[Adopted 9-28-1981 by Ord. No. 292 (Ch.
II, Art. 3, of the 1976 Ordinance Book)]
As used in this article, the following terms
shall have the meanings indicated:
The Township of Middletown.
A.
General. Generally, receipts will be considered allocable
to the place of business in the taxing district if any significant
aspect of the transaction arises out of the place of business located
in the taxing district.
B.
Lessors of tangible personal property. Persons doing
business within the taxing district who own and hold title to tangible
personal property which is leased to others are required to report
the gross receipts from the rental of or license to use such property
according to the following rules:
(1)
Where the original situs of the property is within
the taxing district, the receipts from tangible personal property
leased to others are deemed to be:
(2)
Where the original situs of the property is outside
Pennsylvania, the receipts from tangible personal property leased
to others are deemed to be:
(a)
Allocable receipts, if the property is delivered
to lessee within the taxing district.
(b)
Nonallocable and nontaxable receipts, if the
property is delivered to lessees outside the taxing district within
or without the United States.
(c)
The term "original situs," as used herein, means
the place at which the property is warehoused when not leased to others
and to which place the property is returned upon termination of the
lease. Where there is no such established place, the term "original
situs" shall mean the principal office of the taxpayer.
(d)
This subsection does not apply to conditional
sales of tangible, personal property.
C.
Lessors of real property. Persons doing business within
the taxing district who own and hold title to real property which
is leased to others are required to report the gross receipts from
the rental of all such property which is situated in the taxing district.
This subsection does not apply to conditional sales of real property.
Where a lessor has no more than two rental units in his principal
place of residence such rentals are excluded from taxable receipts,
provided he has no other rental units of realty located within the
taxing district.
D.
Place of origin and delivery outside of the taxing
district. Where the place of origin of goods, wares and merchandise
in a sales transaction is a location owned or leased by the seller
outside of the taxing district and the place of delivery is a location
outside of the taxing district regularly maintained by the other party
to the transaction, the receipts are nonallocable and nontaxable.
E.
Location of vendee. Receipts from the sale of goods,
wares and merchandise delivered to a vendee located outside of the
taxing district by an employee of the taxpayer who works in or from,
or is attached to the taxing district place of business of the taxpayer,
is fully taxable if the vendee is located within Pennsylvania and
nontaxable if the vendee and place of delivery is located outside
of Pennsylvania.
A.
Whether or not a person carries on a taxable activity
within the meaning of the Business Privilege and/or Mercantile Tax
Act is essentially a question of fact. In general, taxable activity
includes any trade, business, profession, vocation or commercial activity
that is carried on in the taxing district. The tax is imposed on any
person who exercises the privilege of carrying on certain activities
in the taxing district and on any wholesale or retail vendor in goods,
wares or merchandise, and is measured by receipts received.
(1)
Inter- and intrastate business. Doing business includes
any trade, business, profession, vocation or commercial activity of
an intrastate or interstate character.
(2)
Residence or domicile. A person who engages in a taxable
activity in the taxing district is subject to this tax whether or
not he is a resident and whether or not he has a permanent place of
business in the taxing district.
(3)
Foreign corporation. A foreign corporation is subject
to this tax if it carries on a taxable activity in the taxing district
whether or not it is licensed to do business in Pennsylvania.
A.
General. Receipts from transactions involving more
than one state are not exempt from tax, but are to be included in
the tax base either in their entirety or excluded in their entirety
as provided in these regulations. Transactions defined below as interstate
commerce are exempt from the tax. Those which do not constitute interstate
commerce are taxable in full.
B.
What constitutes "interstate commerce"? Transactions
will be deemed to involve interstate commerce only when they directly
involve the sale, exchange or transportation of commodities between
the states, the transportation of passengers between states, or the
transmission of intelligence or communications between the states.
The citizenship or residence of the parties to the transaction is
of no significance. Where a sale transaction is involved, it is of
no importance in which state title to the goods passes, or whether
the goods are shipped FOB one state or another.
C.
Sale and delivery in Pennsylvania. Interstate commerce
is not deemed to be involved in sales made by a taxing district seller
to customers located outside of Pennsylvania where the property is
delivered directly to the purchaser or his agent within Pennsylvania,
notwithstanding the fact that the purchaser or his agent intends to,
and later does, transport the property to a point outside Pennsylvania.
