[Adopted 11-3-2011 by Ord. No. 536]
A.
This article is adopted in conformance with and pursuant to authority
granted by the Borough Code in 8 Pa.C.S.A. §§ 1006(4)
and 1203, as amended, and the Pennsylvania Local Tax Enabling Act,
53 P.S. § 6924.101 et seq., as amended.[1]
B.
This article is adopted to promote and protect the health, safety,
and welfare of the residents of the Borough to generate revenue for
police, fire and/or emergency services, road construction and/or maintenance,
and possibly the reduction of property taxes and/or through the implementation
of a homestead and farmstead exclusion in accordance with 53 Pa.C.S.A.
Chapter 85, Subchapter F.[2]
[2]
Editor's Note: See 53 Pa.C.S.A. § 8581 et seq.
The name of this tax shall be known as the "Local Services Tax"
(LST).
The following words used in this article shall have, unless
the context clearly indicates otherwise, the meanings given to them
in this section:
The Borough of Kenhorst, Berks County, Pennsylvania.
An individual, partnership, association, 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.
Compensation as determined under Section 303 of the Act of March 4, 1971 (P.L. 6, No. 2) (72 P.S. § 7303), known as the "Tax Reform Code of 1971." and regulations of 61 Pa. Code Part I, Subpart B, Article V (61 Pa. Code § 101.1 et seq.) (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.
Indicates the singular and plural number as well as male,
female and neuter gender.
Any person, male or female, engaged in any occupation within
the Borough.
The net income from 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) (72 P.S. § 7303) known as the "Tax Reform Code of 1971," and regulations of 61 Pa. Code Part I, Subpart B, Article V (61 Pa Code § 101.1 et seq.) (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, carried
on or performed within the Borough for which compensation is charged
or received, whether by means of salary, wages, commission or fees
for services rendered.
The calendar year divided by the number of payrolls of a
person's employer. For a self-employed person, a payroll period
shall be one week.
A natural person, male or female, engaged in any occupation
within Borough.
The Tax Collector selected by a resolution of the Borough
Council to receive and collect the Local Services Tax.
The Kenhorst Borough Local Services Tax (LST) in the amount
of $52 levied by this article.
Beginning on January 1, 2012, each person engaged in an occupation
within the Borough during the effective term of this article shall
pay a Local Services Tax in the amount of $52 per year, assessed on
a pro rata basis for each payroll period in which the person is engaging
in an occupation, such share to be determined by dividing the annual
tax by the number of payroll periods established by the employer,
rounded down to the nearest one-hundredths of a dollar.
No less than 25% of the funds collected by way of the LST shall
be utilized to fund emergency services.
Tax collection sources shall be limited to earned income and
net profits.
Each employer shall prepare and file a return showing a computation
of the tax on forms to be supplied to him by the Borough Manager or
the Receiver of Taxes. It is further provided that if the employer
fails to file said return and pay the tax, whether or not he makes
collection thereof from the salary, wages, or commission paid by him
to the persons engaged by him in an occupation within the Borough,
the employer shall be responsible for the payment of the tax in full
and as though the tax had originally be levied against him.
Beginning on January 1, 2012, and continuing each year thereafter,
each employer shall deduct the pro rata share on a payroll basis for
each payroll period in which the employee is engaged in an occupation,
except as set forth below. Tax deducted shall be paid over to the
Borough quarterly, within 30 days after the end of the quarter.
Individuals who earn less than $12,000 per year shall be exempt
from the payment of said LST. In order to obtain said exemption at
the beginning of the tax year, individuals who claim that they shall
make less than $12,000 shall complete a low income exemption certificate.
A.
When employers receive said certificate, as prepared by Department
of Community and Economic Development, they shall be exempted from
the collection from the employee. In the event that the employee who
claimed an exemption reaches earnings of $12,000, the employer at
that time shall collect said LST.
B.
The employee claiming the exemption must attach a copy of the prior
year's final pay stub or copy of a prior year's W-2 to the
exemption when it is submitted to the employer. The employee must
file his income exemption certificate with both the taxing body and
the employer.
All individuals who are on active military duty or have been
called to active military duty at any time within the taxing year
shall be exempt from the payment of the LST. This shall include any
former and/or current member of the military who is a paraplegic,
double and/or quadruple amputee or has any service-related disability
as declared by the United States Veterans Administration or its successor,
to be a total one-hundred-percent disability. Proof of the same shall
be submitted to the taxing authority to achieve said exemption.
A.
Employers must "restart" withholding the LST from an employee who
files an exemption certificate in the following circumstances:
B.
Employers must "restart" withholding of the LST by withholding: a
"catch-up" lump sum tax equal to the amount of tax that was not withheld
from the employee as a result of the exemption; and the same amount
per payroll period that is withheld from other employees. Except for
monitoring when an employee who has filed an income exemption certificate
earns more than $12,000, the intent of this amendment is that employers
are not responsible for investigating exemptions, monitoring tax exemption
eligibility or exempting an employee from the tax.
