[Adopted 11-20-2007 by Ord. No. 2007-5[2]]
This article shall be known and may be cited
as the "Local Services Tax."
A.
Every individual who engages in an occupation with
a primary place of employment within the Borough of Malvern during
the tax year shall pay a local services tax to the Borough in the
amount of $52 per person per calendar year, irrespective of the number
of political subdivisions within which a person may be employed.
B.
All taxes imposed by this article, together with all
interests, costs, and penalties, shall be recoverable by the Borough
of Malvern, or its authorized employees or by any person or agency
so designated and authorized by the Borough, in accordance with the
provisions of the Local Tax Enabling Act[1] and/or as debts of like amount otherwise recoverable by
law.
[1]
Editor's Note: See 53 P.S. § 6901
et seq.
C.
The local services tax imposed under this article
shall be used solely for the following purposes as the same may be
allocated by the Borough from time to time:
(1)
Emergency services, which shall include emergency
medical services, police services and/or fire services;
(2)
Road construction and/or maintenance;
(3)
Reduction of property taxes; or
(4)
Property tax relief through implementation of a homestead
and farmstead exclusion in accordance with 53 Pa.C.S. Chapter 85,
Subchapter F (relating to homestead property exclusion).
D.
The Borough of Malvern shall use no less than 25%
of the funds derived from the tax for emergency services.
E.
This tax is in addition to all other taxes of any
kind or nature heretofore levied by the Borough of Malvern.
F.
This article is enacted under the authority of the
Local Tax Enabling Act, as amended (53 P.S. § 6901 et seq.).
As used in this article, the following terms
shall have the meanings indicated except where the context or language
clearly indicates or requires a different meaning:
The person, public employee, or private agency designated
by the Borough of Malvern to collect and administer the tax herein
imposed.
The Department of Community and Economic Development of the
Commonwealth of Pennsylvania.
The same meaning as provided for in The Local Tax Enabling
Act, Act of December 31, 1965, P.L. 1257, Section 13, Division I,
as amended, 53 P.S. § 6913.
An individual whose compensation is subject to the withholding
of federal income tax and who performs services for an employer.
An individual, partnership, association, limited-liability
company, limited partnership, limited-liability partnership, corporation,
governmental body, agency or other entity employing one or more persons
on a salary, wage, commission or other compensation basis, including
a self-employed person.
The singular and plural number as well as male, female and
neuter genders.
Any person, male or female, engaged in any occupation, trade
or profession of any nature within the corporate limits of the Borough
of Malvern, whether in the employ of another or self-employed.
The net income from the operation of a business, profession,
or other activity as this term is defined in Section 13 of The Local
Tax Enabling Act, as amended, 53 P.S. § 6913.
Any trade, profession, business or undertaking of any type,
kind or character, including services, domestic or other, carried
on or performed within the corporate limits of the Borough of Malvern
for which compensation is charged or received, whether by means of
salary, wages, commission, fees or otherwise, for services rendered.
The area within the corporate limits of the Borough of Malvern.
The United States Army Reserve, United States Navy Reserve,
United States Marine Corps Reserve, United States Coast Guard Reserve,
United States Air Force Reserve, the Pennsylvania Army National Guard
or the Pennsylvania Air National Guard.
The local services tax in the amount of $52 levied by this
article on each individual engaged in any occupation, as herein before
defined, within the corporate limits of the Borough of Malvern.
The period from January 1 until December 31 in any year;
the calendar year.
A.
Duty of employer to collect and make payment. Each
employer within the Borough of Malvern, as well as those employers
situated outside of the Borough of Malvern but who engage in business
within the Borough of Malvern, is hereby charged with the duty of
collecting from each employee engaged by the employer and performing
for the employer within the Borough of Malvern the tax of $52 per
annum and making a return and payment thereof to the Borough Tax Collector.
Subject to the withholding requirements of this section, each employer
is hereby authorized to deduct the tax from the compensation of each
employee in its employ, whether said employee is paid by salary, wages
or commissions and whether or not part or all of such services are
performed within the Borough of Malvern. Each employer shall pay the
tax to the Borough Tax Collector as provided herein, whether or not
the tax was deducted from the compensation of each employee in its
employ.
