Township of Upper Merion, PA Business Privilege Tax

All gross receipts of cash, credits or property of any kind or nature received in cash or credit transactions, allocable or attributable to the Township, whether derived from within or outside the Township and regardless of taxpayer's method of accounting, for services rendered by any business, trade, occupation or profession, without deduction therefrom on account of the cost of property sold, materials used, labor, service or other cost, interest or discount paid or any other expenses.

The term "gross receipts" shall not include:

In the case of a financial business, the cost of securities and other property sold, exchanged, paid at maturity or redeemed or money received in payment of advances, credits and loans (not to exceed the principal amount of such advances, credits and loans) and deposits.

In the case of a broker, any portion of the fees or commissions with respect to any transaction paid by him to another broker, underwriter or insurer on account of a purchase or sale of a contract for goods, commodities or insurance contract initiated by or exercised or cleared in conjunction with such other broker.

WHOLESALE DEALER OR VENDOR

Federal excise tax or sales tax due to the Commonwealth of Pennsylvania.

LICENSE YEAR

The period from January 1 to December 31, inclusive, and each year thereafter.

PERSON

Any individual, partnership, limited partnership, association, firm, corporation or any other entity or taxpayer of any kind engaged in a business within the limits of the Township. Whenever used in any clause prescribing or imposing a penalty, the term "person," as applied to associations, shall mean the partners or members thereof and, as applied to corporations, the officers thereof.

RETAIL DEALER OR VENDOR

Any person who is a dealer in or vendor of goods, wares and merchandise, except a person who is a wholesale dealer or vendor as defined in this article.

SERVICE

Any act or instance of helping or benefitting another for consideration.

TAXPAYER

A person subject to the payment of the tax imposed by this article.

TAX YEAR

The twelve-month period beginning the first day of January (or in the case of a person commencing business any day after the first day of January, the first day in the tax year in which a person commences a business in the Township) and ending the 31st day of December immediately following.

TOWNSHIP

Upper Merion Township.

Any dealer or vendor whose customers purchase goods, wares, merchandise or materials for the purpose of reselling.

The masculine includes the feminine, the singular includes the plural, and vice versa.

§ 149-37 Registration required.

[Amended 1-9-1989 by Ord. No. 89-551; 2-18-1993 by Ord. No. 93-608]

For the tax year beginning January 1 and for each tax year thereafter, every person engaged in, desiring to continue to engage in or desiring hereafter to begin to engage in a business in the Township shall, on or before the 31st day of January of the tax year or prior to commencing business in such tax year, make application for one registration for each actual place of business within the Township and, if such person has no actual place of business within the Township, make application for one registration with the Business Tax Receiver. Such registration shall be made by the completion of an application furnished by the Business Tax Receiver and the payment of a registration fee to be established by the Board of Supervisors. Each registration shall be signed by the applicant, if a natural person, or in the case of a corporation, by an officer thereof or, in the case of an association or partnership, by a member or partner thereof or by the authorized person of any other legal entity. If an individual or business entity conducts business under a fictitious name, such individual or entity shall apply for registration in both the true and fictitious names of the individual and entity and shall list the fictitious name first on the application. Each separate individual or business entity shall apply for a separate registration.

Each applicant shall receive a business privilege license from the Business Tax Receiver, which shall not be assignable. In the case of loss, defacement or destruction of any license, the person to whom the license was issued shall apply to the Business Tax Receiver for a new license for which a fee shall be charged as established by the resolutions governing this article. Such license shall be conspicuously posted at each place of business within the Township at all times. Any taxpayer who is in default in payment of tax due hereunder shall be refused a license until such tax is paid in full.

Each person in the Township who leases property, products or services used by a business, as defined in this article, shall file a form with the Township on or before February 15 of each tax year that sets forth the names and present addresses of each of the lessees in the Township during both the preceding tax year and the current tax year.

§ 149-38 Estimated tax; exemptions.

[Amended 1-9-1989 by Ord. No. 89-551; 9-25-1989 by Ord. No. 89-562; 2-18-1993 by Ord. No. 93-608]

Except as set forth in Article V below, there is hereby levied a tax for general revenue purposes of the privilege of doing business as herein defined in Upper Merion Township, Montgomery County, Pennsylvania, as follows:

Rate and basis of tax.

Every person engaging in a business in the Township shall pay an annual business privilege tax on gross receipts for each tax year at the rate of one and one-half (11/2) mills.

Every wholesale dealer or vendor engaging in business in the Township shall pay an annual business privilege tax on gross receipts at the rate of one-half (1/2) mill and shall not be subject to Subsection A(1)(a) above. All nonwholesale business of such wholesale dealers or wholesale vendors shall be taxed at the general rate of one and one-half (11/2) mills.

