City of Harrisburg, PA
Dauphin County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the City Council of the City of Harrisburg by Ord. No. 108-1966. Amendments noted where applicable.]
CROSS-REFERENCES
Power to tax: see Local Tax Enabling Act, Act of December 31, 1965, P.L. 1257, as amended (53 P.S. § 6924.101 et seq.).

§ 5-707.1 Definitions.

[Ord. No. 127-1967[1]]
As used in this chapter, unless otherwise expressly stated or clearly indicated by the context, the following terms shall have the meanings indicated:
ASSOCIATION
A partnership, limited partnership or any other unincorporated group of two or more persons.
BUSINESS
See Chapter 5-715, Business Privilege and Mercantile Tax.
CORPORATION
See Glossary, Chapter 1-302.
CURRENT YEAR
The present calendar year for which a tax is levied.
DOMICILE
See Glossary, Chapter 1-302.
EARNED INCOME
Salaries, wages, commissions, bonuses, incentive payments, fees, tips, and other compensation received by a person or his or her personal representative for services rendered, whether directly or through an agent, and whether in cash or in property. This term does not include:
A. 
Wages or compensation paid to persons on active military service;
B. 
Periodic payments for sickness and disability other than regular wages received during a period of sickness, disability or retirement;
C. 
Payments arising under workers' compensation acts, occupational disease acts and similar legislation;
D. 
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;
E. 
Payments commonly known as "public assistance";
F. 
Unemployment compensation payments made by any governmental agency;
G. 
Payments to reimburse expenses;
H. 
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
An individual who works, for financial or other compensation, for another person, partnership, association, corporation, governmental body, agency, or other entity employing one or more persons on a salary, wage, commission, or other compensation basis; a self-employed person.
INCOME TAX OFFICER or OFFICER
A person, public employee or private agency designated by Council to collect and administer the tax on earned income and net profits.[2]
NET PROFITS
The net income from the operation of a business, profession or other activity, except a corporation, after provisions 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.
NONRESIDENT
A person, partnership, association, or other entity domiciled outside the City.
PRECEDING YEAR
The calendar year before the current year.
RESIDENT
See Glossary, Chapter 1-302.
SUCCEEDING YEAR
The calendar year following the current year.
TAXPAYER
See Glossary, Chapter 1-302.
[1]
Editor's Note: Amended at time of adoption of Code (see Ch. 1-303).
[2]
Note: The Capital Area Tax Collection Bureau has been designated by City Council to collect the tax imposed by this chapter.

§ 5-707.2 Imposition of tax.

A. 
A tax for general revenue purposes of 1% is hereby imposed on the following:[1][2]
(1) 
Salaries, wages, commissions and other compensation earned on and after January 1, 1967, by individual residents of the City;
(2) 
Salaries, wages, commissions and other compensation earned in the City on and after January 1, 1967, by individual nonresidents of the City;
(3) 
Net profits earned on and after January 1, 1967, by residents of the City;
(4) 
Net profits earned on and after January 1, 1967, in the City by nonresidents of the City.
[1]
Editor's Note: Sections 1 and 2 of Ord. No. 10-2012, adopted 10-23-2012, provide as follows: "The Earned Income Tax imposed under Chapter 5-707.2 of the Codified Ordinances of the City of Harrisburg is increased from 1% to 2% upon residents of the City of Harrisburg effective immediately upon passage of this ordinance. The revenues generated from the 1% tax increase are not subject to sharing with the Harrisburg School District." Section 7 of Ord. No. 10-2012 provides as follows: "The tax increase imposed by this Ordinance shall be effective only for one year from the date this Ordinance is enacted, at which time the Earned Income Tax shall return to 1%, unless extended by a lawfully enacted Ordinance of City Council."
[2]
Ordinance No. 22-2013, adopted 9-16-2013, extended the 2% tax, effective 1-1-2014 to 12-31-2016, and stated that revenues generated from the 1% tax increase would not be subject to sharing with the Harrisburg School District.
B. 
The tax levied hereunder shall relate to and be imposed upon salaries, wages, commissions, and other compensation paid by an employer or on the employer's behalf to an employee or shall relate to and be imposed on the net profits of any business, profession or other activity carried on by any person or persons.
C. 
Every corporation which is subject to the Pennsylvania corporate net income tax, or exempt from the Pennsylvania corporate net income tax, and every foreign corporation which is subject to the Pennsylvania franchise tax, or exempt from the Pennsylvania franchise tax, shall be exempt from the tax imposed by this chapter.
D. 
The tax levied by this chapter shall be applicable to salaries, wages, commissions, and other compensation and to net profits earned in the period beginning January 1 and ending December 31. The tax shall continue in force on a calendar-year basis after 1967 or taxpayer fiscal-year basis without annual reenactment. After 1967, references to 1967 shall be references to the current year, and references to 1968 shall be references to the succeeding year.

