This article shall be known and may be cited
as the "Earned Income and Net Profits Tax Code," herein referred to
as the "code."
The following terms, words or phrases as used
in this article shall have the meanings set forth below unless the
context clearly indicates a different meaning:
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 a person lives and has his or her permanent
home and to which he or she has the intention of returning whenever
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 voluntary fixed
place of habitation of a person, not for a mere special or limited
purpose but with the present intention of making a permanent home,
until some event occurs to induce him or her to adopt some other 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, disability or retirement or
payments arising under worker'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 or payments commonly known as "public assistance" or "unemployment
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.
EMPLOYEE
Any person who renders service to another for consideration
and who is under the control of the employer, including temporary,
provisional, casual or part-time employment.
EMPLOYER
A person, partnership, association, corporation, institution,
governmental body or unit or agency or any other entity employing
one or more persons for salary, wage, commission or other compensation.
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 Borough of Tarentum.
RESIDENT
A person, partnership, association or other entity having
a domicile in the Borough.
TAXPAYER
A person, partnership, association or other entity required
hereunder to file a return of earned income or net profits or to pay
a tax thereon.
If any return or payment is due on a weekend
or national or state holiday, such return or payment shall be considered
timely if postmarked the first business day immediately thereafter.
Any return or payment shall be considered timely if postmarked on
or before 12:00 noon on the due date as provided herein.
Every employer, as hereinbefore described and
defined, shall be obligated from January 1, and thereafter so long
as this article is in effect, to withhold from wages of employees
subject to the tax imposed by this article the amount of earned income
tax due, in accordance with the withholding procedures set forth hereinafter.
Every employer having an office, factory, workshop,
branch, warehouse or other place of business within the Borough of
Tarentum who employs one or more persons, other than domestic servants,
for salary, wage, commission or other compensation, who has not previously
registered, shall, within 15 days after becoming an employer, register
with the Tax Collector his name and address, the name and form of
entity to which such business is conducted and such other information
as the Tax Collector may require in order to administer and collect
the tax herein imposed.
Every employer having an office, factory, workshop,
branch, warehouse or other place of business within the Borough, who
employs one or more persons, other than domestic servants, for salary,
wages, commission or other compensation, shall deduct at the time
of payment thereof the tax imposed by this article from 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 Tax Officer the amount of earned income taxes deducted
during the preceding 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. Such returns shall
show the name and social security number or tax identification number
of each such employee, the earned income of such employee during such
preceding three-month period, the earned income tax deducted therefrom,
the street address of the employee and the Borough where he resides,
the political subdivision imposing such earned income tax, the total
earned income of all such employees during the preceding three-month
collection period and the total earned income tax deducted therefrom.
Any employer who, for two of the preceding four
reporting 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
Borough may be required by the Tax Officer to file his return and
pay the tax monthly. In such cases, payments of tax shall be made
to the Tax Officer on or before the last day of the month succeeding
the month for which the tax was withheld.
On or before February 28 of the succeeding year,
every employer shall file with the Tax Officer:
A. An annual return showing the total amount of earned
income deducted, the total amount of tax paid to the Tax Officer for
the period beginning January 1 of the current year and ending December
31 of the current year.
B. A withholding statement for each employee employed
during all or 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, social security number, the amount of earned
income paid to the employee during said period, the amount of tax
deducted, the political subdivisions imposing the tax upon such employee
and the amount of tax paid to the Tax Officer. Every employer shall
furnish at least two copies of the withholding statement to the employee
for whom it is filed.
Every employer who discontinues business for
any reason on or prior to December 31 of the current year shall, within
30 days after the discontinuance of business, file the returns and
withholding statement hereinabove required and pay the tax due.
Every employer or responsible officer of such
employer who willfully or negligently fails or omits to make the deductions
required by this section and who fails to remit the earned income
taxes withheld shall be personally liable, as a fiduciary, in an amount
equal to 100% of the taxes which he was required to deduct and withhold
under this article. The term "responsible officer" shall include any
person who would be a responsible officer for purposes of remitting
federal income tax withholding at the source to the federal government.
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 as to the filing of declarations and returns.
Credit for payment of a tax like the tax imposed by §
225-18 of this article to other political subdivisions of the Commonwealth of Pennsylvania (except for a like tax paid to the School District of Tarentum Borough coterminous with the Borough) or to any political subdivision located outside the boundaries of the commonwealth shall be allowed in accordance with Section 14 of the Local Tax Enabling Act.
This article has been enacted under the authority
of the Local Tax Enabling Act.