D.
Shipment from taxing district by seller. Sales will
be considered as having been made in interstate commerce when the
seller, as a necessary incident to the contract of sale, agrees to,
and does, deliver the property to the purchaser at a point outside
of Pennsylvania, or delivers the property to a common carrier consigned
to the purchaser at a point outside Pennsylvania.
E.
Shipment into the taxing district from seller's out-of-state
place of business. With respect to sales made by a taxing district
seller, the transaction will be considered to be one in interstate
commerce. If, by the express terms of the contract of sale, or the
established practice of doing business, the seller is required to
deliver by transporting or shipping the property from his place of
business situated outside of Pennsylvania directly to the purchaser
at a point within the taxing district.
F.
Shipments into the taxing district from a third party's
out-of-state place of business. Interstate commerce is not deemed
to be involved if the taxing district seller causes direct delivery
to be made to the purchaser at a point in the taxing district from
an out-of-state source of supply owned or operated by a third party
(one from whom the seller buys).
G.
Delivery from the seller's out-of-state place of business
via his office. Interstate commerce is not deemed to be involved with
respect to sales made to a Pennsylvania purchaser if the property
is shipped from the seller's place of business located outside of
Pennsylvania to the seller's place of business in the taxing district
from which point the goods are delivered to the purchaser.
A.
Contractors with field offices. Taxing district contractors
or subcontractors engaged in the performance of building and construction
contracts as a point outside the territorial limits of the taxing
district may exclude from the measure of the tax the receipts derived
therefrom, provided that a field office was maintained on the premises
of the project during the performance of the contract to such an extent
as to constitute doing local business at the situs of the job.
B.
Alterations and repairs. The provisions of this section
apply only to contractors engaged either in the erection of new buildings
or in the complete alteration and remodeling of old buildings. They
do not apply to contractors who engage in alteration and repair jobs
of a limited scope, such as a roofer repairing a damaged roof of a
building situated outside the taxing district, or a painter renovating
an apartment in an apartment house located outside the taxing district.
C.
Engineers and technicians. The exemption provisions
of this section do not apply to engineers and other technicians rendering
personal services outside the taxing district.
D.
Qualifications for exemptions. To qualify hereunder,
the contractor must show that he established a place of business at
the situs of the job by setting up a field office thereat with machinery
and equipment for use in the fulfillment of the contract, and performed
such other act as to constitute doing local business at the situs
of the job.
A.
Where a general agent or broker of an insurance, real
estate, or other firm maintains a branch office outside of the taxing
district, the commissions attributable to such branch office may be
excluded from gross receipts. If any significant aspect of the transaction
occurs in the taxing district as a result from the efforts of brokers,
subagents or employees who work in, or from, or are attached to the
taxing district, such commissions shall be included in gross receipts.
A.
Nonprofit corporations or associations, religious,
charitable and educational institutions, persons, entities, transactions
and other matter exempted by the provisions of the act or other applicable
law. Business income not excluded. The exclusion from taxation of
receipts from the business of nonprofit religious, charitable or educational
organizations is limited to those receipts derived from activities
which are connected with the noncommercial operations of the organization.
Commercial activities carried on by such an organization are taxable.
All business income of nonprofit religious charitable and educational
organizations is taxable.
B.
Receipts from sales to governmental agencies and nonprofit
organizations. Sales to institutions, receipts from sales made or
services rendered to governmental bodies, and to religious charitable
and educational corporations and associations shall not be excluded
from the tax base. The statute does not grant any exemption to taxpayers
transacting business with such agencies or institutions.
A.
Nominal or registration fees. The fact that a taxpayer
receives a certificate or other document which is designated a "license"
from the Commonwealth of Pennsylvania for which the taxpayer pays
a sum of money does not exempt the taxpayer from the business privilege
and/or mercantile tax. Flat annual fees, fees which are not related
to gross income or amount of production, or fees that are nominal
in nature are not considered true license fees and hence, payment
of such fees will not exempt the taxpayer from the business privilege
and/or mercantile tax.
B.
Payment to the taxing district for housing permits,
building and plumbing permits, etc. will not exempt the taxpayer from
the business privilege and/or mercantile tax.
C.
Nonlicensed functions taxable. The reports of any
person who falls within the state tax or license fee exemption which
are derived from any activity which if conducted separate and apart
from other business activities would be subject to the state tax or
license fee shall not be excluded from the tax base.
