[Adopted 11-13-1950 by Ord. No. 294]
[Added 4-13-1994 by Ord. No. 492]
A.
Pursuant to the authority granted by the Local Tax
Enabling Act (53 P.S. § 6901 et seq.), the Borough Council
of the Borough of Freedom hereby imposes an earned income tax for
general revenue purposes to be levied and assessed as hereinafter
provided.
B.
The Borough also adopts the rules and regulations
incorporated herein as Exhibit A. Copies of these rules and regulations
are filed with the Borough Secretary and reviewable upon request.
[Added 8-11-2004 by Ord. No. 533]
A.
ASSOCIATION
BUSINESS
COMPENSATION EARNED or COMPENSATION PAID or EARNINGS
(1)
(2)
(3)
CORPORATION
EMPLOYER
NET PROFITS
(1)
(2)
(3)
(4)
NONRESIDENT
PERSON
RESIDENT
TAX COLLECTOR
TAXPAYER
The following words and phrases, when used in this
article, shall have the meanings ascribed to them in this section,
except if the context clearly indicates or requires a different meaning:
A partnership, limited partnership or any other form of unincorporated
enterprise owned by two or more persons.
Includes any enterprise, activity, profession or undertaking
of any nature conducted for profit, whether by an individual, copartnership,
association or other entity.
[Amended 8-11-2004 by Ord. No. 533]
All 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, as determined under Section 303 of the Tax Reform Code of 1971 and regulations in 61 Pa. Code Pt. I Subpt. B Art. V relating to personal income tax.
This term does not include 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 workmen's 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 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.
Employee business expenses are allowable deductions as determined under Article III of the Tax Reform Code of 1971. The amount of any housing allowance provided to a member of the clergy shall not be taxable as earned income.
Any corporation or joint-stock association organized under
the laws of the United States, the Commonwealth of Pennsylvania or
any other state, territory or foreign country or dependency.
Any individual, copartnership, association, corporation,
governmental body or unit or agency or any other entity who or that
employs one or more persons on a salary, wage, commission or other
compensation basis.
The net income from the operation of a business, profession, or other activity, except corporations, determined under Section 303 of the Act of March 4, 1971 (P.L. 6, No. 2), known as the "Tax Reform Code of 1971," and regulations in 61 Pa. Code Pt. I Subpt. B Art. V (relating to personal income tax). The term does not include income which is not paid for services provided and which is in the nature of earnings from an investment. For taxpayers engaged in the business, profession or activity of farming, the term shall not include:
[Amended 8-11-2004 by Ord. No. 533]
Any interest earnings generated from any monetary
accounts or investment instruments of the farming business;
Any gain on the sale of farm machinery;
Any gain on the sale of livestock held 12 months
or more for draft, breeding or dairy purposes; and
Any gain on the sale of other capital assets
of the farm.
An individual, copartnership, association or other entity
domiciled outside the Borough of Freedom.
Includes every natural person, copartnership, association,
firm or fiduciary. Whenever used in any clause prescribing and imposing
a penalty, the term "person," as applied to associations, shall mean
the partners or members thereof, and as applied to corporations, the
officers thereof.
An individual, copartnership, association or other entity
domiciled in the Borough of Freedom.
The duly elected and qualified Tax Collector of the Borough
of Freedom or other designated collection agency permissible under
law.
[Amended 8-11-2004 by Ord. No. 533]
A person, whether an individual, copartnership, association
or any other entity, required hereunder to file a return on earnings
or net profits or to pay a tax thereon.
B.
The singular shall include the plural, and the masculine
shall include the feminine and the neuter.
[Amended 12-14-1953 by Ord. No. 301; 11-15-1954 by Ord. No.
304; 11-14-1955 by Ord. No. 307; 4-29-1957 by Ord. No. 315; 11-24-1965 by Ord. No. 360; 12-12-1966 by Ord. No. 369; 4-13-1994 by Ord. No.
492]
A.