§ 5-707.3 Net profits.

A. 
Every taxpayer who reasonably expects to earn any taxable net profits during the period between January 1 and December 31 shall, on or before April 15, make and file with the Income Tax Officer, on a form prescribed by the Income Tax Officer, a declaration of estimated net profits for the period beginning January 1 and ending December 31, setting forth the estimated amount of net profits reasonably expected for such period and subject to the tax, the amount of estimated tax imposed by this chapter on such estimated net profits, and such other relevant information as the Income Tax Officer may require. The taxpayer making the declaration shall, at the time of filing thereof, pay the City 1/4 of the estimated tax shown as due thereon, and such taxpayer shall thereafter pay 1/4 of the estimated tax in each of three installments, as follows: one installment on or before June 15; one installment on or before September 15; and the last installment on or before January 15.
B. 
A taxpayer who, on April 15, did not reasonably expect to earn any taxable net profits during the period between January 1 and December 31 and who, subsequent to April 15, reasonably expects to earn taxable net profits on or before December 31 shall make and file, on or before June 15, September 15, or January 15, whichever date next follows the date on which the taxpayer first reasonably expects such net profits, a declaration similar to that required under the foregoing subsection. The taxpayer making the declaration shall, at the time of filing thereof, pay to the City the estimated tax shown as due thereon; provided, however, that the taxpayer shall have the right to pay the estimated tax in equal installments on or before the quarterly installment payment dates which remain after the filing of the declaration.
C. 
The Income Tax Officer is hereby authorized to provide by regulation for the making and 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 hereinabove required shall thereafter either reasonably expect additional net profits not previously declared or find that net profits have been overestimated.
D. 
On or before April 15, every taxpayer who has earned taxable net profits shall make and file with the Income Tax Officer, on a form prescribed by said Officer, a final return showing all of such net profits for the period beginning January 1 and ending December 31, the total amount of tax due, the amount of estimated tax paid under the provisions of this chapter, and the balance due. When the return is made for a fiscal year, different from the calendar year, the return shall be made within 105 days from the end of said fiscal year. The percentage of the total net profits of any calendar or fiscal year of a taxpayer beginning or ending within the period beginning January 1 and ending December 31, to which the tax imposed by this chapter shall be applicable, shall be equal to the same percentage of such total net profits as the number of days in any such year within such period bears to the total number of days in any such year. 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. On or before January 31, a taxpayer may, in lieu of paying the fourth quarterly installment of estimated tax, elect to file a final return with the Income Tax Officer and make final payment or claim refund, as the case may be.
E. 
Every taxpayer who discontinues business prior to December 31 shall, within 30 days after the discontinuance of business, file a final return as hereinabove required and pay the tax due or demand refund or credit in the case of overpayment.

§ 5-707.4 Income subject to tax.

