[Adopted 11-16-1971 by Ord. No. 71-32]
This article shall be known and styled as the
"Earned Income and Net Profits Tax Ordinance of the Borough of Chambersburg."
As used in this article, the following terms
shall have the meanings indicated:
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 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. 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 and 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 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 of the Borough of Chambersburg to collect and administer
the tax on earned income and net profits.
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 1-14-2003 by Ord. No. 2003-1]
An annual tax for general revenue purposes of
1% is hereby imposed on the earned income received and net profits
earned in the period beginning January 1 of the current year and ending
December 31 of the current year by all persons, individuals, partnerships,
associations, and businesses who or which are residents of the Borough
of Chambersburg, or nonresidents of the Borough of Chambersburg, for
work done, services performed, or businesses conducted within the
Borough of Chambersburg. This tax shall continue in force on a calendar-year
or taxpayer fiscal-year basis, without annual reenactment.
[Amended 6-14-1972 by Ord. No. 72-29; 2-11-1976 by Ord. No.
76-24]
A.
Net profits.
(1)
Beginning in 1972, 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 July 15 of the current year, October
15 of the current year, and January 15 of the succeeding year, respectively.
(2)
Any taxpayer who first anticipated any net profit
after April 15 of the current year shall make and file the declaration
hereinabove required on or before July 15 of the current year, October
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 shall 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. Beginning
in 1972, 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 15 of the current year, July
15 of the current year, October 15 of the current year, and January
15 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.
A.
Every employer having an office, factory, workshop,
branch, warehouse or other place of business within the Borough of
Chambersburg 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.
Subject to the provisions of the Act[1] as to listing the tax imposed by this article on the register
with the Department of Community Affairs, every employer having an
office, factory, workshop, branch, warehouse, or other place of business
within the Borough of Chambersburg 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 shall, 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, file a return and pay to the officer the
amount of taxes deducted during the preceding three-month period 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.
(1)
Such return, unless otherwise agreed upon between
the officer and employer, shall show the name, residence, and Social
Security number of each such employee, the earned income of such employee
during such preceding three-month period, the tax deducted therefrom,
the political subdivisions imposing the tax upon such employee, the
total earned income of all such employees during such preceding three-month
period, and the total tax deducted therefrom and paid with the return.
(2)
Any employer who for two of the preceding four quarterly
periods has failed to deduct the proper tax, or any part thereof,
or has failed to pay over the proper amount of tax to the taxing authority
may be required by the officer to file his return and pay the tax
monthly. In such cases, payments of tax shall be made to the officer
on or before the last day of the month succeeding the month for which
the tax was withheld.
[1]
Editor's Note: Section 2 of this ordinance
stated that it was enacted under the authority of Act 511 of December
31, 1965, the Local Tax Enabling Act, as amended. See 53 P.S. § 6901
et seq.
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
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.
[Amended 5-27-1981 by Ord. No. 81-9]
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 Borough of Chambersburg 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 him 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 Borough
of Chambersburg and the other political subdivisions appointing him
and shall be for the use of the Borough of Chambersburg 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. The Borough of Chambersburg 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.
(4)
Each such bond shall contain the name or names of
the surety company or companies bound thereon. The Council of the
Borough of Chambersburg 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.
(5)
The Council of the Borough of Chambersburg 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 of the Borough of Chambersburg 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.
(6)
The Council of the Borough of Chambersburg 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 re-examination 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 the Council of the Borough of Chambersburg. 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 filing, reporting,
and payment dates for taxpayers whose fiscal years do not coincide
with the calendar year.
H.
For calendar year 1981 and subsequent years, the officer
shall give a credit to nonresidents of Pennsylvania on the same basis
as credit is given to nonresidents of the Borough who live in Pennsylvania.
The income officer shall receive such compensation
for his services and expenses as the Council of the Borough of Chambersburg
shall determine.
A.
The officer may sue in the name of the Borough of
Chambersburg 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 article, there shall be no limitation.
C.
This section shall not be construed to limit the Borough
of Chambersburg from recovering delinquent taxes by any other means.
D.
The officer may sue for recovery of an erroneous refund
provided 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 is not paid when due,
interest at the rate of 6% per annum on the amount of said 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 Justice of the Peace, Alderman, or Magistrate, or court
of competent jurisdiction in the county in which the Borough of Chambersburg
is located, be sentenced to pay a fine of not more than $500 for each
offense, and costs, and, in default of payment of said 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 Justice of the Peace, Alderman or Magistrate, 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 said 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.
It is intended that the Borough of Chambersburg
and its income tax officer shall have all powers and rights under
the provisions of the aforesaid Act[1] and related laws without restriction.[2]
[1]
Editor's Note: Section 2 of this ordinance
stated that it was enacted under the authority of Act 511 of December
31, 1965, the Local Tax Enabling Act, as amended. See 53 P.S. § 6901
et seq.
[2]
Editor's Note: Former Part 3, Per Capita,
of this chapter, which immediately followed this section and was adopted
12-23-1987 by Ord. No. 87-15, was repealed 12-18-1991 by Ord. No.
91-15.
