[HISTORY:[1] Adopted by the Board of Supervisors of the Township of
Lower Gwynedd 11-23-2010 by Ord. No. 477. Amendments noted where
applicable.]
GENERAL REFERENCES
Tax Collector — See Ch. 240.
[1]
Editor's Note: Former Ch. 882, Occupational
Privilege Tax, was repealed 1-23-1996 by Ord. No. 322.
This chapter shall be known and may be cited
as the "Lower Gwynedd Township Local Services Tax Ordinance" or just
the "local services tax."
This chapter is enacted under the authority
of the Local Tax Enabling Act, Act No. 511 of 1965, as amended by
Act No. 7 of 2007.
The purpose of this chapter is to provide revenue
for police, fire and emergency services; road construction and maintenance;
the reduction of property taxes and for such other purposes as may
be specified for such tax from time to time by the laws of the Commonwealth
of Pennsylvania.
The following words and phrases, when used in
this chapter, shall have the meanings ascribed to them in this section,
except where the context or language clearly indicates or requires
a different meaning:
The person, public employee or private agency designated
by the political subdivision to collect and administer the tax herein
imposed.
The Department of Community and Economic Development of the
Commonwealth of Pennsylvania.
Compensation as determined under Section 303 of the Act of
March 4, 1971 (P.L. 6, No. 2), known as the "Tax Reform Code of 1971,"
and regulations in 61 Pa. Code, Pt. I, Subpt. B, Art. V (relating
to personal income tax), not including, however, wages or compensation
paid to individuals on active military service. Employee business
expenses are allowable deductions as determined under Article III
of the Tax Reform Code of 1971. The amount of any housing allowance
provided to a member of the clergy shall not be taxable as earned
income.
An individual, partnership, association, limited liability
corporation, limited liability partnership, corporation, governmental
body, agency or other entity employing one or more persons on a salary,
wage, commission or other compensation basis, including a self-employed
person.
Indicates the singular and plural number, as well as male,
female and neuter genders.
Any person, male or female, engaged in any occupation, trade
or profession within the corporate limits of the political subdivision.
The net income from the operation of a business, profession,
or other activity, except corporations, determined under Section 303
of the Act of March 4, 1971 (P.L. 6, No. 2), known as the "Tax Reform
Code of 1971," and regulations in 61 Pa. Code, Pt. I, Subpt. B, Art.
V (relating to personal income tax). The term does not include income
which is not paid for services provided and which is in the nature
of earnings from an investment. For taxpayers engaged in the business,
profession or activity of farming, the term shall not include:
Any interest earnings generated from any monetary
accounts or investment instruments of the farming business;
Any gain on the sale of farm machinery;
Any gain on the sale of livestock held 12 months
or more for draft, breeding or dairy purposes; and
Any gain on the sale of other capital assets
of the farm.
Any trade, profession, business or undertaking of any type,
kind or character, including services, domestic or other, earned on
or performed within the corporate limits of the political subdivision
for which compensation is charged or received; whether by means of
salary, wages, commission or fees for services rendered.
The area within the corporate limits of Lower Gwynedd Township.
The local services tax at the rate fixed in § 882.05 of this chapter.
The period from January 1 until December 31 in any year;
a calendar year.
For specific revenue purposes, an annual tax
is hereby levied and assessed, commencing January 1, 2011, upon the
privilege of engaging in an occupation with a primary place of employment
within the political subdivision during the tax year. Each natural
person who exercises such privilege for any length of time during
any tax year shall pay the tax for that year in the amount of $52,
assessed on a pro rata basis, in accordance with the provisions of
this chapter. This tax may be used solely for the following purposes
as the same may be allocated by Lower Gwynedd Township from time to
time: emergency services, which shall include emergency medical services,
police services and/or fire services; road construction and/or maintenance;
reduction of property taxes; or property tax relief through implementation
of a homestead and farmstead exclusion in accordance with 53 Pa.C.S.A.,
Ch. 85, Subch. F (relating to homestead property exclusion). The political
subdivision shall use no less than 25% of the funds derived from the
tax for emergency services. This tax is in addition to all other taxes
of any kind or nature heretofore levied by the political subdivision.
