[Adopted as Title 2, Ch. 7, Art. 2, of the 1977 Code]
Editor's Note: This chapter was adopted 12-7-1977 and amended 12-29-1978 by Ord. No. 897; 7-18-1983 by Ord. No. 1029; 12-7-1987 by Ord. No. 1147; 9-6-1988 by Ord. No. 1164; 9-6-1988 by Ord. No. 1165; and 11-9-1998 by Ord. No. 1381.
This article shall be known as and may be cited as the "Mercantile License Tax Ordinance."
The following words and phrases, when used in this article, shall have the meanings ascribed to them in this section unless the context clearly indicates a different meaning:
- The determination of business taxes due from a taxpayer as the result of an audit or review of tax returns filed with the Township.
- An inspection of the books and accounting records of a taxpayer by the designated auditor or business tax officer for the Township of Upper Moreland for the purpose of verifying the correct payment of business taxes and occupational privilege taxes by the taxpayer. An audit may be conducted in person at the taxpayer's location, at the Business Tax Office or through the provision of copies of requested records to the Business Tax Office through the mail.
- The Business Tax Office of the Township and all duly authorized business tax officers.
- An overpayment made to the Township of business privilege tax, mercantile license tax or occupational privilege tax. A credit may be used to satisfy future business tax obligations upon the written request of the taxpayer and the filing of all required tax returns.
- A decision by the Business Tax Office, including an assessment of tax due or payment or denial of a refund or credit.
- GROSS RECEIPTS
- Cash, credits, property of any kind or nature, received or allocable or attributable to any business. "Gross receipts" excludes the following:
- A. Receipts upon which a mercantile tax or similar tax has been imposed by another political subdivision by reason of the performance of the service, sale of goods or conducting business in that political subdivision, provided that proof of payment of such tax must be provided to the collector at the time of claiming such exclusion.
- B. Refunds, credits or allowances given by a person to a customer on account of defects in services rendered or in goods, wares and merchandise sold or returned may be deducted from the amount of the "gross receipts" of the person.
- C. Adjustments allowed to customers may be deducted from gross receipts if they are deducted on the face of the invoice as a medium of adjusting the price or fee for the service and if they are not reimbursed to the person by his supplier or some other person.
- D. Federal, state and local taxes are not included in gross receipts if they are collected from the customer and are separately stated on the evidence of charge or sale, or the taxpayer produces satisfactory proof of payment of the federal, state or local taxes.
- E. The collector shall promulgate rules and regulations setting forth methods of allocation of gross receipts for such cases where the gross receipts of a business in its entirety are not subject to tax imposed by this article by reason of the provisions of the commerce clause of the United States Constitution or under the Constitution of the Commonwealth of Pennsylvania.
- An individual, partner, corporation, unincorporated association or any other legal entity.
- RETAIL DEALER or RETAIL VENDOR
- Any person who is a dealer in or a vendor of goods, wares and merchandise who is not a wholesale dealer or vendor, wholesale and retail dealer or vendor, as hereinafter defined.
- Any act or instance of helping or benefiting another for a consideration.
- TAX YEAR
- The twelve-month period beginning the first day of January and ending the last day of December.
- TEMPORARY, SEASONAL OR ITINERANT BUSINESS
- Any business that is conducted at one location for less than 60 consecutive calendar days.
- The Township of Upper Moreland.
- WHOLESALE AND RETAIL DEALER or WHOLESALE AND RETAIL VENDOR
- Any person who sells to dealers in or vendors of goods, wares and merchandise and to other persons.
- WHOLESALE DEALER or WHOLESALE VENDOR
- Any person who sells to dealers in or vendors of goods, wares and merchandise and to no other persons.
The terms "person," "wholesale dealer" or "wholesale vendor," "retail dealer" or "retail vendor," and "wholesale and retail dealer" or "wholesale and retail vendor," as defined in this section, shall not include the following:
The government of the United States or of the Commonwealth of Pennsylvania, or any employee or agency thereof.
Any organization or nonprofit corporation which is or has been determined to be an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "code"), and is exempt from federal income taxes under Section 501(a) of the Code; provided, however, that such organization or nonprofit corporation shall be required to register under § 310-5 of this article, and the tax imposed under this article shall be applicable to any "unrelated business income" of such organization or nonprofit corporation, as defined in Section 512 of the Internal Revenue Code.
The registration and tax provisions of this article apply to any person who is a wholesale or retail vendor or dealer in goods or who conducts a restaurant or other place where food or beverages are sold, except for those persons who engage in any business, trade, occupation, profession, or vocation in which there is offered any service or services to the general public or a limited number of the general public for a consideration and who are thus subject to the Business Privilege Tax Ordinance, Article I of this chapter of the Township Code of Upper Moreland Township.
The article applies not only to businesses in existence at the beginning of the license year but also to businesses begun during the tax year or carried on in the Township for any part of the tax year.
