subsequently changed.
(2)
For a taxpayer whose fiscal year is not a calendar year, the
Tax Officer shall establish deadlines for filing, reporting and payment
of taxes which provide time periods equivalent to those provided for
a calendar year taxpayer.
(3)
Partial domicile. The taxable income subject to tax of a taxpayer
who is domiciled in the Township for only a portion of the tax year
shall be an amount equal to the taxpayer's taxable income multiplied
by a fraction, the numerator of which is the number of calendar months
during the tax year that the individual is domiciled in the Township,
and the denominator of which is 12. A taxpayer shall include in the
numerator any calendar month during which the taxpayer is domiciled
for more than half the calendar month. A day that a taxpayer's
domicile changes shall be included as a day the individual is in the
new domicile and not the old domicile. If the number of days in the
calendar month in which the individual lived in the old and new domiciles
are equal, the calendar month shall be included in calculating the
number of months in the new domicile.
(4)
Declaration and payment. Except as provided in Paragraph (a)(2),
taxpayers shall declare and pay income taxes as follows:
A.
Every taxpayer shall, on or before April 15 of the succeeding
year, make and file with the resident Tax Officer, a final return
showing the amount of taxable income received during the period beginning
January 1 of the current year and ending December 31 of the current
year, the total amount of tax due on the taxable income, the amount
of tax paid, the amount of tax that has been withheld under Section
512 of the LTEA[1] and the balance of tax due. All amounts reported shall
be rounded to the nearest whole dollar. At the time of filing the
final return, the taxpayer shall pay the resident Tax Officer the
balance of the tax due or shall make demand for refund or credit in
the case of overpayment.
[1]
Editor's Note: See 53 P.S. § 6924.512.
B.
Every taxpayer making net profits shall, by April 15 of the
current year, make and file with the resident Tax Officer a declaration
of the taxpayer's estimated net profits during the period beginning
January 1 and ending December 31 of the current year, and shall pay
to the resident Tax Officer in four equal quarterly installments the
tax due on the estimated net profits. The first installment shall
be paid at the time of filing the declaration, and the other installments
shall be paid on or before June 15 of the current year, September
15 of the current year and January 15 of the succeeding year, respectively.
C.
Any taxpayer who first anticipates any net profit after April
15 of the current year shall make and file the declaration required
on or before June 15 of the current year, September 15 of the current
year or December 31 of the current year, whichever date next follows
the date on which the taxpayer first anticipates such net profit,
and shall pay to the resident Tax Officer in equal installments the
tax due on or before the quarterly payment dates that remain after
the filing of the declaration.
D.
Every taxpayer shall, on or before April 15 of the succeeding
year, make and file with the resident Tax Officer a final return showing
the amount of net profits earned or received based on the method of
accounting used by the taxpayer during the period beginning January
1 of the current year, and ending December 31 of the current year,
the total amount of tax due on the net profits and the total amount
of tax paid. At the time of filing the final return, the taxpayer
shall pay to the resident Tax Officer the balance of tax due or shall
make demand for refund or credit in the case of overpayment. Any taxpayer
may, in lieu of paying the fourth quarterly installment of the estimated
tax, elect to make and file with the resident Tax Officer on or before
January 31 of the succeeding year, the final return.
E.
The department, in consultation with the Department of Revenue,
shall provide by regulation for the filing of adjusted declarations
of estimated net profits and for the payments of the estimated tax
in cases where a taxpayer who has filed the declaration required under
this subsection anticipates additional net profits not previously
declared or has overestimated anticipated net profits.
F.
Every taxpayer who discontinues business prior to December 31
of the current year shall, within 30 days after the discontinuance
of business, file a final return as required under this paragraph
and pay the tax due.
G.
Every taxpayer who receives any other taxable income not subject
to withholding under Section 512(3) of the LTEA[2] shall make and file with the resident Tax Officer a quarterly
return on or before April 15 of the current year, June 15 of the current
year, September 15 of the current year, and January 15 of the succeeding
year, setting forth the aggregate amount of taxable income not subject
to withholding by the taxpayer during the three-month periods ending
March 31 of the current year, June 30 of the current year, September
30 of the current year, and December 31 of the current year, respectively,
and subject to income tax, together with such other information as
the department may require. Every taxpayer filing a return shall,
at the time of filing the return, pay to the resident Tax Officer
the amount of income tax due. The department shall establish criteria
under which the Tax Officer may waive the quarterly return and payment
of the income tax and permit a taxpayer to file the receipt of taxable
income on the taxpayer's annual return and pay the income tax
due on or before April 15 of the succeeding year.