D.
Local tax under state authority. Local taxes by counties,
municipalities or other public bodies though authorized by state legislation
are not considered state taxes or license fees.
E.
Monies returned to municipalities by the state. Any
tax which is collected by the state but which, with the exception
of administrative costs, is returned to the municipalities, is not
considered a state tax or license fee. Such taxes include, but are
not limited to:
A.
Nonutility functions taxable. The receipts of any
public utility, operating under the rules and regulations of the Pennsylvania
Public Utility Commission, derived from supplying services at rates
specified in its tariffs shall be excluded from the tax base. Public
utilities shall not exclude from their tax base receipts derived from
sales of appliances, equipment, advertising, etc. A contract carrier
is not a public utility.
A.
"Gross receipts" means gross consideration received
in, or by reason of, any sale made, or services rendered or commercial
or business transaction occurring in or attributable to the taxing
district including cash, credits, and property of any kind of nature
without deduction on account of the cost of materials, labor, services,
or other costs, interest or discount paid, or any other expenses whatsoever.
B.
In general, the word "sale" is used in the definition
of the term "gross receipts" includes, but is not limited to any transfer
of title for a consideration. It includes exchange, barter, and bailments.
A.
Generally, real estate brokers and agents are required to report as taxable receipts the commissions and fees received for services rendered as agent in promoting the purchase and sale of real property for others. Brokers and agents not having an office in the taxing district shall report as taxable receipts commissions received on the sale of properties within the taxing district. Such amount does not include the gross selling price of property, except as set forth in Subsection C.
B.
Deduction of shared fee. A real estate broker, or
agent may exclude from his tax base, any commissions paid by him to
another broker, or agent, on account of a contract or purchase or
sale initiated, executed, or cleared in conjunction with the broker,
salesman or agent to whom the commission or part of the commission
is paid. Commissions paid to a salesman by a broker or agent when
the salesman is affiliated with the broker or agent are not excludable
from the broker's or agent's tax base.
C.
Broker's sale of owned property. If a person is in
the business of taking title to real property and selling the property,
he is required to include the gross selling price of the property
taxable receipts. The same person may be taxed both as a broker and
as a seller, depending on the nature of the transactions. If he acts
as a broker, salesman or agent, his tax is based on commissions.
D.
If he buys and sells real estate, whether in his own
name or in the name of a straw party, he is taxed on the gross selling
price of the real estate.
A.
Reimbursement of traveling expenses excluded from
gross receipts only if the taxpayer incurred such traveling expenses
as agent for another from whom the taxpayer receives reimbursement
for such expenses.
A.
Deductions allowed. Trade discounts allowed to customers
may be deducted from the gross amount charged in ascertaining the
amount to be reported as receipts from sales. Trade discounts include:
(1)
Discounts deducted from the face amount of the bill
as a method of adjusting the list price.
(2)
Discounts unconditionally deducted by customers at
settlement of their bills and allowed as a matter of established custom
of the trade without regard to the due date of such bills or the form
or terms in which such discounts are described or stated on bills.
A.
Deductions allowed. Discounts allowed to customers
as cash discounts for prompt payment of their bills may be deducted
from gross receipts.
A.
If seller contracts to deliver. If the seller contracts
to deliver the property sold to some designated place, or is obligated
under the terms of the contract to pay transportation charges to some
designated place, the transportation services are rendered to the
seller and the freight, delivery or other transportation charges so
incurred by the seller may not be deducted from gross receipts.
B.
If buyer deducts cost of delivery from payment. If
property is sold on terms requiring the seller to deliver such property
to a designated place but the purchaser pays the amount of freight,
delivery or other transportation charged in the first instance, and
deducts such charges from the invoice price in making remittance to
the seller, no deduction from gross receipts may be taken therefor
by the seller.
C.
If seller advances charges. Where the seller advances
the freight, delivery or other transportation charges for the account
of the purchaser in accordance with the terms of the contract of sale,
such charges may be excluded from the gross receipts of the seller,
provided:
A.
General. Receipts from sales made, or services rendered,
by an agent for the account of his principal are to be reported by
the principal. It is immaterial in such cases whether the customer
or client remits directly to the principal, or to the agent for transmittal
to the principal. The agent is required to report as gross receipts
only the commission withheld by him as compensation for his services
before remitting to his principal and any commission paid to him after
remitting to his principal. No deduction from gross receipts may be
taken by the principal for commission paid to, or withheld by, the
agent. A manufacturer's representative is taxable on his gross commissions
unless his relationship to his principal is that of employer and employee.