(1)
An employer required hereunder to collect the tax shall withhold a pro rata share of the total tax per annum for each payroll period in which the person is engaged in an occupation. The pro rata share of the tax assessed on the person for a payroll period shall be determined by dividing the combined rate of the local services tax levied for the calendar year by the number of payroll periods established by the employer for the calendar year. For purposes of determining the pro rata share, an employer shall round down the amount of the tax collected each payroll period to the nearest 1/100 of a dollar. Collection of the local services tax levied under this section shall be made on a payroll period basis for each payroll-period in which the person is engaging in an occupation, except as provided for in § 185-21A(2).
(2)
In the case of an employee who has concurrent employment,
an employer shall refrain from withholding the local services tax
if the employee provides a recent pay statement from a principal employer
that includes the name of the employer, the length of the payroll
period and the amount of the local services tax withheld and a statement
from the employee that the pay statement is from the employer's principal
employer and the employee will notify other employers of a change
in principal place of employment within two weeks of its occurrence.
The employee's statement described in this subsection shall be provided
on the form prescribed by the DCED.
(3)
No employer shall be held liable for failure to withhold the tax or for the payment of the withheld tax money to the Borough if the failure to withhold taxes arises from incorrect information submitted by the employee as to the employee's place or places of employment, the employee's principal office, or where the employee is principally employed. Further, an employer shall not be liable for payment of the local services tax in an amount exceeding the amount withheld by the employer if the employer complies with the provisions of §§ 185-21A(1) and 185-23E of this article and this section and remits the amount so withheld in accordance with this article.
B.
Returns; responsibility for payment. Each employer
shall prepare and file a return showing a computation of the tax on
forms to be supplied to him by the Borough Tax Collector. It is further
provided that if the employer fails to file said return and pay said
tax, whether or not he makes collection thereof from the salary, wages
or commissions paid by him to said employee, except as provided hereafter
in this article, the employer shall be responsible for the payment
of the tax in full as though the tax had originally been levied against
the employer.
C.
Dates for determining liability and payment. Each
employer shall use his employment record as of each payroll period
in the calendar year to determine from whom the tax shall be deducted.
An employer shall be required to remit quarterly payments of the tax
to the Borough Tax Collector on or before the 30th day after the end
of each quarter of a calendar year on forms prescribed by the Borough
Tax Collector.
D.
Self-employed individuals. Every taxpayer who is self-employed
and has not filed an exemption certificate with the Tax Collector,
or whose tax for any other reason is not collected under this section,
shall file a return on a form prescribed by the Borough Tax Collector
and shall pay a pro rata share of the tax directly to the Borough
Tax Collector on or before the 30th day after the end of each calendar
quarter. The pro rata share of the tax assessed on a taxpayer for
a calendar quarter shall be determined by dividing the rate of the
tax levied under this article for the year by four.
E.
Persons residing outside the Borough. All self-employed
individuals and employers residing or having their place of business
outside the corporate limits of the Borough of Malvern and engaging
in an occupation within the Borough of Malvern do by virtue thereof
agree to be bound by and subject themselves to the provisions of this
article and the regulations promulgated hereunder with the same force
and effect as though they had their place of business in or were residents
of the Borough of Malvern. Further, any individual engaged in an occupation
within the Borough of Malvern and as an employee of a nonresident
employer may, for the purpose of this article, be considered a self-employed
person, but in the event that the tax is not paid, the Borough Tax
Collector shall have the option of proceeding against either the employer
or employee for the collection of the tax as hereinafter provided.
F.
Individuals engaged in more than one occupation.
(1)
Each employee who shall have more than one occupation within the Borough of Malvern shall be subject to the payment of this tax on his principal occupation, and his principal employer shall deduct this tax. The principal employer shall deliver to such employee evidence of deduction. This evidence of deduction showing payment having been made, when presented to any other employer, shall be authority for such employer to not deduct this tax from the employee's wages, in accordance with § 185-21A(2), but to include such employee on his return by setting forth his name, social security number and the name of the employer who deducted this tax.
(2)
The situs of the tax shall be the place of employment
on the first day the person becomes subject to the tax during each
payroll period.
(a)
In the event a person is engaged in more than
one occupation, that is, concurrent employment, or an occupation which
requires the person working in more than one political subdivision
during a payroll period, the priority of claim to collect the local
services tax shall be in the following order:
[1]
First, the political subdivision in which a
person maintains his or her principal office or is principally employed;
[2]
Second, the political subdivision in which the
person resides and works if the tax is levied by that political subdivision;
[3]
Third, the political subdivision in which a
person is employed and which imposes the tax nearest in miles to the
person's home.