[2]
Editor's Note: See 53 P.S. § 6924.512.
For taxable years commencing on and after January 1, 2012, or
earlier taxable years if specified by a tax collection district, income
taxes shall be withheld, remitted and reported as follows:
(a)
Every employer within the tax collection district of Montgomery County,
having an office, factory, workshop, branch, warehouse, or other place
of business within the taxing jurisdiction imposing a tax on earned
income or net profits within the taxing district who employs one or
more persons, other than domestic servants, for a salary, wage, commission
or other compensation, who has not previously registered, shall, within
15 days after becoming an employer, register with the Tax Officer
the name and address of the employer and such other information as
the officer may require.
(b)
An employer shall require each new employee to complete a certificate
of residency form, which shall be an addendum to the Federal Employee's
Withholding Allowance Certificate (Form W-4). An employer shall also
require any employee who changes his address or domicile to complete
a certificate of residency form. Upon request, certificate of residency
forms shall be provided by the department. The certificate of residency
form shall provide information to help identify the political subdivision
where an employee lives and works.
(c)
Every employer having an office, factory, workshop, branch, warehouse
or other place of business within a tax collection district that employs
one or more persons, other than domestic servants, for a salary, wage,
commission or other compensation, shall, at the time of payment, deduct
from the compensation due each employee employed at such place of
business the greater of the employee's resident tax or the employee's
nonresident tax as released in the official register under Section
511 of the LTEA.[1]
[1]
Editor's Note: See 53 P.S. § 6924.511.
(d)
Except as set forth in Subsection (e), within 30 days following the end of each calendar quarter, every employer shall file a quarterly return and pay the amount of income taxes deducted during the preceding calendar quarter to the Tax Officer for the place of employment of each employee. The form shall show the name, address and social security number of each employee, the compensation of the employee during the preceding three-month period, the income tax deducted from the employee, the political subdivision imposing the income tax upon the employee, the total compensation of all employees during the preceding calendar quarter, the total income tax deducted from the employees and paid with the return and any other information prescribed by the department.
(e)
Notwithstanding Subsection (d), the provisions of this paragraph shall apply if an employer has more than one place of employment in more than one tax collection district. Within 30 days following the last day of each month, the employer may file the return required by Subsection (d) and pay the total amount of income taxes deducted from employees in all work locations during the preceding month to the Tax Officer for either the tax collection district in which the employer's payroll operations are located or as determined by the department. The return and income taxes deducted shall be filed and paid electronically. The employer must file a notice of intention to file combined returns and make combined payments with the Tax Officer for each place of employment at least one month before filing its first combined return or making its first combined payment. This paragraph shall not be construed to change the location of an employee's place of employment for purposes of nonresident tax liability.
(f)
Any employer who, for two of the preceding four quarterly periods, has failed to deduct the proper income tax, or any part of the income tax, or has failed to pay over the proper amount of income tax as required by Subsection (c) to the tax collection district, may be required by the Tax Officer to file returns and pay the income tax monthly. In such cases, payments of income tax shall be made to the Tax Officer on or before the last day of the month succeeding the month for which the income tax was withheld.
(g)
On or before February 28 of the succeeding year, every employer shall file with the Tax Officer where income taxes have been deducted and remitted pursuant to Subsection (c):
(1)
An annual return showing, for the period beginning January 1
of the current year and ending December 31 of the current year, the
total amount of compensation paid, the total amount of income tax
deducted, the total amount of income tax paid to the Tax Officer and
any other information prescribed by the department.
(2)
An individual withholding statement, which may be integrated
with the Federal Wage and Tax Statement (Form W-2), for each employee
employed during all or any part of the period beginning January 1
of the current year and ending December 31 of the current year, setting
forth the address and social security number, the amount of compensation
paid to the employee during the period, the amount of income tax deducted,
the amount of income tax paid to the Tax Officer, the numerical code
prescribed by the department representing the tax collection district
where the payments required by Subsections (d) and (e) were remitted
and any other information required by the department. Every employer
shall furnish one copy of the individual withholding statement to
the employee for whom it is filed.
(h)
Any employer who discontinues business prior to December 31 of the
current year shall, within 30 days after the discontinuance of business,
file returns and withholding statements required under this section
and pay the income tax due.