(Reserved)[1]

[1]

Editor's Note: Former Subsection A(1)(c), regarding crediting of the registration fee, was repealed 4-12-2012 by Ord. No. 2012-805.

(d)

Rate when the same tax is imposed by two taxing bodies. If any person is liable for the same tax on the same subject imposed under the Local Tax Enabling Act, 1965, December 31, P.L. 1257,[2] and its amendments, to the Township and one or more political subdivisions of the state, then and in that event the tax shall be apportioned by such political subdivisions but in no event shall the combined taxes of both subdivisions exceed a maximum rate of tax as fixed by said Enabling Act permitting the imposition of such taxes.

[2]

Editor's Note: See 53 P.S. § 6901 et seq.

Gross receipts. Computation of estimated and actual gross receipts shall be made in the following manner:

Any taxpayer who has commenced business at least a full year prior to January 1 of that tax year shall compute estimated gross receipts based upon the taxpayer's actual gross receipts during the 12 months preceding such January 1.

Any taxpayer who has commenced business less than one full year prior to January 1 of that tax year shall compute estimated gross receipts by multiplying by 12 the monthly average of such person's actual gross receipts during the months while engaged in business prior to such January 1.

Any taxpayer who commences business subsequent to January 1 of that tax year shall compute gross receipts for that tax year by multiplying such person's actual gross volume of business for the first month of business by the number of months remaining in the tax year and by seasonally adjusting such figure for volume of business.

(3)

Determination of gross receipts. Gross receipts upon which the tax hereunder is computed shall include the gross consideration credited or received for or on account of sales made, rentals and/or services rendered, subject only to the following allowable deductions and exemptions:

Refunds, credits or allowances given by a taxpayer to a purchaser on account of defects in goods, wares or merchandise sold or on account of goods, wares or merchandise returned.

Any commissions paid by a broker to another broker on account of a purchase or sales contract initiated, executed or cleared with such other broker.

Bad debts, where the deduction is also taken in the same year for federal income taxation purposes.

(d)

Taxes collected as agent for the United States of America, Commonwealth of Pennsylvania or Upper Merion Township.

Exemptions.

Persons employed for a wage or salary, nonprofit corporations or associations organized solely for religious, charitable or educational purposes and not conducting any regular or established business competing commercially with any person subject to the tax imposed by this article, provided that such exempt or nonprofit corporation or entity is also exempt from income tax under the Internal Revenue Code of 1954, as amended, agencies of the government of the United States or of the Commonwealth of Pennsylvania; and the business of any political subdivision or of any authority created organized under and pursuant to any act of assembly are exempt from the provisions of this article.

No such tax shall be assessed and collected on a privilege, transaction, subject or occupation which is subject to a state tax or license fee and which tax or license fee has been held by the courts of Pennsylvania to be the basis for exemption from the imposition of a business privilege tax by a municipality.

(3)

No such tax shall be assessed and collected on the gross receipts from utility service of any person or company whose rates of service are fixed and regulated by the Pennsylvania Public Utility Commission or on any public utility service rendered by any such person or company or on any privilege or transaction involving the rendering of any such public utility service.

(4)

No such tax shall be assessed and collected on the privilege of employing such tangible property as is subject to a state tax, except on sales of admission to places of amusement or on sales or other transfers of title or possession of property.

(5)

Any other person exempt by law from the imposition of this tax shall be exempt from the provisions of this article.

(6)

Any person subject to the payment of the Itinerant Merchant Business Privilege Tax and Licensing Ordinance set forth in Article V below.

Partial exemptions. Where gross receipts in their entirety cannot be subjected to the tax imposed by this article by reason of the provisions of the Constitution of the United States or any other provision of law, the Business Tax Receiver, with the approval of the Township, shall establish rules and regulations and methods of allocation and evaluation so that only partial gross receipts properly attributable and allowable to doing business in the Township shall be taxed hereunder.

§ 149-39 Returns to be made.

[Amended 6-15-1987 by Ord. No. 87-518; 1-9-1989 by Ord. No. 89-551; 2-18-1993 by Ord. No. 93-608]

Every return and estimated return shall be made upon a form furnished by the Business Tax Receiver. Each separate individual or business entity shall file a separate return on a separate form, and each such return shall show the gross receipts for that individual or business entity only. Every person making a return shall certify the correctness thereof by affidavit under penalties of perjury and criminal prosecution. Each return shall be documented by appropriate schedule to verify its accuracy.