(b)
In case of dispute, a tax receipt of the taxing
authority for that calendar year declaring that the taxpayer has made
prior payment constitutes prima facie certification of payment to
all other political subdivisions.
(3)
It is the intent of this subsection that no individual
shall pay more than $52 in any calendar year as a local services tax,
irrespective of the number of political subdivisions within which
such individual may be employed within any given calendar year. In
case of dispute, a proof of payment that that tax has been paid for
that calendar year shall constitute prima facie certification of payment
to all other political subdivisions.
G.
Each employer shall ensure that exemption certificate
forms are readily available to employees at all times and shall furnish
each new employee with an exemption certificate form at the time of
hiring and prior to the first payroll period of each year.
A.
Powers and duties of Borough Tax Collector.
(1)
It shall be the duty of the Borough Tax Collector
to accept and receive payments of the tax and to keep a record thereof
showing the amount received by him from each employer or self-employed
individual, together with the date the tax was received.
(2)
The Borough Tax Collector is hereby charged with the
administration and enforcement of this article and is hereby charged
and empowered to prescribe, adopt and promulgate rules and regulations
relating to any matter pertaining to the administration and enforcement
of this article, including provisions for the examination of the books,
accounts and payroll records of any employer subject to this article,
the examination and correction of any return made in compliance with
this article and any payment alleged or found to be incorrect or as
to which overpayment is claimed and found to have occurred. Any person
aggrieved by any decision of the Borough Tax Collector shall have
the right to appeal consistent with the Local Taxpayers Bill of Rights
under Act 50 of 1998.[1]
[1]
Editor's Note: See 53 Pa.C.S. § 8421
et seq.
(3)
The Borough Tax Collector is hereby authorized to
examine those books, accounts and payroll records of any employer
necessary to verify the accuracy of any return made by an employer
or, if no return was made, to ascertain the tax due. Each employer
is hereby directed and required to give the Borough Tax Collector
the means, facilities and opportunity for such examination.
B.
Late payment; recovery.
(1)
In the event that any tax under this article remains
due or unpaid 30 days after the due dates above set forth, and without
waiving any other rights available to the Borough pursuant to applicable
law, the Borough Tax Collector, on behalf of the Borough, may sue
for the recovery of any such tax due or unpaid under this article,
together with interest and penalty.
(2)
If for any reason the tax is not paid when due, interest
at the rate of 6% on the amount of such tax shall be calculated beginning
with the due date of the tax and a penalty of 5% shall be added to
the flat rate of such tax for nonpayment thereof. Where suit is brought
for the recovery of this tax or other appropriate remedy undertaken,
the individual liable therefor shall, in addition, be responsible
and liable for the costs of collection, including reasonable attorneys'
fees.
C.
Violations and penalties. Whoever makes any false or untrue statement on any return or record required by this article, or whoever refuses inspection of those books, records or accounts required in § 185-22A(3) in his custody and control, or whoever fails or refuses to file any return required by this article or fails to pay the tax due shall, upon being found liable therefor in a civil enforcement proceeding, pay a fine of not more than $600, plus all court costs, including reasonable attorney's fees, incurred by the Borough of Malvern in the enforcement of this article. It is further provided that the action to enforce the fine and penalty herein provided may be instituted against any person in charge of the business of any employer who has failed or refused to file a return required by this article. No judgment shall be imposed until the date of the determination of the violation by the Magisterial District Judge and/or Court. If the defendant neither pays nor timely appeals the judgment, the Borough of Malvern may enforce the judgment pursuant to the applicable rules of civil procedure. Further, the appropriate officers or agents of the Borough of Malvern are hereby authorized to seek equitable relief, including injunction, to enforce compliance herewith.
A.
Any person whose total earned income and net profits
from all sources within the Borough of Malvern is less than $12,000
per calendar year in which the tax is levied shall be exempt from
this tax upon the filing of an exemption certificate with the Local
Services Tax Collector.
(1)
A person seeking exemption from the tax under this § 185-23A must annually file an exemption certificate with the employer and the Borough Tax Collector affirming that the person reasonably expects to receive earned income and net profits from all services within the Borough of Malvern of less than $12,000 in the calendar year for which the exemption certificate is filed. The exemption certificate shall have attached to it a copy of all of the employee's last pay stubs or W-2 forms from employment within the Borough of Malvern for the year prior to the fiscal year for which the employee is requesting to be exempt from the tax. Upon receipt of the exemption certificate and until otherwise instructed by the Borough or except as required by § 185-23A(2), the employer shall not withhold the tax from the person during the calendar year or the remainder of the calendar year for which the exemption certificate applies. Employers shall ensure that the exemption certificate forms are readily available to employees at all times and shall furnish each new employee with a form at the time of hiring.