The tax shall be no more than $52 on each person for each calendar
year, irrespective of the number of political subdivisions within
which a person may be employed.
(a)
Exemption. Any person whose total earned income and
net profits from all sources within the political subdivision is less
than $12,000 for any calendar year in which the tax is levied is exempt
from the payment of the tax for that calendar year. In addition, the
following persons are exempt from payment of the tax:
(1)
Any person who has served in any war or armed
conflict in which the United States was engaged and is honorably discharged
or released under honorable circumstances from active service if,
as a result of military service, the person is blind, paraplegic or
a double or quadruple amputee or has a service-connected disability
declared by the United States Veterans' Administration or its successor
to be a total one-hundred-percent disability.
(2)
Any person who serves as a member of a reserve
component of the armed forces and is called to active duty at any
time during the taxable year. For the purposes of this paragraph "reserve
component of the armed forces" shall mean the United States Army Reserve,
United States Navy Reserve, United States Marine Corps Reserve, United
States Coast Guard Reserve, United States Air Force Reserve, the Pennsylvania
Army National Guard or the Pennsylvania Air National Guard.
(b)
Procedure to Claim Exemption.
(1)
A person seeking to claim an exemption from
the local services tax may annually file an exemption certificate
with the political subdivision and with the person's employer affirming
that the person reasonably expects to receive earned income and net
profits from all sources within the political subdivision of less
than $12,000 in the calendar year for which the exemption certificate
is filed. In the event the political subdivision utilizes a tax collection
officer, it shall provide a copy of the exemption certificate to that
officer. The exemption certificate shall have attached to it a copy
of all the employee's last pay stubs or W-2 forms from employment
within the political subdivision for the year prior to the fiscal
year for which the employee is requesting to be exempted from the
tax. Upon receipt of the exemption certificate and until otherwise
instructed by the political subdivision or except as required by Subsection
(b)(2), the employer shall not withhold the tax from the person during
the calendar year or the remainder of the calendar year for which
the exemption certificate applies. Employers shall ensure that the
exemption certificate forms are readily available to employees at
all times and shall furnish each new employee with a form at the time
of hiring. The exemption certificate form shall be the uniform form
provided by the political subdivision.
(2)
With respect to a person who claimed an exemption
for a given calendar year from the tax, upon notification to an employer
by the person or by the political subdivision that the person has
received earned income and net profits from all sources within the
political subdivision equal to or in excess of $12,000 in that calendar
year or that the person is otherwise ineligible for the tax exemption
for that calendar year, or upon an employer's payment to the person
of earned income within the municipality in an amount equal to or
in excess of $12,000 in that calendar year, an employer shall withhold
the local services tax from the person under Paragraph (b)(3).
(3)
If a person who claimed an exemption for a given
calendar year from the tax becomes subject to the tax for the calendar
year under Paragraph (b)(2), the employer shall withhold the tax for
the remainder of that calendar year. The employer shall withhold from
the person, for the first payroll period after receipt of the notification
under Paragraph (b)(2), a lump sum equal to the amount of tax that
was not withheld from the person due to the exemption claimed by the
person under this subsection, plus the per payroll amount due for
that first payroll period. The amount of tax withheld per payroll
period for the remaining payroll periods in that calendar year shall
be the same amount withheld for other employees. In the event the
employment of a person subject to withholding of the tax under this
paragraph is subsequently severed in that calendar year, the person
shall be liable for any outstanding balance of tax due, and the political
subdivision may pursue collection under this chapter.
(4)
Except as provided in Paragraph (b)(2), it is
the intent of this subsection that employers shall not be responsible
for investigating exemption certificates, monitoring tax exemption
eligibility or exempting any employee from the local services tax.
