[Adopted 9-26-1979 as Ch. 30, Art. III, of the 1979 Code]
The following words and phrases, when used in
this article, shall have the meanings respectively ascribed to them:
A partnership, limited partnership or any other unincorporated
group of two or more persons.
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 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 calendar year for which the tax is levied.
The place where one lives and has his permanent home and
to which he has the intention of returning whenever he is 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 place in which a man has
voluntarily fixed the habitation of himself and his family, not for
a mere special or limited purpose, but with the present intention
of making a permanent home, until some event occurs to induce him
to adopt some other permanent home. In the case of businesses or associations,
the domicile is that place considered as the center of business affairs
and the place where its functions are discharged.
Salaries, wages, commissions, bonuses, incentive payments,
fees, tips and, other compensation received by a person or his personal
representative for services rendered, whether directly or through
an agent, and whether in cash or in property, not including, however,
wages or compensation paid to persons on active military service,
periodic payments for sickness and disability other than regular wages
received during a period of sickness, disability or retirement or
payments arising under workers' compensation acts, occupational disease
acts and similar legislation or payments commonly recognized as "old
age benefits," retirement pay or pensions paid to persons retired
from service after reaching a specific age or after a stated period
of employment or payments commonly known as "public assistance," or
unemployment compensation payments made by any governmental agency
or payments to reimburse expenses or payments made by employers or
labor unions for wage and salary supplemental programs, including
but not limited to programs covering hospitalization, sickness, disability
or death, supplemental unemployment benefits, strike benefits, social
security and retirement.
A person, partnership, association, corporation, institution,
governmental body or unit or agency or any other entity employing
one or more persons for a salary, wage, commission or other compensation.
The person, public employee or private agency designated
by the Council to collect and administer the tax on earned income
and net profits, more particularly, the tax collector for the City.
The net income from the operation of a business, profession
or other activity, except corporations, after provision for all costs
and expenses incurred in the conduct thereof, determined either on
a cash or accrual basis in accordance with the accounting system used
in such business, profession or other activity, but without deduction
of taxes based on income.
A person, partnership, association or other entity domiciled
outside the taxing district.
A natural person.
The calendar year before the current year.
A person, partnership, association or other entity domiciled
in the taxing district.
The calendar year following the current year.
A person, partnership, association or any other entity required
hereunder to file a return of earned income or net profits, or to
pay a tax thereon.
[Amended by Ord. Nos. 9-1990; 2-1991; 2-1992;
14-1993; 8-1994; 41-1994; 1-24-1996 by Ord. No. 23-1996; 1-15-1997 by Ord. No.
4-1997; 1-14-1998 by Ord. No. 2-1998; 2-1-1999 by Ord. No.
3-1999; 2-7-2000 by Ord. No. 5-2000; 1-29-2001 by Ord. No.
5-2001; 2-4-2002 by Ord. No. 5-2002; 1-27-2003 by Ord. No.
108-2003; 1-29-2004 by Ord. No. 5-2004; 1-20-2005 by Ord. No.
96-2005; 1-26-2006 by Ord. No. 6-2006; 1-18-2007 by Ord. No.
75-2007; 1-29-2008 by Ord. No. 8-2008; 1-20-2009 by Ord. No.
55-2009; 1-26-2010 by Ord. No. 4-2010; 1-18-2011 by Ord. No.
2-2011; 1-12-2012 by Ord. No. 3-2012; 10-11-2012 by Ord. No.
62-2012; 9-4-2014 by Ord. No. 41-2014; 1-29-2015 by Ord. No. 77-2015; 12-10-2015 by Ord. No. 131-2015; 1-5-2017 by Ord. No.
77-2017; 12-7-2017 by Ord. No. 131-2017; 12-3-2018 by Ord. No. 42-2018; 12-15-2020 by Ord. No. 41-2020; 12-7-2021 by Ord. No. 97-2021;[1] 12-13-2022 by Ord. No. 42-2022;[2] 12-12-2023 by Ord. No. 103-2023[3]]
An annual tax for general revenue purposes of 2.4% is hereby
imposed on the earned income received and net profits earned, in the
period beginning January 1 and ending December 31 annually by all
persons, individuals, associations, and businesses who are residents
of the City of Scranton, and 1% on nonresidents of the City of Scranton,
for work done, services performed or businesses conducted within the
City of Scranton.[4]
A.
Net profit.