(2)
With respect to a person who claimed an exemption for a given calendar year from the local services tax pursuant to this § 185-23A, upon notification to an employer by the person or by the Borough of Malvern that a person has received earned income and net profits from all sources within the Borough of Malvern equal to or in excess of $12,000 in that calendar year or that the person is otherwise ineligible for the tax exemption for that calendar year, or upon an employer's payment to the person of earned income within the Borough of Malvern in an amount equal to or in excess of $12,000 in that calendar year, an employer shall withhold the local services tax from the person for the remainder of that calendar year. The employer shall withhold from the person, for the first payroll period after receipt of the notification hereunder, a lump sum equal to the amount of tax that was not withheld from the person due to the exemption claimed by the person under this subsection, plus the per-payroll amount due for that first payroll period. The amount of tax withheld per-payroll period for the remaining payroll periods in that calendar year shall be the same amount withheld for other employees. In the event that the employment of a person subject to withholding of the tax under this subsection is subsequently severed in that calendar year, the person shall be liable for any outstanding balance of tax due, and the Borough of Malvern may pursue collection of the tax.
B.
Any person who has served in any war or armed conflict
in which the United States was engaged and is honorably discharged
or released under honorable circumstances from active services if,
as a result of military service, the person is blind, paraplegic or
a double or quadruple amputee or has a service-connected disability
declared by the United States Veterans Administration or its successor
to be a total one-hundred-percent-disability shall be exempt from
this tax upon the filing of an exemption certificate with the Borough
Tax Collector.
C.
Any person who serves as a member of a reserve component
of the armed forces and is called to active duty at any time during
the taxable year shall be exempt from this tax upon the filing of
an exemption certificate with the Borough Tax Collector.
D.
The Borough Tax Collector is hereby charged and empowered
to adopt regulations for the processing of claims for exemptions under
this section.
E.
The exemption certificate for any exemption under
this section must be in a form substantially similar to the uniform
exemption certificate prescribed by the DCED.
A.
A person who overpaid the local services tax for a
calendar year shall be entitled to a refund of the tax by filing a
refund request with the Borough Tax Collector. A person shall only
be entitled to a refund of tax for amounts overpaid in a calendar
year that exceed $1.
B.
The Borough Tax Collector is hereby charged and empowered
to adopt regulations for the processing of refund claims for overpaid
local services tax consistent with 53 Pa.C.S. § 8425, as
amended (relating to refunds of overpayments), and 53 Pa.C.S § 8426,
as amended (relating to interest on overpayments).
C.
A person shall not be entitled to interest on the amount of refunded tax if the Borough pays the refund within 75 days of the refund request or 75 days after the last day the employer is required to remit the local services tax for the last quarter of the calendar year under § 185-21C, whichever is later.
A.
Nothing contained in this article shall be construed
to empower the Borough to levy and collect the tax hereby imposed
on any occupation not within the taxing power of the Borough under
the Constitution of the United States and the laws of the Commonwealth
of Pennsylvania.
B.
If the tax hereby imposed under the provisions of
this article shall be held by any court of competent jurisdiction
to be in violation of the Constitution of the United States or of
the laws of the Commonwealth of Pennsylvania as to any individual,
the decision of the court shall not affect or impair the right to
impose or collect said tax or the validity of the tax so imposed on
other persons or individuals as herein provided.
C.
If any term, condition, or provision of this article
shall, to any extent, be held to be invalid or unenforceable by a
valid order of any court or regulatory agency, the remainder hereof
shall be valid in all other respects and continue to be effective.
In the event of a subsequent change in applicable law so that the
provision which had been held invalid is no longer invalid, said provision
shall thereupon return to full force and effect without further action
by the Borough.
Except as set forth hereafter, all ordinances
or parts of ordinances inconsistent herewith are hereby repealed,
provided that nothing herein shall be construed to repeal the imposition
and collection of an occupation privilege tax, plus applicable penalties
and interest, for the calendar year 2005 and all prior calendar years,
or of an emergency and municipal services tax, plus applicable penalties
and interest, for the calendar years 2006 and 2007, as the same existed
prior to this amendment.
The tax imposed by this article shall be effective
31 days from enactment and shall apply to tax years commencing on
or after January 1, 2008.