(i)
Except as otherwise provided in Section 511 of the LTEA,[2] an employer who willfully or negligently fails or omits
to make the deductions required by this subsection shall be liable
for payment of income taxes which the employer was required to withhold
to the extent that the income taxes have not been recovered from the
employee. 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 income tax or from complying with the requirements for filing
of declaration and returns.
[2]
Editor's Note: See 53 P.S. § 6924.511.
(a)
Tax Collection. In addition to any other power and duty conferred
upon a Tax Officer in this chapter, it shall be the duty of the Tax
Officer:
(1)
To collect, reconcile, administer and enforce income taxes imposed
on residents and nonresidents in the Township.
(2)
To receive and distribute income taxes and to enforce withholding
by employers located in the tax collection district.
(3)
To receive income taxes distributed by Tax Officers for other
tax collection districts.
(5)
To comply with all regulations adopted by the Township under
this chapter and all resolutions, policies and procedures adopted
by the Tax Collection Committee.
(6)
To invest all income taxes in the custody of the Tax Officer
in authorized investments, subject to the approval of the Tax Collection
Committee. The Tax Officer shall observe the standard of care that
would be observed by a prudent person dealing with property of another.
For the purposes of this paragraph, the term "authorized investment"
shall include all of the following:
A.
Short-term obligations of the United States government or its
agencies or instrumentalities which are backed by the full faith and
credit of the United States or are rated in the highest category by
a nationally recognized statistical rating organization.
B.
Deposits in savings accounts, time deposits, share accounts
or certificates of deposit of institutions insured by the Federal
Deposit Insurance Corporation or the National Credit Union Share Insurance
Fund, or their successor agencies, to the extent that the accounts
are insured and, for the amount above the insured maximum, that collateral,
free from other liens, for the amount is pledged by the depository
institution.
C.
Deposits in investment pools established by the State Treasurer
or established by local governments pursuant to 53 Pa.C.S.A. Ch. 23
Subch. A (relating to intergovernmental cooperation) and related statutes,
provided that the investment pools are rated in the highest category
by a nationally recognized statistical rating organization.
D.
Repurchase agreements which are fully collateralized by obligations
of the United States government or its agencies or instrumentalities,
which are free from other liens and backed by the full faith and credit
of the United States or are rated in the highest category by a nationally
recognized statistical rating organization.
(7)
To distribute income generated from investments authorized under
Paragraph (a)(6) as determined by the Tax Collection Committee.
(b)
Monthly Reports. The Tax Officer shall, within 20 days after the
end of each month, provide a written report, on forms prescribed by
the department, to the Secretary of the Tax Collection Committee and
to the Secretary of the Township for which taxes were collected during
the previous month. The report shall include a breakdown of all income
taxes, income generated from investments under Paragraph (a)(6), penalties,
costs and other money received, collected, expended and distributed
for each political subdivision served by the Tax Officer and of all
money distributed to Tax Officers for other tax collection districts.
(c)
Overpayments. A Tax Officer shall refund, under 53 Pa.C.S.A. §§ 8425
(relating to refunds of overpayments) and 8426 (relating to interest
on overpayment), on petition of and proof by the taxpayer, income
taxes paid in excess of income taxes rightfully due.
(d)
Bonds. Prior to initiating any official duties, each Tax Officer
shall give and acknowledge a bond to the appointing Tax Collection
Committee as follows:
(1)
The Tax Collection Committee shall fix the amount of the bond
in an amount equal to the maximum amount of taxes that may be in the
possession of the Tax Officer at any given time or an amount sufficient,
in combination collection district, to secure the financial responsibility
of the Tax Officer in accordance with guidelines adopted by the department.
The amount of the bond shall be revised annually by the Tax Collection
Committee based upon the annual examination required under Section
505(h) of the LTEA.[2]
[2]
Editor's Note: See 53 P.S. § 6924.505(h).
(2)
Each bond shall be joint and several, with one or more corporate
sureties, which shall be surety companies authorized to do business
in this commonwealth and licensed by the Insurance Department.
(3)
Each bond shall be conditioned upon the completion of all of
the following by the Tax Officer's employees and appointees:
A.
The faithful execution of all duties required of the Tax Officer.
B.
The just and faithful accounting or payment over of all moneys
and balances paid to, received or held by the Tax Officer by virtue
of the office in accordance with law.