This relationship of employer and employee exists if the principal
pays social security and unemployment compensation taxes on behalf
of the person claiming exemption and if, in the event of an accident
in the course of unemployment, the manufacturer's representative might
become entitled to workmen's compensation.
B.
Undisclosed principal. A person selling property,
including real property or rendering services for an unknown or undisclosed
principal, is subject to tax as a principal unless there is disclosed
in the agent's return the identity of the principal and the amount
of the sale made on his behalf.
C.
Condition as to recognition of agency. A person will
be regarded as acting as agent or broker in promoting or soliciting
sales or rendering services for the account of a principal when it
appears:
(1)
That the contract or agreement between such persons
clearly establishes the relationship of principal and agent;
(2)
That the books and records of the agent or broker
show the name of the actual owner of the property on whose behalf
the sale is made;
(3)
That the books and records of the agent or broker
show the amount of gross sales and the amounts of commission due thereon.
D.
Collection by agent. Money or property received by
a taxpayer, as agent, for transmittal to a third party is not to be
reported by such taxpayer as gross receipts, but any commission received
by him for his services as agent must be included in gross receipts.
E.
This section shall apply to advertising agencies,
public relations, and any other service business which meets the agency
criteria.
A.
Reported as cash sales. A person making conditional
sales or other installment sales of property is required to report
the total selling price of such sales as gross receipts for the tax
year in which the contracts of sale are entered into, without regard
to the fact that the seller may arrange to receive payment from the
purchaser on an installment basis or that such contracts may be discounted
or pledged with, or sold to, a finance company.
B.
Property repossessed. Where tangible personal property,
sold under a conditional or other installment sales contract, is repossessed
by the seller, and the repossessed property is subsequently sold,
the receipts from such sales are to be included in the measure of
the tax only to the extent that the amount of the sale exceeds the
balance due on the original sale at the time of repossession. No deduction
from gross receipts may be taken for any unpaid balance due at the
time of repossession. Such deduction shall be allowed upon resale,
if the resale price is less than the unpaid balance.
Where dealers engaged in similar lines of business
exchange articles of tangible personal property and one of them makes
payment to the other in addition to the property exchanged by him,
the transactions constitute sales to each other. The receipt of each
dealer is measured by the gross value of the consideration received
by him. Where a dealer transfers property, such as an automobile,
to another dealer with the understanding that property of identical
description will be returned at a subsequent date, such transaction
does not constitute a sale and the value of the property exchanged
need not be included in the gross receipts of either dealer. Receipts
by dealers from sales to other dealers in the same line where the
dealer transfers title or possession at the same price for which he
acquired the merchandise may be excluded from gross receipts.
A.
Return by lessor. Where a person leases a department
of his business to another, such person may include in his return
the gross receipts from business done and sales made by lessee. When
the business of such leased department is included in the return made
by the lessor, a schedule must be attached to the return containing
the name of the lessee, a description of the department operated,
and a statement to the effect that the lessor assumes liability for
reporting the gross receipts and paying the tax accruing against the
lessee of such department. The lessee, however, is not relieved from
his liability for business privilege taxes if the lessor fails to
make a proper return or fails to pay the tax due. Should a change
occur in the ownership or status of any leased department, the lessor
shall notify the Collector of Taxes promptly.
B.
Return by lessee. If the lessee wishes to file returns
independently, such lessee is required to include in his return the
entire gross receipts of said lessee whether collected by the lessor,
or the lessee without deducting any expense or commissions charged
to him by the lessor. To expedite the examination and audit of returns
filed by such lessee, the Collector of Taxes may require the lessor
to furnish a statement of the entire gross receipts collected on behalf
of the lessee.
A.
General. A contractor or subcontractor, resident or
nonresident, engaged in the business of erecting buildings, or otherwise
altering, repairing or improving real property, or other major construction
work, is required to report as gross receipts all receipts derived
from the performance of such contract. The amount of receipts to be
included in the tax base shall be the full contract price, that is,
the total amount received or receivable by way of a fixed or determinable
amount under the terms of the contract. The contract price will be
considered to include all charges made by a contractor, or subcontractor,
for materials, labor, supervision, overhead costs, and profit. In
the case of the general contractor, prime contractor or subcontractor
employing lower-tier subcontractors, no deduction may be made with
respect to amounts paid to subcontractors and materialmen, unless
it can be shown that the subcontractor has paid the business privilege
tax to the taxing district on the same gross receipts stemming from
the same contract.