An annual tax for general revenue purposes is hereby
imposed on:
(1)
Salaries, wages, commissions and other compensation
earned after June 1, 1957, or current year, by residents of the Borough
of Freedom; and on
(2)
Salaries, wages, commissions and other compensation
earned after June 1, 1957, by nonresidents of the Borough of Freedom
for work done or services performed or rendered in the Borough of
Freedom; and on
(3)
The net profits earned after June 1, 1957, or current
year, of businesses, professions or other activities conducted by
such residents; and on
(4)
The net profits earned after June 1, 1957, or current
year, of businesses, professions or other activities conducted in
the Borough of Freedom by nonresidents.
B.
The tax levied under Subsection A(1) and (2) herein shall relate to and be imposed upon salaries, wages, commissions and other compensations paid by an employer or on his behalf to any person who is employed by him or renders services to him. The tax levied under Subsection A(3) and (4) herein shall relate to and be imposed on the net profits of any businesses, professions or enterprises carried on by any person as owner or proprietor either individually or in association with some other person.
C.
The tax imposed will continue without annual reenactment.
D.
The duly elected Tax Collector for the Borough of
Freedom, designated in Ordinance No. 294 of the Borough of Freedom,
as amended, to be the Collector of the tax imposed by said Ordinance
No. 294, as amended, is hereby authorized and directed to collect
the tax hereby reenacted at the reduced rate of 1/2 of 1%, or five
mills, from all residents of the Borough of Freedom, for such period
of time as the Earned Income Tax Resolution, adopted by the Freedom
Area School District and imposing a tax of 1/2 of 1%, or five mills,
on residents of the Freedom Area School District residing in the Borough
of Freedom, remains in full force and effect.
[Amended 11-12-1997 by Ord. No. 503]
A.
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 the 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 this
Officer the amount of tax shown as due thereon.
B.
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 the 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.
C.
Any taxpayer whose sole income subject to the tax
imposed under this article consists of salaries, wages or commissions
from which taxes have been deducted at the source by employers shall
not be required to file a return of estimated income as required by
this section, but such person shall file a return on or before April
15 of the succeeding year setting forth the total amount of income
subject to the tax earned during the preceding year and giving the
name or names of the employer or employers and the amount of tax deducted
by such employer or employers.
[Amended 4-29-1957 by Ord. No. 315]
A.
Each employer within the Borough of Freedom who employs
one or more persons on a salary, wage, commission or other compensation
basis shall deduct monthly or more often than monthly, at the time
of the payment thereof, the tax of 1% of salaries, wages, commissions
or other compensation due by said employers to said employee and shall
file with the Tax Collector on a form or forms furnished by or obtainable
from the Tax Collector on a quarterly return on dates specified herein
and pay the amount of taxes deducted during said quarters. The quarterly
returns shall be made on or before all taxes deducted during the quarter
beginning January 1 and ending March 31, on or before July 31 for
the quarter beginning April 1 and ending on June 30, on or before
October 31 for the quarter beginning July 1 and ending September 30
and on or before January 31 for the quarter beginning October 1 and
ending December 31 of the preceding year.
B.
On or before January 31, each employer shall file
a return setting forth the name and residences of each employee of
said employer during all or any part of the preceding year, the amount
of salaries, wages, commissions or other compensation earned during
such preceding year by each of such employees and the amount of taxes
deducted, together with other pertinent information as the Tax Collector
may require; provided, however, that the failure or omission by any
employer, either residing within or outside of the Borough, to make
such return and/or pay such tax shall not relieve the employee from
the payment of such tax and the compliance with such regulations,
with respect to returns and payments thereof, as may be fixed in this
article or established by the Tax Collector.
It shall be the duty of the Tax Collector to
collect and receive the taxes and penalties imposed by this article
for payment over to the Borough Treasurer and to enforce the provisions
of this article. It shall also be his duty to keep a record showing
the amount received by him for each taxpayer and the date of such
receipts.
A.
The Borough Council may prescribe, adopt, promulgate
and enforce rules and regulations relating to any matter or thing
pertaining to the administration and enforcement of the provisions
of this article, including provision for the reexamination and correction
of returns and payments alleged or found to be incorrect or so to
which an overpayment or underpayment is claimed or found to have occurred.
B.