C.
The delivery of all tax records or other official items held
in right as the Tax Officer to the Tax Officer's successor in
office.
(4)
Each bond shall be taken in the name of the tax collection district
and shall be for the use of the tax collection district appointing
the Tax Officer, and for the use of any other political subdivision
or tax collection district for which income taxes shall be collected
or distributed in case of a breach of any conditions of the bond by
the acts or neglect of the principal on the bond.
(5)
A Tax Collection Committee or any political subdivision may
sue upon the bond for the payment or distribution of income taxes.
(6)
Each bond shall contain the name of the surety company bound
on the bond.
(7)
The Tax Collection Committee may, upon cause shown and due notice
to the Tax Officer and the Tax Officer's sureties, require or
allow the substitution or the addition of a surety company acceptable
to the Tax Collection Committee for the purpose of making the bond
sufficient in amount, without releasing the sureties first approved
from any accrued liability or previous action on the bond.
(8)
The Tax Collection Committee shall designate the custodian of
the bond.
(9)
The Tax Officer shall file copies of all bonds in effect with
the Township.
(10)
A copy of all bonds in effect shall be made available upon request
and at no cost to the department or to a tax collection district or
political subdivision seeking payment or distribution of income taxes
authorized by this chapter.
(e)
Records. It shall be the duty of the Tax Officer to keep a record
showing the amount of income taxes received from each taxpayer or
other Tax Officer, the date of receipt, the amount and date of all
other moneys received or distributed and any other information required
by the department. All tax records shall be the property of the Township
and the tax collection district in which the taxes were collected.
The tax collection district and Tax Officer shall retain all tax records
as directed by the Tax Collection Committee and, when applicable,
in accordance with retention and disposition schedules established
by the Local Government Records Committee of the Pennsylvania Historical
and Museum Commission under 53 Pa.C.S.A. Ch. 13 Subch. F (relating
to records). Tax records under this subsection may be retained electronically
as permitted by law.
(f)
Employer and Taxpayer Audits.
(1)
In order to verify the accuracy of any income tax declaration
or return or, if no declaration or return was filed, to ascertain
the income tax due, the Tax Officer and the Tax Officer's designated
employees may examine or audit the records pertaining to income taxes
due of any of the following:
(2)
The examination or audit conducted by the Tax Officer and the
Tax Officer's designated employees shall conform to the requirements
set forth in 53 Pa.C.S.A. Ch. 84 Subch. C (relating to local taxpayers
bill of rights).
(3)
Every employer and taxpayer or other person whom the Tax Officer
reasonably believes to be an employer or taxpayer shall provide to
the Tax Officer and the Tax Officer's designated employees the
means, facilities and opportunity for the examination and investigation
authorized under Paragraph (f)(1).
(4)
For purposes of this subsection, the term "records" shall include
any books, papers and relevant federal or state tax returns and accompanying
schedules, or supporting documentation for any income taxable under
this chapter.
(g)
Exchange of Information.
(1)
The Tax Officer shall ensure that the tax collection district
enters into an agreement with the Department of Revenue for the exchange
of information as necessary for the collection of income taxes.
(2)
The Department of Revenue may enter into agreements with each
tax collection district and shall establish procedures under which
tax collection, filing and other taxpayer and locality information
in its custody will be made available to Tax Officers for purposes
of collection, reconciliation and enforcement no later than one year
after the deadline for filing returns for the tax year in question.
(h)
Actions for collection of income taxes. The Tax Officer may file
an action in the name of the Township for the recovery of income taxes
due to the Township and unpaid. Nothing in this subsection shall affect
the authority of the Township to file an action in its own name for
collection of income taxes under this chapter. This subsection shall
not be construed to limit a Tax Officer, a tax collection district
or the Township from recovering delinquent income taxes by any other
means provided by this chapter. Actions for collection of income taxes
shall be subject to the following:
(1)
Except as set forth in Paragraph (h)(2) or (4), an action brought
to recover income taxes must be commenced within three years of the
later of the date:
(2)
If there is substantial understatement of income tax liability
of 25% or more and there is no fraud, an action must be commenced
within six years.
(3)
Except as set forth in Paragraph (h)(4)B, C or D, an action
by a Tax Officer for recovery of an erroneous refund must be commenced
as follows:
(4)
There is no limitation of action if any of the following apply:
A.
A taxpayer fails to file a declaration or return required under
this chapter.
B.