A person who is a wholesale or retail vendor or dealer or who conducts a restaurant or other place where food or beverages are sold shall have the burden of proof with respect to the assertion of any claim that the gross receipts, or any portion of such gross receipts, is excludable from the tax imposed by this article or that any provision of this article is inapplicable to such person.
Every person engaging in a wholesale, retail or wholesale and retail business in the Township shall pay an annual mercantile license tax for the tax year at the rate of 1.5 mills on his gross receipts for retail and at the rate of one mill of his gross receipts for wholesale, provided no tax will be levied on any person who has registered with the Township and whose gross receipts are $2,900 or less, provided that a tax return is filed.
Every person who is a wholesale or retail vendor or dealer in goods or who conducts a restaurant or other place where food or beverages are sold shall register with the collector by completing the application form devised by the collector and furnishing the information required by such form, including but not limited to name, address, business address, and nature of business. Such registration shall be done without regard for whether any tax will be due and payable. The collector shall, upon completion of the registration form, issue a certificate of registration to such person. A separate certificate of registration must be obtained each year for each place of business in the Township. The certificate must be obtained on or before January 15 of each tax year if the business was begun prior to that tax year. If a business is begun or a new place of business established during the tax year, the certificate must be obtained prior to commencing business. The certificate shall be valid for the location for which it was issued and the applicant only, and shall not be assignable.
A person who may engage in a business with gross receipts from wholesale or retail sales of merchandise or restaurant as well as receipts from services is not required to obtain both a mercantile license under this article and a registration certificate under the Business Privilege Tax Ordinance. Either a mercantile license or a business privilege registration, whichever is appropriate to the majority of the taxpayer's gross receipts, shall be obtained.
The certificate is issued for a tax year from January 1 to December 31 of each year. A certificate obtained at any time during the year is valid only from the date of issue until the end of the year with respect to which it is issued.
Before the issuance of a certificate, the applicant shall make payment to the collector of a registration fee for each place of business. The fee shall be that set by the Board of Commissioners and set forth in Chapter 140, Fees, Rates, and Permits, of the Upper Moreland Township Code.
All registration fees due under this article and not paid by January 15 of the tax year shall bear interest at the rate of 10% per month or fractional part of a month from the day they are due and payable until paid. If any person shall neglect or refuse to obtain a registration certificate as herein required, an additional penalty of 10% of the registration fee shall be added by the collector and collected.
The application for certificate of registration forms shall be available from the Collector of Mercantile License and Occupational Privilege Taxes, 117 Park Avenue, Willow Grove, Pennsylvania 19090. Failure to obtain or receive the application form shall not excuse any person from the obligation to file and obtain the registration certificate or the mercantile tax return or payment of the applicable tax hereunder.
Each application for registration shall be signed by the applicant if a natural person, and in the case of an association or partnership, by a member or partner thereof, and in the case of a corporation, by an officer thereof.
All applications for certificates of registration shall be filed with the Collector of Mercantile License and Occupational Privilege Taxes, 117 Park Avenue, Willow Grove, Pennsylvania 19090.
Every person subject to this article shall file a return as follows:
If the person has commenced business prior to January 1 of the tax year, the return shall be filed and received by the collector on or before May 1 of the tax year;
If the person commences business after January 1 of the tax year, the return shall be filed and received by the collector within 40 days from the date of commencing business;
If the person is engaged in a business which is temporary, seasonal, or itinerant in its nature, the return shall be filed and received by the collector within seven days of the completion of such business; and
If the person discontinues, terminates, or otherwise ceases business activity at the registered location, the return shall be filed and received by the collector within 30 days of the termination.
A tax return may be filed on a cash basis or on an accrual basis, but the return must be prepared in accordance with the method of accounting regularly employed in keeping the books of the taxpayer. A person who keeps his books on the cash basis will report his gross receipts on the basis of amounts actually received during the period used as the measure of the tax. A taxpayer who keeps his books on the accrual basis will report the receipts from all sales made or services rendered during the period used as the measure of tax, irrespective of the date when such monies are collected from the customer. In either case, the taxpayer must file on a calendar-year basis beginning January 1 and ending December 31, regardless of the taxpayer's fiscal year.
The estimated gross receipts for any tax year shall be determined as follows:
If the taxpayer has been engaged in business for a full year prior to January 1 of the tax year, the actual gross receipts for that prior year shall be the estimated gross receipts for the tax year.
If the taxpayer has been engaged in business prior to January 1 of the tax year, but for less than one full year, the estimated gross receipts shall be the average monthly gross receipts for the prior year multiplied by 12.
If the taxpayer commences business during the tax year, the estimated gross receipts shall be determined by multiplying the gross receipts for the first month of business by the number of months remaining in the tax year.
In the case of a temporary, seasonal or itinerant business for which a return is filed as provided in § 310-34C above, no estimate is computed. Instead, the tax is imposed on the actual gross receipts during the period covered by the return.