The Tax Collector or any agent or employee designated,
in writing, by Borough Council is hereby authorized to examine the
books, papers and records of any employer or supposed employer or
of any taxpayer or supposed taxpayer in order to verify accuracy of
any return made, or if no return was made, to ascertain the tax imposed
by this article. Every such employer or supposed employer or taxpayer
or supposed taxpayer is hereby directed and required to give to said
Tax Collector or any other person designated by Borough Council the
means, facilities and opportunity for such examinations and investigations
as are hereby authorized. The Tax Collector is hereby authorized to
examine any person concerning any income which was or should have
been returned for taxation and to this end may compel the production
of books, papers and records and the attendance of all persons before
him, whether as parties or witnesses, whom he believes to have knowledge
of such income.
C.
Any information gained by the Tax Collector or any
other person designated by Borough Council as a result of any returns,
investigations, hearings or verifications required or authorized by
this article shall be confidential, except for official purposes and
except in accordance with proper judicial order or as otherwise provided
by law, and any person or agent divulging such information shall be
subject to a fine or penalty of $100 and costs for each offense or
to undergo imprisonment for not more than 30 days for the nonpayment
of such fines or penalty within 10 days from the imposition thereof.
All taxes imposed by this article remaining
unpaid after they become due shall bear interest in addition to the
amount of the unpaid tax at the rate of 6% per year, and the persons
upon whom said taxes are imposed shall be further liable to a penalty
of one-half of one per centum (1/2 of 1%) of the amount of the unpaid
tax for each month or fraction of a month for the first six months
of nonpayment.
[Amended 8-11-2004 by Ord. No. 533]
A.
All taxes imposed by this article, together with all
interest, penalties and costs, shall be recoverable by the Borough
as other debts of like amount are recoverable.
B.
When suit is brought against any delinquent party,
to each delinquent earned income tax assessment, levy or obligation
owed to the Borough there shall be added such attorney's fees, charges
and expenses incurred in the delinquent collection process. Such additional
charges shall be collected in addition to all interest, penalties
and costs as are allowed by law.
C.
Such fees shall be reasonable and the same are hereby
established in a fee rate schedule as attached herein and made a part
hereof as Schedule A.[1] Said schedule of fees is hereby deemed to be reasonable,
fair and necessary in order to allow the Borough to collect such sum
due. This schedule may be adjusted from time to time by resolution
of the Borough of Freedom.
[1]
Editor's Note: Said fees schedule is filed
with the Borough Secretary and reviewable upon request.
D.
Any person or entity empowered to collect sums on
behalf of the Borough is directed to add such fees as are incurred
to the extent allowed as set forth in Schedule A. Such sums collected
pursuant to this article shall be in addition to any tax penalty,
interest or other costs already part of the delinquent account or
assessment. The sums collected pursuant to this article shall be remitted
to the taxing authority in the same manner as the underlying tax obligation.
E.
Any ordinance in conflict with this article shall
be deemed to have been repealed to the extent of that conflict. If
any portion of this article is deemed to be illegal or unconstitutional,
then it is the intent of the Borough that it would have enacted the
balance of this article irrespective of said invalid portion.
A.
Any person convicted before a District Justice of
violating any of the provisions or requirements of this article or
who shall fail, neglect or refuse to make any return required by this
article or any tax payer who shall fail, neglect or refuse to pay
the tax penalties or interest imposed by this article or any persons
who shall refuse to permit the Tax Collector or any person designated
by Borough Council, in writing, to examine his books, records or papers
or who shall knowingly make any incomplete, false or fraudulent returns
or who shall attempt to do anything whatever to avoid the full disclosure
of the amount of earnings or profits to avoid the payment of the whole
or any part of the tax shall be subject to a fine or penalty of not
more than $500 and costs for each such offense or to undergo imprisonment
for not more than 30 days for the nonpayment of such fine or penalty
and costs within 10 days from the imposition thereof.
[Amended 4-13-1994 by Ord. No. 492]
B.
Such fine or penalty shall be in addition to any other
penalty imposed by any other section of this article.
C.
The failure of any employer or taxpayer to receive
or procure a return form shall not excuse him from making a return.
This Article shall not apply to any person or
property as to whom or which it is beyond the legal power of Council
to impose the tax or duties herein provided for.