A. 
Every taxpayer who is employed on a salary, wage, commission, or other compensation basis and who reasonably expects to earn any taxable earnings not subject to the provisions of § 5-707.5 of this chapter (relating to the collection at source) shall, on or before April 15, make and file with the Income Tax Officer a declaration of estimated total taxable salaries, wages, commissions and other compensation for the period beginning January 1 and ending December 31; the estimated amount of tax thereon that will be deducted therefrom pursuant to § 5-707.5; the estimated amount of tax imposed by this chapter that will not be deducted therefrom pursuant to § 5-707.5; and such other relevant information as the Income Tax Officer may require. In preparing a declaration of estimated taxable salaries, wages, commissions, and other compensation taxable under this chapter, the taxpayer shall use the same amounts with respect to such items as shall have been used in preparing declaration of estimated tax for the year for federal income tax purposes, if such taxpayer shall be required to file any such declaration.
B. 
A taxpayer who, on April 15, did not reasonably expect to earn any salaries, wages, commissions, and other compensation not subject to the provisions of § 5-707.5 of this chapter (relating to the collection at source) during the period between January 1 and December 31 and who, subsequent to April 15, reasonably expects to earn salaries, wages, commissions, and other compensation not subject to the provisions of § 5-707.5 on or before December 31 shall make and file, on or before June 15, September 15, or January 15, whichever of these dates next follows the date on which the taxpayer first reasonably expects to earn such salaries, wages, commissions, and other compensation, a declaration similar to that required under Subsection A hereof. The taxpayer making the declaration shall, at the time of filing thereof, pay to the City the estimated tax shown as due thereon; provided, however, that the taxpayer shall have the right to pay the estimated tax in equal installments on or before the quarterly installment payment dates which remain after the filing of the declaration.
C. 
The Income Tax Officer is hereby authorized to provide by regulation for the making and filing of an adjusted declaration of estimated salaries, wages, commissions, and other compensation and for the payments of the estimated tax in cases where a taxpayer who has filed the declaration hereinabove required shall thereafter either reasonably expect additional salaries, wages, commissions, and other compensation not previously declared or expect that salaries, wages, commissions, and other compensation have been overestimated.
D. 
On or before April 15, every taxpayer who has received taxable salaries, wages, commissions, and other compensation shall make and file with the Income Tax Officer, on a form prescribed by such official, a final return showing all such salaries, wages, commissions, and other compensation earned during the period beginning January 1 and ending December 31; the total amount of tax due thereon; the amount of estimated tax thereon paid, if any; the amount, if any, of tax thereon that has been withheld pursuant to the provisions of § 5-707.5; and the balance of tax due. On or before January 31 of the succeeding year, a taxpayer may, in lieu of paying a fourth quarterly installment of estimated tax, elect to file a final return with the Income Tax Officer and make final payment or claim a refund, as the case may be. 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.

§ 5-707.5 Collection at source.

A. 
Every employer within the City who employs one or more persons on a salary, wage, commission, or other compensation basis, other than domestic servants, shall deduct, at the time of payment thereof, the tax imposed by this chapter on the salaries, wages, commissions, and other compensation due the employee or employees and shall, on or before April 30, July 31, October 31, and January 31 of the current year, respectively, make and file with the Income Tax Officer, on a form prescribed by said official, a return setting forth the taxes so deducted for the preceding quarterly periods ending March 31, June 30, September 30, and December 31, respectively.
B. 
On or before February 28, every such employer shall file with the Income Tax Officer, on forms prescribed by such official:
(1) 
An annual return showing the total amount of salaries, wages, commissions, and other compensation earned by an employee or employees on which a tax is imposed by this chapter; the total amount of tax deducted; and the total amount of tax paid to the City in respect to salaries, wages, commissions, and other compensation earned by the employee or employees during the period beginning January 1 and ending December 31;
(2) 
A return in respect of each person who was an employee during all or any part of the period beginning January 1 and ending December 31 and who earned during such period any salaries, wages, commissions, or other compensation subject to the tax imposed by this chapter, setting forth the employee's name, address and social security number; the amount of such salaries, wages, commissions, or other compensation earned by the employee during said period; the amount of tax deducted therefrom; and such other relevant information as the Tax Officer may require. Every employer shall furnish a copy of the individual return to the employee in respect of whom it was filed.
C. 
Every employer who discontinues business prior to December 31 shall, within 30 days after the discontinuance of business, file the returns hereinabove required and pay the tax due.
D. 
The failure or omission of any employer to make the deduction required by this section shall not relieve any employee from the payment of the tax or from complying with the requirements of this chapter relating to the filing of declarations and returns.
E. 
If an employer makes a deduction of tax as required by this section, the amount deducted shall constitute, in the hands of such employer, a trust fund held for the account of the City as beneficial owner thereof, and the employee from whose salaries, wages, commissions, or other compensations such tax was deducted shall be deemed to have paid such tax.