(c)
Refunds. Lower Gwynedd Township, in consultation with
the collector and DCED, shall establish procedures for the processing
of refund claims for any tax paid by any person who is eligible for
exemption, which procedures shall be in accord with provisions of
the general municipal law relating to refunds of overpayments and
interest on overpayments. Refunds made within 75 days of a refund
request or 75 days after the last day the employer is required to
remit the tax for the last quarter of the calendar year, whichever
is later, shall not be subject to interest. No refunds shall be made
for amounts overpaid in a calendar year that do not exceed $1. Lower
Gwynedd Township or the collector shall determine eligibility for
exemption and provide refunds to exempt persons.
(a)
Each employer within the political subdivision, as
well as those employers situated outside the political subdivision
but who engage in business within the political subdivision, is hereby
charged with the duty of collecting the tax from each of his employees
engaged by him or performing for him within the political subdivision
and making a return and payment thereof to the collector. Further,
each employer is hereby authorized to deduct this tax for each employee
in his or her employ, whether said employee is paid by salary, wage
or commission and whether or not all such services are performed within
the political subdivision.
(b)
A person subject to the tax shall be assessed by the employer a pro rata share of the tax for each payroll period in which the person is engaging in an occupation. The pro rata share of the tax assessed on the person for a payroll period shall be determined by dividing the rate of the tax levied for the calendar year by the number of payroll periods established by the employer for the calendar year. For purposes of determining the pro rata share, an employer shall round down the amount of the tax collected each payroll period to the nearest 1/100 of a dollar. Collection of the tax shall be made on a payroll period basis for each payroll period in which the person is engaging in an occupation, except as provided in Subsection (d) of this section.
(c)
No person shall be subject to the payment of the local
services tax by more than one political subdivision during each payroll
period.
(d)
In the case of concurrent employment, an employer
shall refrain from withholding the tax if the employee provides a
recent pay statement from a principal employer that includes the name
of the employer, the length of the payroll period and the amount of
the tax withheld and a statement from the employee that the pay statement
is from the employee's principal employer and the employee will notify
other employers of a change in principal place of employment within
two weeks of its occurrence. The employee's statement shall be provided
on the form approved by the DCED.
(e)
The tax shall be no more than $52 on each person for
each calendar year, irrespective of the number of political subdivisions
within which a person may be employed. The political subdivision shall
provide a taxpayer a receipt of payment upon request by the taxpayer.
(f)
No employer shall be held liable for failure to withhold the tax or for the payment of the withheld tax money to the political subdivision if the failure to withhold taxes arises from incorrect information submitted by the employee as to the employee's place or places of employment, the employee's principal office or where the employee is principally employed. Further, an employer shall not be liable for payment of the local services tax in an amount exceeding the amount withheld by the employer if the employer complies with the provisions of Subsection (b) of Section 882.06 of this chapter and this section and remits the amount so withheld in accordance with this chapter.
(g)
Employers shall be required to remit the local services
taxes 30 days after the end of each quarter of a calendar year.
Each employer shall prepare and file a return
showing a computation of the tax on forms to be supplied to the employer
by the collector. If an employer fails to file the return and pay
the tax, whether or not the employer makes collection thereof from
the salary, wages or commissions paid by him or her to an employee,
except as provided hereafter in this chapter, the employer shall be
responsible for the payment of the tax in full as though the tax had
been originally levied against the employer.
In each tax year, each employer shall use his
or her employment records to determine the number of employees from
whom such tax shall be deducted and paid over to the collector on
or before the 30th day following the end of each calendar quarter
of each such tax year.
Each self-employed individual who performs services
of any type or kind or engages in any occupation or profession within
a primary place of employment within the political subdivision shall
be required to comply with this chapter and pay the pro rata portion
of the tax due to the collector on or before the 30th day following
the end of each quarter.
(a)
The situs of the tax shall be the place of employment
on the first day the person becomes subject to the tax during each
payroll period. In the event a person is engaged in more than one
occupation, that is, concurrent employment, or an occupation which
requires the person working in more than one political subdivision
during a payroll period, the priority of claim to collect the local
services tax shall be in the following order:
(1)
First, the political subdivision in which a
person maintains his or her principal office or is principally employed;
(2)
Second, the political subdivision in which the
person resides and works if the tax is levied by that political subdivision;
(3)
Third, the political subdivision in which a
person is employed and which imposes the tax nearest in miles to the
person's home.