An examination of a declaration or return or of other evidence
in the possession of the Tax Officer relating to the declaration or
return reveals a fraudulent evasion of income taxes.
D.
An employer has intentionally failed to make deductions required
by this chapter.
(i)
Interest and Penalties Against the Taxpayer.
(1)
Except as provided in Paragraph (i)(2), if the income tax is
not paid when due, interest at the rate the taxpayer is required to
pay to the commonwealth under Section 806 of the act of April 9, 1929
(P.L. 343, No. 176), known as "the Fiscal Code,"[4] on the amount of the income tax, and an additional penalty
of 1% of the amount of the unpaid income tax for each month or fraction
of a month during which the income tax remains unpaid shall be added
and collected, but the amount shall not exceed 15% in the aggregate.
Where an action is brought for the recovery of the income tax, the
taxpayer liable for the income tax shall, in addition, be liable for
the costs of collection, interest and penalties.
[4]
Editor's Note: See 72 P.S. § 806.
(2)
The department may establish conditions under which a Tax Officer,
with the concurrence of the Tax Collection Committee, may abate interest
or penalties that would otherwise be imposed for the nonreporting
or underreporting of income tax liabilities or for the nonpayment
of income taxes previously imposed and due if the taxpayer voluntarily
files delinquent returns and pays the income taxes in full.
(3)
The provisions of Paragraph (i)(2) shall not affect or terminate
any petitions, investigations, prosecutions or other proceedings pending
under this chapter, or prevent the commencement or further prosecution
of any proceedings by the proper authorities for violations of this
chapter. No proceedings shall, however, be commenced on the basis
of delinquent returns filed pursuant to Subsection (h) if the returns
are determined to be substantially true and correct and the income
taxes are paid in full within the prescribed time.
(j)
Fines and Penalties for Taxpayer Violations.
(1)
Any taxpayer who fails, neglects or refuses to make any declaration
or return required by this chapter, any employer who fails, neglects
or refuses to register, keep or supply records or returns required
by section 512 of the LTEA[5] or to pay the income tax deducted from employees, or fails,
neglects or refuses to deduct or withhold the income tax from employees,
any taxpayer or employer who refuses to permit the Tax Officer appointed
by a Tax Collection Committee or an employee or agent of the Tax Officer
to examine books, records and papers, and any taxpayer or employer
who knowingly makes any incomplete, false or fraudulent return, or
attempts to do anything whatsoever to avoid the full disclosure of
the amount of income in order to avoid the payment of income taxes
shall, upon conviction thereof, be sentenced to pay a fine of not
more than $2,500 for each offense and reasonable costs, and in default
of payment of said fine and costs, to imprisonment for not more than
six months.
[5]
Editor's Note: See 53 P.S. § 6924.512.
(2)
Any employer required under this chapter to collect, account
for and distribute income taxes who willfully fails to collect or
truthfully account for and distribute income taxes commits a misdemeanor
and shall, upon conviction, be sentenced to pay a fine not exceeding
$25,000 or to imprisonment not exceeding two years, or both.
(3)
The penalties imposed under this subsection shall be in addition
to any other costs and penalties imposed by this chapter.
(4)
The failure of any person to obtain forms required for making
the declaration or returns required by this chapter shall not excuse
the person from making the declaration or return.
(k)
Collection. In addition to the powers and duties enumerated in this
section, when designated by the Tax Collection Committee, a Tax Officer
may collect other taxes levied pursuant to this chapter, the act of
June 27, 2006 (1st Sp. Sess., P.L. 1873, No. 1), known as the "Taxpayer
Relief Act," or other statutory law.
(l)
Confidentiality.
(1)
General Rule. Any information gained by a Tax Officer or any
employee or agent of a Tax Officer or of the Tax Collection Committee
as a result of any declarations, returns, investigations, hearings
or verifications shall be confidential tax information.
(2)
Prohibited Conduct. It shall be unlawful, except for official
purposes or as provided by law, for the commonwealth, the Township,
Tax Collection Committee member, Tax Officer or employee or agent
of a Tax Officer or Tax Collection Committee to do any of the following:
(3)
Penalties against Tax Officers. A person who violates Paragraph
(l)(2) commits a misdemeanor of the third degree and shall, upon conviction,
be sentenced to pay a fine of not more than $2,500 or to imprisonment
for not more than one year, or both. If the offender is a member of
the Tax Collection Committee, the member shall be removed from the
Tax Collection Committee. If the offender is an employee of a Tax
Collection Committee or the Township, the employee shall be discharged
from employment. The offender shall pay the costs of prosecution.
