Township of Lower Gwynedd, PA
Montgomery County
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Table of Contents
Table of Contents
[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.]
GENERAL REFERENCES
Tax Collector — See Ch. 240.
Business privilege tax — See Ch. 886.
[1]
Editor's Note: This ordinance also repealed former Ch. 890, Earned Income Tax, passed 11-27-1995 by Ord. No. 319, as amended.

§ 890.01 Short Title.

This chapter shall be known and may be cited as the "Lower Gwynedd Township Earned Income Tax Ordinance."

§ 890.02 Definitions.

ARTICLE XIII TAX OFFICER
The Tax Officer authorized by Lower Gwynedd Township to collect income taxes levied prior to January 1, 2012.
BUSINESS
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.
BUSINESS 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.
CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT
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]
CLAIM
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.
CORPORATION
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.
CURRENT YEAR
The calendar year for which the tax is levied.
DEPARTMENT
The Department of Community and Economic Development of the commonwealth.
DOMICILE
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.
EARNED INCOME
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.
EARNED INCOME AND NET PROFITS TAX
The tax levied by Lower Gwynedd Township on earned income and net profits.
EFFECTIVE INCOME TAX RATE
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]
EFFECTIVE LOCAL SERVICES TAX RATE
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]
EMPLOYER
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.
INCOME TAX
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.
JOINT TAX COLLECTION COMMITTEE
An entity formed by two or more Tax Collection Committees for the purpose of income tax collection in more than one tax collection district.
LTEA
The Pennsylvania Local Tax Enabling Act, P.L. 1257, 1965, as amended.[6]
NET PROFITS
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) 
Income which:
(1) 
Is not paid for services provided; and
(2) 
Is in the nature of earnings from an investment.
(b) 
Income which represents:
(1) 
Any gain on the sale of farm machinery;
(2) 
Any gain on the sale of livestock held 12 months or more for draft, breeding or dairy purposes; or
(3) 
Any gain on the sale of other capital assets of a farm.
NONRESIDENT
A person or business domiciled outside Lower Gwynedd Township.
NONRESIDENT TAX
An income tax levied by Lower Gwynedd Township on nonresidents.
OFFICIAL REGISTER
The part of the tax register that includes withholding tax rates as provided in Section 511(a)(3) of the LTEA.[8]
PERSON
A natural person.
PRECEDING YEAR
The calendar year before the current year.
PRIVATE AGENCY
A business entity or person appointed as a Tax Officer by a Tax Collection Committee.
PUBLIC AGENCY
Any and all public bodies, authorities, agencies, instrumentalities, political subdivisions, intermediate units, councils, boards, commissions or similar governmental entities.
RESIDENT
A person or business domiciled in Lower Gwynedd Township.
RESIDENT TAX
An income tax levied by Lower Gwynedd Township on residents.
RESIDENT TAX OFFICER
The Tax Officer administering and collecting income taxes for the tax collection district in which a taxpayer is domiciled.
SUCCEEDING YEAR
The calendar year following the current year.
TAXABLE INCOME
Includes:
(a) 
In the case of an earned income and net profits tax, earned income and net profits.
(b) 
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.
TAX BUREAU
A public nonprofit entity established for the administration and collection of taxes.
TAX COLLECTION COMMITTEE
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.
TAX COLLECTION DISTRICT
A tax collection district established under Section 504 of the LTEA,[10] encompassing political subdivisions in Montgomery County, including Lower Gwynedd Township.
TAX OFFICER
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.
TAXPAYER
A person or business required under this chapter to file a return of an income tax or to pay an income tax.
TAX RECORDS
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.
TAX REGISTER
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]
TOWNSHIP
Lower Gwynedd Township, Montgomery County, Pennsylvania.
WITHHOLDING TAX
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).

§ 890.03 Imposition of Tax.

(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.

§ 890.04 Declaration and Payment of Tax.

(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.

§ 890.05 Collection at Source.

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.

§ 890.06 Powers and Duties of Tax Officer.

(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.
(4) 
To distribute income taxes to the Township as required by Section 513 of the LTEA.[1]
[1]
Editor's Note: See 53 P.S. § 6924.513.
(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:
A. 
An employer.
B. 
A taxpayer.
C. 
A person whom the Tax Officer reasonably believes to be an employer or taxpayer.
(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:
A. 
The income taxes are due;
B. 
The declaration or return has been filed; or
C. 
Of a redetermination of compensation or net profits by the Department of Revenue.
(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:
A. 
Except as set forth in Paragraph (h)(3)B, within two years after making the refund.
B. 
If it appears that any part of the refund was induced by fraud or misrepresentation of material fact, within five years after making the refund.
(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.
C. 
An employer has deducted income taxes under Section 512 of the LTEA[3] and has failed to pay the amount deducted to the Tax Officer.
[3]
Editor's Note: See 53 P.S. § 6924.512.
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:
A. 
Divulge or make known confidential tax information.
B. 
Permit confidential tax information or a book containing an abstract or particulars of the abstract to be seen or examined by any person.
C. 
Print, publish or otherwise make known any confidential tax information.
(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.

§ 890.07 Compensation of Income Tax Officer.

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).

§ 890.08 Transition.

(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.
B. 
Notify the department by December 1, 2010, of the determination under Clause (A) in accordance with Section 511(a)(5) of the LTEA.[1]
[1]
Editor's Note: See 53 P.S. § 6924.511(a)(5).
(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) 
By July 1, 2011, each Tax Collection Committee shall develop a plan to transition from the provisions of former Section 13 to the provisions of Sections 512[2] and 513 of the LTEA,[3] and from the Article XIII Tax Officer to the newly appointed Tax Officer for 2012 income taxes.
[2]
Editor's Note: See 53 P.S. § 6924.512.
[3]
Editor's Note: See 53 P.S. § 6924.513.
(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.
(6) 
Beginning with the first quarter of 2012, employers shall remit income taxes withheld and make reports as required by Section 512 of the LTEA[4] to the newly appointed Tax Officer.
[4]
Editor's Note: See 53 P.S. § 6924.512.
(7) 
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:
NEWLY APPOINTED TAX OFFICER
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).

§ 890.09 Applicability.

(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.
(b) 
This section shall not be construed to exempt any person who is an employer from the duty of collecting the tax source from his employees and paying the amount collected to the Income Tax Officer under the provisions of Section 890.04 of this chapter.