(1)
Every taxpayer making net profits shall, on or before
April 15 of the current year, make and file with the officer, on a
form prescribed or approved by the officer, a declaration of his estimated
net profits during the period beginning January 1 and ending December
31 of the current year and pay to the officer in four equal quarterly
installments the tax due thereon as follows: the first installment
at the time of filing the declaration and the other installments on
or before June 15 of the current year, September 15 of the current
year and January 15 of the succeeding year, respectively.
(2)
Any taxpayer who first anticipates any net profit
after April 15 of the current year shall make and file the declaration
hereinabove required on or before June 15 of the current year, September
15 of the current year or December 31 of the current year, whichever
of these dates next follows the date on which the taxpayer first anticipates
such net profit, and pay to the officer in equal installments the
tax due thereon on or before the quarterly payment dates which remain
after the filing of the declaration.
(3)
Every taxpayer shall, on or before April 15 of the
succeeding year, make and file with the officer, on a form prescribed
or approved by the officer, a final return showing the amount of net
profits earned during the period beginning January 1 of the current
year and ending December 31 of the current year, the total amount
of tax due thereon and the total amount of tax paid thereon. At the
time of filing the final return, the taxpayer shall pay to the 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 his estimated tax, elect to make and file
with the officer, on or before January 31 of the succeeding year,
the final return as hereinabove required.
(4)
Where a taxpayer who has filed the declaration hereinabove
required anticipates additional net profits not previously declared
or finds that he has overestimated his anticipated net profits, he
shall file an adjusted declaration of estimated net profits before
the next following quarterly payment date and shall pay the balance
of tax due in equal installments on the remaining quarterly payment
dates.
(5)
Every taxpayer who discontinues business prior to
December 31 of the current year shall, within 30 days after the discontinuance
of business, file his final return as hereinabove required and pay
the tax due.
B.
Earned income.
(1)
Annual earned income tax return. Every taxpayer shall,
on or before April 15 of the succeeding year, make and file with the
officer, on a form prescribed or approved by the officer, a final
return showing the amount of earned 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 thereon, the amount
of tax paid thereon, the amount of tax thereon that has been withheld
pursuant to the provisions relating to the collection at source and
the balance of tax due. At the time of filing the final return, the
taxpayer shall pay the balance of the tax due or shall make demand
for refund or credit in the case of overpayment.
(2)
Earned income not subject to withholding. Every taxpayer
who is employed for a salary, wage, commission, or other compensation
and who received any earned income not subject to the provisions relating
to collection at source shall make and file with the officer, on a
form prescribed or approved by the officer, a quarterly return on
or before April 30 of the current year, July 31 of the current year,
October 31 of the current year and January 31 of the succeeding year,
setting forth the aggregate amount of earned income not subject to
withholding by him 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 the tax, together with such other information as the
officer may require. Every taxpayer making such return shall, at the
time of filing thereof, pay to the officer the amount of tax shown
as due thereon.
[1]
Editor's Note: Ordinance No. 63-2021, adopted 4-13-2021, extended
the due date for taxes due and owing for general revenue purposes
on earned income for calendar year 2021 from 4-15-2021 to 5-17-2021,
in conformity with those same extensions enacted by the United States
Department of Treasury and the Commonwealth of Pennsylvania.
A.
Every employer having an office, factory, workshop,
branch, warehouse or other place of business within the City 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
officer his name and address and such other information as the officer
may require.
B.
Payments.
(1)
Every employer having an office, factory, workshop
branch, warehouse or other place of business within the City who employs
one or more persons, other than domestic servants, for a salary, wage,
commission or other compensation shall deduct at the time of payment
thereof, the tax imposed by this article on the earned income due
to his employee or employees and pay to the officer the amount of
City taxes deducted in accordance with the following schedule of payment
and deposit dates. This schedule of payment and deposit dates is intended
to be in accordance with the federal system as to the time to make
deposits as more specifically referred to in Section 31.630 (c)-1
of the United States Treasury Regulations as promulgated under 26
U.S.C. § 6302 (Section 6302 of the 1954 Internal Revenue
Code).
|
Amount of City and School Deducted and
Undeposited Taxes
|
Payment of City Taxes Withheld Due By
| |
|---|---|---|
|
If $2,000 or more in taxes deducted and unde-
posited by an end of any quarter-monthly period (a period ending on
the 7th, 15th, 22nd or last day of any month)
|
3rd banking day after the end of quarter-monthly
period which deducted and undeposited taxes reach $2,000
| |
|
If $200 or more, but less than $2,000 in taxes
are deducted and undeposited by last day of first or second month
of calendar quarter
|
15th day of following month
| |
|
If $200 or more, but less $2,000 in taxes are
deducted and undeposited by last day of third quarter.