The Income Tax Officer shall receive such compensation for his
services and expenses as determined by the Tax Collection Committee.
At the discretion of the Tax Collection Committee, the Tax Officer
may be permitted to withhold the amount of the Tax Officer's
compensation from income taxes collected, if the monthly reports required
by Section 509(b) of the LTEA[1] submitted by the Tax Officer include an accounting for
all compensation withheld.
[1]
Editor's Note: See 53 P.S. § 6924.509(b).
(a)
Fines and Penalties Against the Tax Officers.
(1)
If the Township brings an action under former Division V(h)
of Section 13 of Act 511, the Township may seek equitable relief from
a Tax Officer, including an accounting of all undistributed income
taxes and monetary damages, in the form of recovery of the income
taxes not previously distributed. In addition, the court may impose
a civil penalty not to exceed $2,500 for each quarter for which income
taxes were not distributed in accordance with former Division V(h)
of Section 13 of Act 511, plus reasonable costs and attorney fees.
(2)
If a Tax Officer fails to distribute income taxes to the Township
as required under former Division V(h) of Section 13 of Act 511 for
four consecutive quarters, the court may impose a civil penalty not
to exceed $5,000.
(3)
An action may be brought against the Tax Officer to compel the performance of duties required by Section 890.04 of this chapter or former Section 13 of Act 511 or imposed by regulations adopted pursuant to this chapter, including the duty to deliver all tax records and other official items held in right as Tax Officer to the Tax Officer's successor. Upon a finding of failure to perform a duty, the court may impose a penalty not to exceed $5,000, and the Tax Officer may be held liable for the cost of reproducing tax records if they are lost or cannot be delivered.
(4)
An Article XIII Tax Officer who violates any provision of this
chapter or former Section 13 of Act 511 shall be subject to a civil
penalty of up to $2,500 for each violation.
(5)
An action against an Article XIII Tax Officer for a violation
of this chapter may be brought by the Township for which the Article
XIII Tax Officer collects income taxes, a political subdivision owed
income taxes by the Article XIII Tax Officer or by a surety that is
liable because of the violation.
(6)
The Township shall remove or rescind the appointment of an Article
XIII Tax Officer who has been penalized more than three times under
Paragraph (a)(1), (2), (3) or (4).
(b)
Transition.
(1)
The governing body of the Township which imposed an income tax
prior to January 1, 2011, shall do all of the following:
A.
Determine by November 1, 2010, whether the Article XIII Tax
Officer or the newly appointed Tax Officer shall collect 2011 income
taxes.
(2)
Every employer shall remit 2011 income taxes and file the quarterly
and annual reports required by former Division IV(b) and (c) of Section
13 of Act 511 to either the Article XIII Tax Officer or the newly
appointed Tax Officer, as determined by the Township and released
on the official register in accordance with section 511 of the LTEA.
(3)
(4)
The Article XIII Tax Officer shall deliver all tax records to
the Township and the newly appointed Tax Officer by June 30, 2012,
unless otherwise agreed to by the political subdivision and the newly
appointed Tax Officer.
(5)
Any delinquent income taxes or reports from 2011 or previous
years which have not been remitted or provided to the Article XIII
Tax Officer by June 30, 2012, shall become the responsibility of the
newly appointed Tax Officer. The Township that has made other provisions
for the collection of delinquent income taxes or reports for 2011
or previous years shall notify the newly appointed Tax Officer.
(7)
NEWLY APPOINTED TAX OFFICER
Definitions. The following words and phrases when used in this
subsection shall have the meanings given to them in this subsection
unless the context clearly indicates otherwise:
A Tax Officer appointed under Section 507(a) of the LTEA[5] is responsible for the collection of 2012 income taxes.
[5]
Editor's Note: See 53 P.S. § 6924.507(a).
(a)
The tax imposed by this chapter shall not apply:
(1)
To any person as to whom it is beyond the legal power of the
Township to impose the tax herein provided under the Constitution
of the United States and the Constitution and laws of the Commonwealth
of Pennsylvania.
(2)
To institutions or organizations operated for public, religious,
educational, or charitable purposes, to institutions or organizations
not organized or operated for private profit, or to trusts and foundations
established for any of the said purposes.