(b)
In case of dispute, a tax receipt of the taxing authority
for that calendar year declaring that the taxpayer has made prior
payment constitutes prima facie certification of payment to all other
political subdivisions.
All employers and self-employed individuals
residing or having their places of business outside of the political
subdivision but who perform services of any type or kind or engage
in any occupation or profession within the political subdivision do,
by virtue thereof, agree to be bound by and subject themselves to
the provisions, penalties and regulations promulgated under this chapter
with the same force and effect as though they were residents of the
political subdivision. Further, any individual engaged in an occupation
within the political subdivision and an employee of a nonresidential
employer may, for the purpose of this chapter, be considered a self-employed
person, and in the event his or her tax is not paid, the political
subdivision shall have the option of proceeding against either the
employer or employee for the collection of this tax as hereinafter
provided.
(a)
The collector shall be appointed by resolution of
the political subdivision. It shall be the duty of the collector to
accept and receive payments of this tax and to keep a record thereof
showing the amount received by him from each employer or self-employed
person, together with the date the tax was received. The collector
shall accept and maintain a record of all information submitted by
employers relating to the number of employees subject to the tax,
the number of employees exempt from the tax, all employee exemption
certificates and all refunds of tax paid to individuals and employers.
(b)
The collector is hereby charged with the administration
and enforcement of this chapter and is hereby charged and empowered,
subject to municipal approval, to prescribe, adopt and promulgate
rules and regulations relating to any matter pertaining to the administration
and enforcement of this chapter, including provisions for the examination
of payroll records of any employer subject to this chapter, the examination
and correction of any return made in compliance with this chapter
and any payment alleged or found to be incorrect or as to which overpayment
is claimed or found to have occurred. Any person aggrieved by any
decision of the collector shall have the right to appeal to the Court
of Common Pleas of Montgomery County, Pennsylvania, after exhausting
all administrative remedies (if any), as in other cases provided.
(c)
The collector is hereby authorized to examine the
books and payroll records of any employer in order to verify the accuracy
of any return made by an employer or, if no return was made, to ascertain
the tax due. Each employer is hereby directed and required to give
the collector the means, facilities and opportunity for such examination.
(a)
In the event that any tax under this chapter remains
due or unpaid 30 days after the due dates set forth above, the collector
may sue for the recovery of any such tax due or unpaid under this
chapter, together with interest and penalty.
(b)
If for any reason the tax is not paid when due, interest
at the rate of 6% on the amount of such tax shall be calculated beginning
with the due date of the tax and a penalty of 5% shall be added to
the flat rate of such tax for nonpayment thereof. Where suit is brought
for the recovery of this tax or other appropriate remedy undertaken,
the individual liable therefor shall, in addition, be responsible
and liable for the costs of collection.
Whoever makes any false or untrue statement
on any return required by this chapter, or whoever refuses inspection
of the books, records or accounts in his or her custody and control
setting forth the number of employees subject to this tax who are
in his or her employment, or whoever fails or refuses to file any
return required by this chapter shall be guilty of a violation and,
upon conviction thereof, shall be sentenced to pay a fine of not more
than $600 and costs of prosecution, and, in default of payment of
such fine and costs, to imprisonment for not more than 30 days. The
action to enforce the penalty herein prescribed may be instituted
against any person in charge of the business of any employer who shall
have failed or who refuses to file a return required by this chapter.
(a)
Nothing
contained in this chapter shall be construed to empower the political
subdivision to levy and collect the tax hereby imposed on any occupation
not within the taxing power of the political subdivision under the
Constitution of the United States and the laws of the Commonwealth
of Pennsylvania.
(b)
If
the tax hereby imposed under the provisions of this chapter shall
be held by any court of competent jurisdiction to be in violation
of the Constitution of the United States or of the laws of the Commonwealth
of Pennsylvania as to any individual, the decision of the court shall
not affect or impair the right to impose or collect said tax or the
validity of the tax so imposed on other persons or individuals as
herein provided.