Every person subject to the tax imposed by this article who has commenced business at least one full year prior to the beginning of the tax year shall, on or before the 15th day of April following, file with the Business Tax Receiver a return setting forth such person's name, business and business address and such other information as may be necessary to compute the actual gross receipts of such person during the preceding year and the amount of tax estimated to be due for the current year.

Every person subject to the tax imposed by this article who has commenced business less than one full year prior to the beginning of the tax year shall, on or before the 15th day of April following, file with the Business Tax Receiver a return setting forth such person's name, business and business address and such other information as may be necessary to compute the actual gross receipts of such person during the preceding year and the amount of tax estimated to be due for the current year.

Every person subject to the tax imposed by this article who commences business subsequent to the beginning of the tax year shall, within 60 days from the date of commencing such business, file with the Business Tax Receiver a return setting forth such person's name, business and business address and such other information as may be necessary to compute the actual gross receipts of such person during the first month of business and the amount of tax estimated to be due for the current year.

Any taxpayer going out of or ceasing to do business shall, within 14 days from the date of ceasing to do business, file a return showing the actual gross receipts by such taxpayer during that tax year in which said taxpayer ceased doing business and pay the tax due as computed thereon at the rate herein provided for at the time of filing said return. If such tax has been previously paid based upon estimated gross receipts, the taxpayer shall be entitled to a refund, without interest, of any excess tax paid for the tax year in which business was terminated.

Receipt. The Business Tax Receiver shall provide a receipt to the person paying the tax. The receipt shall indicate the amount received and the manner in which the amount was applied to interest, penalties and taxes due.

§ 149-40 Due date; penalty for late payment.

[Amended 1-9-1989 by Ord. No. 89-551; 2-18-1993 by Ord. No. 93-608]

The business privilege tax levied for each tax year pursuant to this article shall be due and payable, together with the return, on the date on which the taxpayer is required to file a return as set forth in § 149-39, and said business privilege tax shall be paid on said date. Each separate individual or business entity shall pay said estimated business privilege tax separately. If the same is not paid on said date, a penalty of 10% of tax due shall be added thereto, plus interest of one and one-fourth percent (11/4%) of the tax due for each month or fractional part thereof from the day it is due and payable until paid. If the estimated tax is paid on said due date but the amount of said estimated tax is less than 80% of the total tax due upon the final computation of tax due provided in § 149-41, a penalty of 10% of the tax that was not paid with the estimated tax shall be added to the final tax due with final return under §§ 149-40B and 149-41, and said penalty shall be paid with said final return.

The final payment of business privilege tax levied pursuant to this article shall be due and payable and shall be paid on the date on which each separate taxpayer is required to file a final return as set forth in § 149-41 and shall be paid with said final return. If the same is not paid with the final return and on said date, a penalty of 10% of tax due shall be added thereto, plus interest of one and one-fourth percent (11/4%) of tax due for each month or fractional part thereof from the day it is due and payable until paid.

The Business Tax Receiver is not authorized to grant extensions of time in which to make payment of tax or estimated tax due as provided herein or to waive or abate the penalty or interest due thereon.

§ 149-41 Final tax return.

[Amended 2-18-1993 by Ord. No. 93-608]

On or before April 15 of each year, every person subject to the tax hereby imposed shall make a final return to the Business Tax Receiver, showing the actual gross receipts during the preceding tax year. Such final return shall state the amount of gross receipts as set forth in the first tax return required in § 149-39, Returns to be made, the amount of tax paid at the time of filing the first tax return and the amount of tax due upon the final computation. Each final return shall be documented by appropriate schedule to verify the accuracy thereto.

§ 149-42 Duties of Business Tax Receiver.

[Amended 6-15-1987 by Ord. No. 87-518; 12-31-1991 by Ord. No. 91-593; 2-18-1993 by Ord. No. 93-608]

The Business Tax Receiver shall receive payment of the taxes, interest, penalties and civil penalties imposed by this article as well as costs of suit and legal fees received, collected or recovered under this article. It shall be his duty to keep a record showing the amount received by him from each taxpayer and the date of such payment and to provide a report of this information monthly to the Board of Supervisors. When crediting any payment that is less than the total amount of interest, penalties and tax due, the Tax Administrator shall first apply any sum received to outstanding interest, then to any outstanding penalties, and any remaining amounts received shall be applied to taxes due.

The Business Tax Receiver and his duly appointed deputies shall recommend to the Board of Supervisors of Upper Merion Township rules and regulations relating to any matter pertaining to the collection, administration and enforcement of this article, including provision for the examination and correction of returns and payments alleged or found to be incorrect or as to which an overpayment is claimed or found to have occurred, and are charged with enforcing the provisions of this article and any rules and/or regulations promulgated pursuant hereto.