|
Last day of following than month
| |
|
If less than $200 in taxes are deducted and
unde- posited by last day of third month of calendar quarter
|
Pay by last day of following month or pay with
return
|
(2)
Such employers shall file a return on or before April
30 of the current year, July 31 of the current year, October 31 of
the current year and January 31 of the succeeding year. Such return,
unless otherwise agreed upon between the officer and employer, shall
show the name, residence and social security number of each employee,
the earned income of such employee during such payment period, the
tax deducted therefrom and paid, the political subdivisions imposing
the tax upon such employee, the total earned income of all such employees
during such payment period and the total tax deducted therefrom and
paid with the return.
C.
On or before February 28 of the succeeding year, every
employer shall file with the officer:
(1)
An annual return showing the total amount of earned
income paid, the total amount of tax deducted and the total amount
of tax paid to the officer for the period beginning January 1 of the
current year and ending December 31 of the current year.
(2)
A return withholding statement 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
employee's name, address and social security number, the amount of
earned income paid to the employee during said period, the amount
of tax deducted, the political subdivisions imposing the tax upon
such employee and the amount of tax paid to the officer. Every employer
shall furnish two copies of the individual return to the employee
for whom it is filed.
D.
Every employer who discontinues business prior to
December 31 of the current year, shall within 30 days after the discontinuance
of business, file the returns and withholding statements hereinabove
required and pay the tax due.
E.
Every employer who willfully or negligently fails
or omits to make the deductions required by this section shall be
liable for payment of the taxes which he was required to withhold
to the extent that such taxes have not been recovered from the employee.
F.
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 tax or from complying with the requirements
of this article relating to the filing of declarations and returns.
A.
It shall be the duty of the officer to collect and
receive the taxes, fines and penalties imposed by this article. It
shall also be his duty to keep a record showing the amount received
by him from each person or business paying the tax and the date of
such receipt.
B.
The officer, before entering upon his official duties,
shall give and acknowledge a bond to the City and the other political
subdivisions appointing him.
(1)
Each such 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 duly licensed by the Insurance
Commissioner of this commonwealth.
(2)
Each bond shall be conditioned upon the faithful discharge
by the officer, his clerks, assistants and appointees of all trusts
confided in him by virtue of his office, upon the faithful execution
of all duties required of him by virtue of his office, upon the just
and faithful accounting or payment over, according to law, of all
moneys and all balances thereof paid to, received or held by virtue
of his office and upon the delivery to his successor or successors
in office of all books, papers, documents or other official things
held in right of his office.
(3)
Each such bond shall be taken in the name of the City
and the other political subdivisions appointing him and shall be for
the use of the City and the other political subdivisions appointing
him and for the use of such other person or persons for whom money
shall be collected or received, or as his or her interest shall otherwise
appear, in case of a breach of any of the conditions thereof by the
acts or neglect of the principal on the bond.
(4)
The City or the other political subdivisions appointing
him, or any person may sue upon said bond in its or his own name for
its or his own use.
(5)
Each such bond shall contain the name or names of
the surety company or companies bound thereon. The council and the
other political subdivisions appointing the officer shall fix the
amount of the bond at an amount equal to the maximum amount of taxes
which may be in the possession of the officer at any given time.
(6)
The Council and the other political subdivisions appointing
the officer may, at any time upon cause shown and due notice to the
officer and his surety or sureties, require or allow the substitution
or the addition of a surety company acceptable to the Council and
the other political subdivisions appointing the officer for the purpose
of making the bond sufficient in amount, without releasing the surety
or sureties first approved from any accrued liability or previous
action on such bond.
(7)
The Council and the other political subdivisions appointing
the officer shall designate the custodian of the bond required to
be given by the officer.
C.
The officer charged with the administration and enforcement
of the provisions of this article 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 reexamination and correction of declarations
and returns and of payments alleged or found to be incorrect or as
to which an overpayment is claimed or found to have occurred, and
to make refunds in cases of overpayment, for any period of time not
to exceed six years subsequent to the date of payment of the sum involved
and to prescribe forms necessary for the administration of this article.
No rule or regulation of any kind shall be enforceable unless it has
been approved by resolution of the Council and the other political
subdivisions appointing the officer. A copy of such rules and regulations
currently in force shall be available for public inspection.
D.
The officer shall refund, on petition of and proof
by the taxpayer, earned income tax paid on the taxpayer's ordinary
and necessary business expenses, to the extent that such expenses
are not paid by the taxpayer's employer.