B.
Cost-plus contracts. A general contractor performing
contracts on the basis of a "cost-plus-a-fixed-fee" or "cost-plus-a-percentage"
is required to report as gross receipts the full contract price as
explained above, unless he has no connection whatsoever with the purchase
of materials and/or the hiring of labor. In cases where the owner
of the property buys the materials and hires all labor in his own
name and pays the general contractor a fixed fee, or a percentage
of the total cost to supervise and direct the construction project,
the general contractor will be required to report only the gross amount
of the fee or percentage received. Where the owner authorizes the
general contractor to make for him such purchases of tangible personal
property, or hire such labor or engage such subcontractors as are
necessary for the performance of the contract and pledges his credit
and is liable in the first instance to the materialmen, suppliers,
laborers or subcontractors, as distinguished from merely guaranteeing
payment of them or undertaking to reimburse the general contractor
for the cost of such materials, services or subcontracts, and agrees
to make payment directly to the materialmen, suppliers, laborers and
subcontractors, such sales or services will be regarded as made directly
to the owner, and the general contractor will not be required to include
such items in his gross receipts.
C.
Contractors or subcontractors permanently or temporarily
doing business in the taxing district shall register and file a tax
return. (General contractors are required to withhold final payment
to subcontractors, temporarily doing business in the taxing district,
until proof of payment of the tax is furnished to them by such contractors.)
D.
Contractors or subcontractors with an office in the
taxing district who are engaged in the performance of building, construction
or engineering contracts at a point outside the territorial limits
of the taxing district may exclude from the measure of the tax the
gross receipts derived therefrom, provided that a bona fide field
office was maintained on the premises of the project during the performance
of the contract wherein all control over such project was exercised
to the extent that it constituted the doing of local business at the
situs of the job. Receipts for services performed outside the taxing
district may also be excluded if it can be shown that no part of the
service was performed in the taxing district.
Persons engaged in business in the taxing district
as contractors who repair, alter and improve tangible personal property
for the account of others are subject to tax under the provisions
of this article. When contractors perform labor or services on articles
of tangible personal property furnished by the other party to the
contract, such contractors are required to report only the amount
due them for labor or services rendered.
A.
Persons operating hotels, apartment houses, boarding
houses, nursing homes, rooming houses and all other such establishments
are taxable on receipts from renting of rooms, furnishing of meals
and any other services rendered.
B.
Any person carrying on the business of renting buildings,
offices, space, stores, dwelling houses, etc., shall include gross
rentals received in the tax base. No deductions may be made for depreciation,
cost of maintenance, repairs, etc.
(1)
Persons who have obtained real property with no affirmative
action on their parts, that is, fortuitously through inheritance,
gift, reverter, or other legal processes, and who furnish only those
elementary services and maintenance which are required by law, are
not subject to the tax unless the property was received from a person
who engaged in the business of renting the property and that business
is continued by the recipient.
(2)
Business corporations which hold rental property as
a source of income in addition to their regular business, which may
or may not be real estate, are subject to the tax whether or not services
are rendered.
(3)
Persons, corporations or partnerships holding rental
property in the taxing district, who employ rental agents or other
such assistance in administering such property are doing business
and are subject to the tax whether or not they provide services.
(4)
Agencies or entities which manage and/or operate cooperatives
and/or condominiums must pay the tax based on all receipts received
for maintenance, cleaning, and other service provided, including insurance.
Receipts received from owner-tenants for taxes, interest and principal
payments may be excluded from the taxable gross receipts.
A.
General agents. General agents for insurance companies
are required to report as gross receipts the entire commissions received
as compensation for their own efforts on policies sold by them directly
and the overriding commissions received by them upon business produced
by brokers or subagents.
B.
Brokers or subagents. Brokers or subagents are required
to report as gross receipts the commissions received as compensation
for their service.
C.
