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:
ASSOCIATION
A partnership, limited partnership, or any other unincorporated
group of two or more persons.
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.
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.
DOMICILE
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.
EARNED INCOME
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.
EMPLOYER
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.
INCOME TAX OFFICER OR OFFICER
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.
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.
NONRESIDENT
A person, partnership, association or other entity domiciled
outside the taxing district.
RESIDENT
A person, partnership, association or other entity domiciled
in the taxing district.
TAXPAYER
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.
[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.
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.
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 and related laws without restriction.