E.
The officer and agents designated by him are hereby
authorized to examine the books, papers and records of any employer
or of any taxpayer or of any person whom the officer reasonably believes
to be an employer or taxpayer, in order to verify the accuracy of
any declaration or return, or if no declaration or return was filed,
to ascertain the tax due. Every employer and every taxpayer and every
person whom the officer reasonably believes to be an employer or taxpayer,
is hereby directed and required to give to the officer, or to any
agent designated by him, the means, facilities and opportunity for
such examination and investigations, as are hereby authorized.
F.
Any information gained by the officer, his agents
or by any other official or agent of the taxing district, as a result
of any declarations, returns, investigations, hearings or verifications
required or authorized by this article, shall be confidential, except
for official purposes and except in accordance with a proper judicial
order or as otherwise provided by law.
G.
The officer is authorized to establish different filing,
reporting and payment dates for taxpayers whose fiscal years do not
coincide with the calendar year.
The income tax officer shall receive such compensation
for his services and expenses as the Council and the governing bodies
of the other political subdivisions appointing him shall determine
by resolution. The City shall share in the compensation and expenses
of the officer, his assistants and employees, according to the proportionate
share that the total annual collections for the City bears to the
total annual collection of taxes, except that the Council of the City
and the other political subdivisions appointing the officer may by
resolution substitute a different manner of sharing the compensation
and expenses.
A.
The officer may sue in the name of the City and join
therein other political subdivisions appointing him for the recovery
of taxes due and unpaid under this article and like legislation of
the other subdivisions.
B.
Any suit brought to recover the tax imposed by this
article shall be begun within three years after such tax is due, or
within three years after the declaration or return has been filed,
whichever date is later; provided, however, that this limitation shall
not prevent the institution of a suit for the collection of any tax
due or determined to be due in the following cases:
(1)
Where no declaration or return was filed by any person
although a declaration or return was required to be filed by him under
provisions of this article, there shall be no limitation.
(2)
Where an examination of the declaration or return
filed by any person or of other evidence relating to such declaration
or return in the possession of the officer reveals a fraudulent evasion
of taxes, there shall be no limitation.
(3)
In the case of substantial understatement of tax liability
of 25% or more, and no fraud, suit shall be begun within six years.
(4)
Where any person has deducted taxes under the provisions
of this article and has failed to pay the amounts so deducted to the
officer or where any person has willfully failed or omitted to make
the deductions required by this section, there shall be no limitation.
(5)
This section shall not be construed to limit the City
from recovering delinquent taxes by any other means.
C.
The officer may sue for recovery of an erroneous refund,
provided that such suit is begun two years after making such refund,
except that the suit may be brought within five years if it appears
that any part of the refund was induced by fraud or misrepresentation
of material fact.
If for any reason the tax imposed under this
article is not paid when due, interest at the rate of 6% per annum
on the amount of the tax, and an additional penalty of 1/2 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. Where
suit is brought for the recovery of any such tax, the person liable
therefor shall, in addition, be liable for the costs of collection
and the interest and penalties herein imposed.
A.
Any taxpayer who fails, neglects or refuses to make
any declaration or return required by this article; any employer who
fails, neglects or refuses to register or to pay the tax deducted
from his employees or fails, neglects or refuses to deduct or withhold
the tax from his employees; any taxpayer or employer who refuses to
permit the officer, or any agent designated by him, to examine his
books, records and papers; and any taxpayer who knowingly makes any
incomplete, false or fraudulent return or attempts to do anything
whatsoever to avoid the full disclosure of the amount of his net profits
or earned income in order to avoid the payment of the whole or any
part of the tax imposed by this article, shall, upon conviction thereof
before any District Justice or court of competent jurisdiction, be
sentenced to pay a fine of not more than $500 for each offense, and
costs, and in default of payment of the fine and costs to be imprisoned
for a period not exceeding 30 days.
B.
Any person who divulges any information which is confidential
under the provisions of this article, shall, upon conviction thereof
before any District Justice, or court of competent jurisdiction, be
sentenced to pay a fine of not more than $500 for each offense, and
costs, and, in default of payment of the fines and costs to be imprisoned
for a period not exceeding 30 days.
C.
The penalties imposed under this section shall be
in addition to any other penalty imposed by any other section of this
article.
D.
The failure of any person to receive or procure forms
required for making the declaration or returns required by this article
shall not excuse him from making such declaration or return.