Employee of single company. A person who represents
a single insurance company is subject to tax hereunder unless he:
(1)
Devotes his entire time to the company,
(2)
Is considered by the company to be its employee, and
the company pays social security and unemployment compensation taxes
on behalf of the person claiming the exemption and in the event of
an accident in the course of employment, said person is entitled to
workmen's compensation; and
(3)
Does not employ solicitors, subagents, or other persons
to whom he pays salaries, commissions or other compensation in connection
with insurance business solicited.
Administrative or executive offices. Receipts
of a taxpayer whose only office in the taxing district is an administrative
or executive office may or may not be taxable depending on the activity
performed in the office. The general rule is that receipts for services
will not be taxable in the taxing district if no part of the service
is performed in the taxing district. If the activity at such an office
relates only to internal bookkeeping functions of the taxpayer, then
those activities are not part of the "service" which is being rendered
to customers. However, administrative matters which do relate to the
service rendered, e.g., processing of orders, arranging shipments,
making telephone calls to customers or clients, or overseeing or controlling
employees engaged in performing such services, are generally part
of the service for which payment is received. Accordingly, if any
of these kinds of services are performed at the place of business
in the taxing district, then the entire receipt for that service is
a taxable receipt unless an allocation is appropriate.
A.
General. A person who is engaged in a profession or
vocation or in rendering personal services in the taxing district
in any capacity, except as an employee of another, is subject to the
tax. All compensation, however characterized, received in such capacity
must be included in the tax base.
B.
Attorneys. An attorney may exclude that portion of
the receipts from legal services which are distributed directly to
or on behalf of a client such as a distribution of a sum of money
recovered in a lawsuit, the sale of real estate, or a collection matter.
An attorney may exclude any fee or portion of a fee paid to another
attorney where a matter has been forwarded either from or to the first
attorney to or by the second attorney except where either is an employee
of the other.
C.
Accountants. An accountant may exclude services rendered
to clients outside of the taxing district only if all activity connected
with the rendering of such services, including the audit, summary
and completion of the financial statement, takes place at the client's
business situs outside the taxing district.
D.
Physicians and surgeons.
(1)
A physician with offices in the taxing district must
include in his gross receipts all revenues derived from such offices,
i.e., place of business.
(2)
A physician with offices located outside the taxing
district may exclude from gross receipts revenues derived from such
offices, i.e., place of business.
(3)
A physician with hospital affiliations within the
taxing district must include in his gross receipts all revenue derived
or generated by his connection with such hospitals.
(4)
A physician with hospital affiliations outside the
taxing district may deduct from gross receipts all revenues derived
or generated by his connection with such hospitals.
Persons operating theaters or motion picture
houses and other places of amusement where admission is charged in
the taxing district, whether owner or lessee, are subject to the business
privilege tax on the gross receipts from house or film rentals and
from commissions received on vending machine sales, public telephone
booths and sources of revenue other than sale of tickets of admission
(which are exempt from tax by state law).
A.
Under state law, the taxing district may not tax "membership
in or membership dues, fees, or assessments of charitable, religious,
beneficial or nonprofit organizations including but not limited to
sportsmen's, recreational, golf, and tennis clubs, girl and boy scout
troops and councils." Accordingly, receipts from such sources are
not subject to the tax.
B.
Many such organizations, however, sell food, beverages
and recreational equipment to, or perform noncharitable services (such
as catering services) for members as a regular part of their activities.
Although such items may be exempt from federal income tax, they are
not exempt from the taxing district taxes. Accordingly, any such organization
which does offer its members such goods or services must register
and pay the tax. (This rule does not apply to religious, charitable
or educational organizations, which are entirely exempt from tax.)
Persons who act as agents or officials of the
United States, Commonwealth of Pennsylvania or any political subdivision
thereof are not subject to the tax with respect to their activities
as such agents or officials. For this purpose, notaries public are
considered agents of the commonwealth.
The taxing district may not tax the gross receipts
of a public utility subject to the Pennsylvania Public Utility Commission
which are derived from supplying services at rates specified in tariffs
authorized or approved by the PUC. Receipts derived from advertising
and rentals or charges levied for services not subject to PUC regulations
are subject to tax.
Receipts from the performance of contracts entered
into with the taxing district, or the Commonwealth of Pennsylvania,
or the United States of America or any subdivision of such governments
are to be included in the measure of the tax.