§ 5-707.6 Powers and duties of Income Tax Officer.

A. 
It shall be the duty of the Income Tax Officer to collect and receive the taxes, fines and penalties imposed by this chapter. It shall also be a duty to keep a record showing the amount received from each taxpayer or employer paying the tax and, if paid by such taxpayer or employer in respect of another taxpayer, the name of such other taxpayer and the date of such receipt.
B. 
The Income Tax Officer is hereby charged with the administration and enforcement of the provisions of this chapter and is hereby empowered to prescribe, adopt, promulgate, and enforce rules and regulations relating to any matter pertaining to the administration and enforcement of this chapter, 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 prescribe forms necessary for the administration of this chapter.
C. 
The Income Tax Officer and designated agents are hereby authorized to examine the books, papers and records of any taxpayer or employer 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 taxpayer and employer is hereby directed and required to give to the Income Tax Officer or designee the opportunity for such examinations and investigations as are hereby authorized.
D. 
Any information gained by the Income Tax Officer or designee or by any other official, agent or employee of the City as a result of any declarations, returns, investigations, hearings, or verifications required or authorized by this chapter shall be confidential and shall not be disclosed to any person except for official use in connection with the administration or enforcement of this chapter or as otherwise provided by law.
E. 
Any taxpayer or employer aggrieved by any action of the Income Tax Officer shall have the right of appeal as provided by law.

§ 5-707.7 Collection of unpaid taxes.

A. 
The Income Tax Officer may sue in the name of the City for the recovery of taxes due and unpaid under this chapter.
B. 
Any suit brought to recover the tax imposed by this chapter shall be commenced within three years after such tax is due or within three years after a declaration or return has been filed, whichever date is later, provided that this limitation shall not prevent the institution of a suit within six years for the collection of any tax due or determined to be due in the following instances:
(1) 
Where no declaration or return was filed by a person, although a declaration or return was required to be filed under the provisions of this chapter;
(2) 
In the case of a false or fraudulent declaration or return with the intent to evade tax;
(3) 
Where any employer has deducted taxes under the provisions of this chapter and has failed to pay the amounts so deducted to the City of Harrisburg; or
(4) 
In the case of substantial understatement of tax liability of 25% or more, and no fraud.
C. 
The Income Tax Officer may sue for recovery of an erroneously issued refund, provided such suit is begun within 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.
D. 
This section shall not be construed to prohibit the City from recovering delinquent taxes by any other means provided by this chapter or the Local Tax Enabling Act.[1]
[1]
Editor's Note: See 53 P.S. § 6924.101 et seq.

§ 5-707.8 Interest and penalties.

If, for any reason, the tax is not paid when due, interest at the rate of 6% per annum on the amount of said tax and an additional penalty of 0.5% of the amount of 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 taxpayer or employer liable therefor shall, in addition, be liable for the costs of collection and the interest and penalties herein imposed.

§ 5-707.9 Payment and refunds.

The Income Tax Officer is hereby authorized to accept payment of the amount of tax claimed by the City in any case where any person disputes the validity or amount of the City's claim for the tax. If it is thereafter judicially determined by a court of competent jurisdiction that there has been an overpayment to the Income Tax Officer, the amount of the overpayment shall be refunded or credited to the taxpayer or employer who paid.

§ 5-707.10 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 City 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 the net profits of any institution or organization operated for public, educational or charitable purposes, to an institution or organization not organized or operated for private profit, or to a trust or a foundation established for any of such purposes.
B. 
This section shall not be construed to exempt any employer from the duty of collecting the tax at the source from employees and paying the amount collected to the City under the provisions of § 5-707.5 of this chapter.

§ 5-707.99 Penalty.

See Chapter 5-717, Enforcement and Penalties.