Any person who engages in business with gross receipts from wholesale or retail sales of merchandise or from a restaurant and from service, who registers under this article, as opposed to the Business Privilege Tax Ordinance, shall combine and report gross receipts in a single return.
At the time of filing the tax return on May 1 of the tax year except as hereinbefore provided, the person shall pay in a single payment an amount equal to the estimated tax for the current tax year and any balance due for actual gross receipts for the prior year.
Any person with a decrease in actual gross receipts from that estimated on the prior year's return shall be entitled to a credit on the estimated tax for the current year in an amount equal to the overpayment of tax for the prior year.
Tax credits resulting from overpayment by a taxpayer may only be utilized after all then due tax returns have been filed with the Tax Office. Failure to file a completed tax return as required will prevent the utilization of any accrued credits.
It shall be the duty of the collector to collect and receive all fees, taxes, interest, fines and penalties imposed by this article and to maintain a record of all payments received and the date thereof.
The collector shall pay all fees, taxes, interest, fines and penalties collected, received or recovered under the provisions of this article into the Treasury of the Township for the use and benefit of the Township.
The collector is hereby authorized and empowered to enforce the provisions of this article and, for such purpose, is duly constituted a law enforcement officer for the purpose of instituting summary proceedings under this article pursuant to the Pennsylvania Rules of Criminal Procedure.
The collector or representative of the collector may request the production for inspection and copying of books and records, including federal income tax returns and state sales tax returns with appropriate accompanying schedules, as will enable the collector to determine the accuracy of the taxpayer's return. Any person claiming any exclusion for any portion of the gross receipts must maintain complete records in support of such claim.
The collector or other designated representative is authorized to examine the books, papers and records of any taxpayer or supposed taxpayer in order to verify the accuracy of any return made, or if no return was made, then to ascertain whether a tax should be imposed and, if so, the amount of such tax. He is further authorized to examine any person connected with any business concerning any gross receipts of the business which were or should have been returned for taxation and, for this purpose, may compel the production of books, papers, records and the attendance of all persons before him, whether as parties or witnesses, whom he believes to have knowledge of such business or gross receipts. The failure to provide such records or to submit to the examination shall be a violation of this article and shall subject such person to the penalties as set forth in § 310-44 of this article. Each day such person shall fail or refuse to provide such records or submit to such examination shall constitute a separate offense.
No assessment of any tax may be made more than five years after the date on which such taxes should have been paid unless a fraudulent return or no return is filed, in which case there shall be no limitations. Suits for recovery of taxes may be brought within six years of the date of assessment or date due, whichever is later, by the collector or Township Solicitor as other debts due the Township are by law recoverable.
Any claim for a refund or use as a credit of the overpayment of the tax imposed by this article must be made in writing within three years of the due date for filing the tax return or one year after the actual payment of the tax, whichever is later.
No refund or credit will be issued to a taxpayer unless all then currently due tax returns required under this article and the Business Privilege Tax Ordinance have been filed. The Tax Office shall notify the taxpayer in writing if there are any outstanding returns required to be filed before the issuance of a credit or refund. Said return must be filed before the expiration of time for requesting a refund or credit as set forth in Subsection A above or within 30 days of the notice from the tax officer if the above-referenced limitations expired after the request for refund or credit was received.
A refund or credit accrued as a result of overpayment of mercantile license tax may be applied as payment for tax due under either the Business Privilege Tax Ordinance, the Mercantile License Tax Ordinance or Occupational Privilege Tax Ordinance.
If for any reason the tax is not paid when due, interest at the rate of 1 1/4% of the amount of the unpaid tax for each month or fraction thereof during which the tax remains unpaid shall be added to the tax. A penalty shall also be assessed in the amount of 10% of the unpaid mercantile tax balance due.
Any person who fails, refuses or neglects to comply with the provisions of this article may be punishable by a fine of not less than $50 and not more than $600 plus costs of prosecution, upon conviction before a magisterial district judge.
The collector is hereby authorized to enter into such agreements with officials of other political subdivisions of the Commonwealth of Pennsylvania for the purpose of collection of taxes imposed by this article and with the Secretary of the Treasury of the United States for access to copies of federal tax returns for the purpose of collecting the tax hereby imposed.
Each taxpayer contacted by the Business Tax Office regarding the assessment, audit, determination, review or collection of mercantile license tax shall receive a notice containing the following information:
A taxpayer may appeal any determination of the Tax Office, including an assessment, determination of underpayment, denial of refund or credit to the Tax Review Board, as set forth in Article VII of this chapter.
The Business Tax Office may enter into an installment payment agreement under which a taxpayer will satisfy an existing tax liability with a series of payments over time, if in the tax officer's professional opinion such an agreement will facilitate the collection of the tax outstanding. The duration and amount of the payment and other terms and conditions shall be at the discretion of the Business Tax Office. The installment agreement may combine payments for all eligible taxes in one payment.