Persons engaged in business as undertakers,
morticians or funeral directors are required to report as gross receipts
the total charges made to clients, without deducting therefrom any
costs or expenses whatsoever. Both the sale of tangible personal property
and a charge for rendering service must be included in the tax base.
A.
Generally. The profits (not gross proceeds) resulting
from the sale of capital assets, such as plant machinery and equipment,
furniture, fixtures, delivery equipment, etc., are to be included
in the tax base. If a loss is sustained on such sales, it may not
be offset against gross receipts from other sources. In computing
the profits to be included in the tax base, the costs of the asset,
less allowable depreciation, is to be deducted from the gross proceeds
of the sale.
B.
Asset located outside taxing district. Where the capital
asset sold was located at an established place of business of the
taxpayer outside the taxing district, the profit realized on the sale
thereof may be excluded from the tax base.
C.
Bulk sale or exchange, merger. Where a corporation
realizes a gain as the result of a sale or exchange of substantially
all of its assets, or as the result of a merger or consolidation with
another corporation, the amount of such gain must be included in the
tax base.
A person making a sale of products in a container
on which there is a deposit to insure the return of the container
is required to report only the gross selling price of the product
in the container.
The entire gross receipts of vending machines
and other mechanical devices which dispense goods, wares, and merchandise
are to be included in the gross volume of business of the owner or
lessor thereof. No deduction may be made therefrom for splits, rentals,
commissions or other remuneration to persons in charge of the machines
and/or to the lessee of the premises upon which the machines are located.
Receipts from transactions between affiliated
companies, other than those of a purely accommodation nature, are
subject to inclusion in gross volume of business.
Where one department, branch or division of
a corporation or other business entity, furnishes goods, wares, and
merchandise to another department, branch or division of the same
corporation or business entity, the amounts recorded on the books
to reflect such interdepartmental transactions shall not be included
in the gross volume of business of the taxpayer.
In the case of a trade-in or part payment in
goods, wares and merchandise in a transaction in which goods, wares
and merchandise are sold and allowances made, the taxpayer may at
his option deduct the value of the trade-in or part payment from gross
receipts so long as done on the face of the invoice at the time of
the original transaction as a medium for adjusting the price of the
goods, wares or merchandise; provided, however, that if no such deduction
is taken by the merchant, then the value allowed for the trade-in
or part payment in goods, wares or merchandise must be deducted by
the dealer at the time of resale of the trade-in or part payment so
that no tax is levied or collected on the dollar volume of business
derived from the resale of goods, wares and merchandise taken by any
dealer as a trade-in or as part payment for other goods, wares and
merchandise, except to the extent that the retail price exceeds the
trade-in allowance.
Refunds or credits will be issued upon appropriate
verification of overpayment.
Any broker, agent or salesman who splits or
otherwise divides a commission with another broker, agent or salesman
in the same type of business by reason of the fact that the second
broker initiated, executed, cleared or completed a portion of the
transaction for which the fee is paid shall be permitted to exclude
from the gross receipts that portion of the fee paid to the other
broker, agent or salesman. This section does not exempt so-called
finders' fees, kickbacks, commissions, or other remuneration paid
by the broker, agent or salesman to another individual not in the
same type of business as the broker, agent or salesman. Nor does this
section exempt from the gross receipts of a broker or agent a commission
paid by said broker or agent to a salesman affiliated with him.
Bad debts may be taken from the gross volume
of business where the deduction is also taken in the same year for
IRS purposes.
Taxes collected as agent for the United States
of America, Commonwealth of Pennsylvania, or the taxing district are
excludable from taxable receipts.
Where gross or whole volume of business in its
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 Collector of Taxes, with the approval
of the taxing district, shall establish rules and regulations and
methods of allocation and evaluation so that only that part of the
gross or whole volume of business which is properly attributable and
allowable to doing business in the taxing district shall be taxed
hereunder.
If any person is liable for the same tax on
the same subject imposed under the Local Tax Enabling Act of 1965,
December 31, Pamphlet Law 1257 and its amendments, to the taxing district
and one or more political subdivisions of the state, then and in that
event the tax shall be apportioned by such percentage as may be agreed
upon by such political subdivisions, but, in no event, shall the combined
taxes of both subdivisions exceed a maximum rate of tax as fixed by
the said Enabling Act permitting the imposition of such taxes.
The taxpayer shall keep books and records of
his business so as to show clearly and accurately the amount of taxable
gross receipts minus any allowable deductions pertaining to the business
privilege and/or mercantile tax.
