The following words and phrases, when used in
this article, shall have the meanings ascribed to them in this section,
except where the context or language clearly indicates or requires
a different meaning:
COLLECTOR
The person, public employee or private agency designated
by the political subdivision to collect and administer the tax herein
imposed.
DCED
The Department of Community and Economic Development of the
Commonwealth of Pennsylvania.
EARNED INCOME
Compensation, as this term is defined in Section 13 (relating
to earned income taxes) of the Local Tax Enabling Act, the Act of
December 31, 1965, P.L. 1257, § 13, as amended (53 P.S.
§ 6913, as amended).
EMPLOYER
An individual, partnership, association, limited liability
corporation, 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.
HE, HIS OR HIM
Indicates the singular and plural number, as well as male,
female and neuter genders.
INDIVIDUAL
Any person, male or female, engaged in any occupation, trade
or profession within the corporate limits of the political subdivision.
NET PROFITS
The net income from the operation of a business, profession,
or other activity, as this term is defined in Section 13 (relating
to earned income taxes) of the Local Tax Enabling Act, the Act of
December 31, 1965, P.L. 1251, § 13, as amended (53 P.S.
§ 6913, as amended).
OCCUPATION
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 political subdivision
for which compensation is charged or received, whether by means of
salary, wages, commission or fees for services rendered.
TAX
The local services tax at the rate fixed in § 231-9
of this article.
TAX YEAR
The period from January 1 until December 31 in any year;
a calendar year.
[Amended 1-20-2009 by Ord. No. 58-2009; 1-26-2010 by Ord. No.
7-2010; 11-15-2012 by Ord. No. 69-2012; 1-30-2014 by Ord. No.
6-2014; 1-29-2015 by Ord. No. 79-2015; 5-7-2015 by Ord. No. 95-2015; 1-28-2016 by Ord. No. 9-2016; 3-2-2017 by Ord. No. 92-2017; 4-15-2019 by Ord. No. 61-2019; 12-1-2020 by Ord. No. 34-2020; 5-25-2021 by Ord. No.
70-2021; 12-7-2021 by Ord. No.
96-2021; 2-7-2023 by Ord. No. 50-2023]
A. For specific revenue purposes, an annual tax is hereby levied and
assessed, commencing January 1, 2023, upon the privilege of engaging
in an occupation with a primary place of employment within the City
of Scranton during the tax year. Each natural person who exercises
such privilege for any length of time during any tax year shall pay
the tax for that year in the amount of $156, assessed on a pro rata
basis, in accordance with the provisions of this article.
B. This tax may be used solely for the City of Scranton's distressed
pension system.
C. The tax imposed herein is effective for fiscal year 2023.
[Amended 5-7-2015 by Ord.
No. 95-2015; 2-7-2023 by Ord. No. 50-2023]
A. Exemption. Any person whose total earned income and
net profits from all sources within the political subdivision is less
than $15,600 for any calendar year in which the tax is levied is exempt
from the payment of the tax for that calendar year. In addition, the
following persons are exempt from payment of the tax:
(1) 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 service 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.
(2) 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. For the purposes of this subsection, "reserve component
of the armed forces" shall mean 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.
B. Procedure to claim exemption.
(1) A person seeking to claim an exemption from the local services tax may annually file an exemption certificate with the political subdivision and with the person's employer affirming that the person reasonably expects to receive earned income and net profits from all sources within the political subdivision of less than $15,600 in the calendar year for which the exemption certificate is filed. In the event the political subdivision utilizes a tax collection officer, it shall provide a copy of the exemption certificate to that officer. The exemption certificate shall have attached to it a copy of all the employee's last pay stubs or W-2 forms from employment within the political subdivision for the year prior to the fiscal year for which the employee is requesting to be exempted from the tax. Upon receipt of the exemption certificate and until otherwise instructed by the political subdivision or except as required by Subsection
B(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. The exemption certificate form shall be the uniform form provided by the political subdivision.
(2) With respect to a person who claimed an exemption for a given calendar year from the tax, upon notification to an employer by the person or by the political subdivision that the person has received earned income and net profits from all sources within the political subdivision equal to or in excess of $15,600 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 municipality in an amount equal to or in excess of $15,600 in that calendar year, an employer shall withhold the local services tax from the person under Subsection
B(3).
(3) If a person who claimed an exemption for a given calendar year from the tax becomes subject to the tax for the calendar year under Subsection
B(2), the employer shall withhold the tax for the remainder of that calendar year. The employer shall withhold from the person, for the first payroll period after receipt of the notification under Subsection
B(2), 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 the employment of a person subject to withholding of the tax under this clause is subsequently severed in that calendar year, the person shall be liable for any outstanding balance of tax due, and the political subdivision may pursue collection under this article.
(4) Except as provided in Subsection
B(2), it is the intent of this subsection that employers shall not be responsible for investigating exemption certificates, monitoring tax exemption eligibility or exempting any employee from the local services tax.
C. Refunds. The City of Scranton, in consultation with
the collector and DCED, shall establish procedures for the processing
of refund claims for any tax paid by any person who is eligible for
exemption, which procedures shall be in accord with provisions of
the general municipal law relating to refunds of overpayments and
interest on overpayments. Refunds made within 75 days of a refund
request or 75 days after the last day the employer is required to
remit the tax for the last quarter of the calendar year, whichever
is later, shall not be subject to interest. No refunds shall be made
for amounts overpaid in a calendar year that do not exceed $1. The
City of Scranton or the collector shall determine eligibility for
exemption and provide refunds to exempt persons.
Each employer shall prepare and file a return
showing a computation of the tax on forms to be supplied to the employer
by the Collector. If an employer fails to file the return and pay
the tax, whether or not the employer makes collection thereof from
the salary, wages or commissions paid by him or her to an 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
been originally levied against the employer.
In each tax year, each employer shall use his
or her employment records to determine the number of employees from
whom such tax shall be deducted and paid over to the Collector on
or before the 30th day following the end of each calendar quarter
of each such tax year.
Each self-employed individual who performs services
of any type or kind or engages in any occupation or profession within
a primary place of employment within the political subdivision shall
be required to comply with this article and pay the pro rata portion
of the tax due to the Collector on or before the 30th day following
the end of each quarter.
All employers and self-employed individuals
residing or having their places of business outside of the political
subdivision but who perform services of any type or kind or engage
in any occupation or profession within the political subdivision do,
by virtue thereof, agree to be bound by and subject themselves to
the provisions, penalties and regulations promulgated under this article
with the same force and effect as though they were residents of the
political subdivision. Further, any individual engaged in an occupation
within the political subdivision and an employee of a nonresidential
employer may, for the purpose of this article, be considered a self-employed
person, and in the event his or her tax is not paid, the political
subdivision shall have the option of proceeding against either the
employer or employee for the collection of this tax as hereinafter
provided.
Whoever makes any false or untrue statement
on any return required by this article or whoever refuses inspection
of the books, records or accounts in his or her custody and control
setting forth the number of employees subject to this tax who are
in his or her employment or whoever fails or refuses to file any return
required by this article shall be guilty of a violation and, upon
conviction thereof, shall be sentenced to pay a fine of not more than
$600 and costs of prosecution and, in default of payment of such fine
and costs, to imprisonment for not more than 30 days. The action to
enforce the penalty herein prescribed may be instituted against any
person in charge of the business of any employer who shall have failed
or who refuses to file a return required by this article.