A.
Assessment and collection. Since the tax set forth herein totals
$52, the tax will be assessed and collected on a pro rata basis determined
by the number of payroll periods established by an employer for the
calendar year. The pro rata share of the tax assessed on each taxpayer
for a payroll period is calculated by dividing the combined rate of
the LST by the number of payroll periods established by the employer
for the calendar year. When calculating the pro rata share, employers
are required to round down to the nearest $100. For instance, a $52
tax would be collected at $1 per week for taxpayers paid weekly, or
at $4.33 per month for taxpayers paid monthly.
B.
Remittance. Employers must remit withheld taxes to the designated
Tax Collector 30 days after the end of each calendar quarter. The
municipal and school taxes must be withheld together and remitted
to the municipality or the Tax Collector, who are required to distribute
the school's share of the tax to the school district.
C.
Self-employed individuals. The tax shall be prorated and paid by
self-employed individuals on a quarterly basis, as if the payroll
period is a calendar quarter. Self-employed taxpayers shall pay the
tax to the municipality or the Tax Collector 30 days after the end
of each calendar quarter.
D.
Penalties. Failure to follow the above payment provisions shall result
in the imposition of a five-percent penalty collected and assessed
by the appropriate entity.
The LST payment shall be limited to one jurisdiction per person
per payroll period. In the event that the employee (taxpayer) works
in more than one taxing area, tax will be due in the area of residence,
if employed there, or in the absence of that criteria to the taxing
authority closest to their place of residence.
Each person who is engaged in more than one occupation shall
be subject to the payment of the tax on his principal occupation,
and his principal employer shall deduct the tax and deliver to him
evidence of the deduction on a form to be furnished to the employer
by the Borough Manager or the Receiver of Taxes, which form shall
be evidence of the deduction having been made and, when presented
to any other employer, shall be authority for such employer to not
deduct the tax from the person's wages, but to include such person
on his return by setting forth his name, address and the name and
account number of the employer who deducted the tax.
All employers having their place of business outside the Borough,
but whose employees engage in an occupation within the Borough, are
by virtue thereof bound by and are subject to the provisions, penalties,
and regulations promulgated under this part. Furthermore, any employee
of a nonresident employer or any person engaged in an occupation within
the Borough may, for the purpose of this article, be considered a
self-employed person and, in the event the tax is not paid, the Borough
shall have the option of proceeding against either the employer, or
the employee for the collection of the tax as hereinafter provided.
A.
It shall be the duty of the Receiver of Taxes to accept and receive
payment of the tax and to keep record thereof showing the amount received
by him from each employer or self-employed person, together with the
date the tax was received.
B.
The Receiver of Taxes is hereby charged with the administration and
enforcement of this article and is hereby charged and empowered to
adopt rules and regulations relating to any matter pertaining to the
administration and enforcement of this article, including provisions
for the examination of the payroll records of any employer subject
to this article, the examination and correction of any return made
in compliance with this article, 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 Receiver of Taxes shall
have the right to appeal to the Berks County Court of Common Pleas
as in other cases involved.
C.
The Receiver of Taxes is hereby authorized to examine the books and
payroll records of any employer or, if no return was made, to ascertain
the tax due. Each employer is hereby directed and required to give
the Borough Administrator the means, facilities and opportunity for
such examination.
The rules and regulations for the refund process shall be as
follows:
A.
In the event that an individual should be subjected to more than
one deduction or payment, such individual so aggrieved may file a
"claim for refund" on a form prescribed by the Receiver of Taxes.
B.
Whenever it occurs that an individual is not engaged in a business
or occupation within the corporate limits of the Borough of Kenhorst
and this tax was withheld or paid, such individual so aggrieved may
file a "claim for refund" on a form prescribed by the Director.
C.
Claim for refund must be submitted to the Borough within three years
of the due date for the filing of the tax return or report as extended
or within one year after actual payment of the tax, whichever is later.
In the event a taxpayer requests receipt of payment, said receipt
shall be issued by the Tax Collector of the Borough.
A.
In the event that the tax under this article remains due or unpaid
30 days after the dates set forth above, the Receiver of Taxes may
sue for the recovery of the tax due or unpaid under this article,
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 the tax shall be calculated beginning with
the due date of the tax, and a penalty of 10% shall be added to the
flat rate of the tax for nonpayment thereof. When suit is brought
for the recovery of the tax, the person liable therefor shall, in
addition, be responsible and liable for the costs of collection including
reasonable attorney's fees.
Whoever makes any false or untrue statements on any return required by this article or whoever refuses inspection of his books, records or accounts in his custody and control, setting for the number of persons or employees subject to this tax who are in his employment or whoever fails or refuses to file any return required by this article shall, upon conviction before the Magisterial District Judge, be punishable as provided in Chapter 1, Article I, Enforcement; General Penalty, of this Code. It is further provided that the action to enforce the fine and penalty herein provided may be instituted against any person in charge of the business of any employer who has failed or refuses to file a return required by this article.