A partnership is considered to be a taxable
unit. The respective partners are not required to file separate returns
as individuals, but they are jointly and severally liable for payment
of the tax.
If the taxpayer is an individual, he shall sign
the return. If the taxpayer is a partnership, the return should be
signed by at least one of the general partners. If the taxpayer is
a corporation, the return should be signed by an officer of the corporation.
If a taxpayer maintains more than one place
of business in the taxing district, he is required to file only one
return and may include therein the receipts from transactions occurring
in all of his places of business in the taxing district.
Any tax payment made under protest which the
taxing district thereafter determines to have been improperly paid
shall be refunded to the taxpayer upon request and with the filing
of proper forms.
A.
Generally, the registration form and/or license must
be posted conspicuously at each place of business of licensee at all
times.
B.
Vending machine owners. A person who sells goods,
wares or merchandise by means of vending machines and who has not
otherwise procured a license under this article, shall procure one
license covering all of his vending machines and shall post it at
its principal place of business.
C.
Persons with no place of business in the taxing district.
Persons conducting business within the taxing district but having
no place of business there shall not be required to post their registrations.
But if such time as such person establishes a place of business within
the taxing district, he shall notify the Collector of Taxes of the
location of such place of business and shall thereafter post his registration
at such place business.
D.
Contractors. Contractors, regardless of the number
of field offices maintained within the taxing district, shall be considered
to have one place of business for the purpose of registering.
This article shall be a supplement to Ordinance
No. 266, known as the "Middletown Business Privilege Tax Ordinance,"
and Ordinance No. 182, known as the "Mercantile Tax Ordinance,"[1] and shall be interpreted as providing rules and regulations
for the collection of facts as imposed by said ordinances. In the
event of any conflict between this article and Ordinance Nos. 266
and 182, the provisions of Ordinance Nos. 266 and 182 shall control.
[1]
Editor's Note: See Arts. I and II of this
chapter.
[Added 10-24-2022 by Ord. No. 845]
A.
Definitions.
As used in this subsection, the following terms shall have the meanings
indicated, unless the context clearly indicates otherwise.
(1)
Additional charge or additional charges. Any interest, fee, penalty,
or charge accruing to and in excess of the face amount of the real
estate tax as provided in the real estate tax notice.
(2)
Qualifying event.
(a)
For the purposes of real property, the date of transfer of ownership.
(b)
For manufactured or mobile homes, the date of transfer of ownership
or the date a lease agreement commences for the original location
or relocation of a manufactured or mobile home on a parcel of land
not owned by the owner of the manufactured or mobile home. The term
does not include the renewal of a lease for the same location.
(3)
Tax Collector. The elected tax collector for the Township of Middletown,
Delaware County, any authorized or designated delinquent tax collector,
the Delaware County Tax Claim Bureau, or any alternative collector
of taxes as provided for in the act of July 7, 1947 (P.L. 1368, No.
542), known as the "Real Estate Tax Sale Law,"[1] an employee, agent or assignee authorized to collect the
tax, a purchaser of claim for the tax or any other person authorized
by law or contract to secure collection of, or take any action at
law or in equity against, the person or property of the taxpayer for
the real estate tax or amounts, liens or claims derived from the real
estate tax.
[1]
Editor's Note: See 72 P.S. § 5860.101 et seq.
B.
Waiver.
The Tax Collector, for tax years beginning on and after January 1,
2023, grant a request to waive additional charges for real estate
taxes if the taxpayer does all of the following:
(1)
Provides a waiver request of additional charges, on a form provided
by the Pennsylvania Department of Community and Economic Development,
or successor commonwealth agency, to the Tax Collector in possession
of the claim within 12 months of the qualifying event;
(2)
Attests that the tax notice was not received;
(3)
Provides the Tax Collector in possession of the claim with one of
the following:
(a)
A copy of the deed showing the date of real property transfer; or
(b)
A copy of the title following the acquisition of a mobile or manufactured
home subject to taxation as real estate showing the date of issuance
or a copy of an executed lease agreement between the owner of a mobile
or manufactured home and the owner of a parcel of land on which the
mobile or manufactured home will be situated showing the date the
lease commences; and
C.
Pays
the face value of the amount of the tax notice for the real estate
tax with the waiver request.