If no return is filed or if the Business Tax Receiver is not satisfied with the return and payment of tax required under the provisions of this article, the Business Tax Receiver is hereby authorized and empowered to prepare and send by certified or registered mail a notice of proposed deficiency as well as penalties and interest assessed, to the taxpayer's last known address, based upon the facts contained in the return or upon such information and belief as is available to the Business Tax Receiver. For this purpose, the Business Tax Receiver or the deputy or authorized agent of the Business Tax Receiver is authorized to request, examine and obtain from any person legible copies of the books, papers, records and federal and state income tax returns of such person reasonably necessary to verify the accuracy of any return required to be made under the provisions hereof. The taxpayer shall have 30 days from the date of such notice of proposed deficiency in which to answer the Business Tax Receiver's notice of proposed deficiency.

Upon receipt of the taxpayer's answer or if any person shall neglect, fail or refuse to answer the Business Tax Receiver's notice of proposed deficiency, then the Business Tax Receiver may prepare such returns and assess and levy the tax, interest and penalty due as provided herein. The Business Tax Receiver shall then submit such return to the taxpayer at his last known address for signature, which may then be received by the Business Tax Receiver as the return of such person, and an assessment may be entered on the basis of such return.

If any person fails to sign any return prepared by the Business Tax Receiver or fails to complete and sign any return required by law hereunder at the time prescribed thereof or makes, willfully or otherwise, a false, incorrect or fraudulent return, the Business Tax Receiver shall make such return from the knowledge and information available to him, and when subscribed by the Business Tax Receiver on behalf of the taxpayer, the amount of tax due may be entered on the assessment roll and may thereafter be collected as provided in this article.

Any returns so submitted and subscribed as provided herein shall be prima facie good and sufficient for all legal purposes, and the taxpayer shall have the burden of proof in any legal proceeding to rebut by clear and convincing evidence the Business Tax Receiver's assessment.

The Business Tax Receiver is hereby authorized to accept payment under the protest of the amount of business privilege tax claimed by the Township in any case where the taxpayer disputes the validity or amount of the Township's claim for tax. If the final return of the taxpayer shows an overpayment of the tax by reason of the fact that the gross receipts as stated in the estimated computation were more than the actual gross receipts of the taxpayer for the year or by reason of the fact that the taxpayer did not continue to engage in business throughout the year, the Business Tax Receiver shall petition the Township for a refund to the taxpayer of the amount of such overpayment, which shall be the difference between the amount of tax, interest and penalties paid upon the filing of the first return and the amount of the tax, interest and penalties finally shown to be due.

Any information contained on the returns of a taxpayer and any information obtained as a result of the examination of the books and records of the taxpayer shall be confidential except for official purposes, for purposes of pursuing the judicial remedies available to the Business Tax Receiver, and except in accordance with proper judicial order or as otherwise provided by law. The information on the license application shall be a public record.

The Business Tax Receiver may enter into such agreements, compacts or covenants with any other authorities of other political subdivisions of the Commonwealth of Pennsylvania or with the Secretary of the Treasury of the United States for access to tax returns of persons considered by the Business Tax Receiver to be engaged in a business, trade, occupation or profession within the limits of the Township.

The Business Tax Receiver or his deputies are hereby authorized to examine the records of any taxpayer or supposed taxpayer in order to verify the accuracy of the return made or, if no return was made, ascertain the tax due.

Any person aggrieved by any decision of the Business Tax Receiver shall have the right to appeal to the Court of Common Pleas, as in other cases.

§ 149-43 Duties of taxpayer.

[Amended 6-15-1987 by Ord. No. 87-518; 2-18-1993 by Ord. No. 93-608]

The burden of proof shall be on any person claiming not to be engaged in carrying on a business, trade, occupation or profession within the limits of the Township or claiming any exemption from the provisions of this article or denying liability for the tax imposed hereunder unless such person demonstrates by clear and convincing evidence he is not liable for the tax assessed by the Business Tax Receiver pursuant to the provisions of this article.

All persons, whether or not having an office in the Township but engaged in carrying on any business, trade, occupation or profession within the limits of the Township, shall keep adequate written records of the transaction involved to support any claim that the situs of the transaction is not allocable to the limits of the Township. Absent such records. the taxpayer shall be deemed not to have competent and adequate records to support an exclusion from taxation hereunder.

Records.

The taxpayer shall maintain such records as will enable him to make a true and accurate return in accordance with the provisions of this article. Such accounts and records must disclose in detail the gross receipts and other data pertaining thereto and must be sufficiently complete to enable the Business Tax Receiver to verify all transactions.