This article shall be known as the "Business Privilege Tax Ordinance."
[Adopted 12-18-1979 by Ord. No. 633 (Ch. XXI, Part 5, of the 1993 Code of Ordinances)]
[Amended 11-16-1982 by Ord. No. 651]
The following words and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
The Borough of West Reading.
Any activity carried on or exercised for gain or profit in the Borough of West Reading, including but not limited to the sale of merchandise or other tangible personalty or the performance of services and the rental of personalty and/or realty.
The period January 1 to December 31, inclusive.
The actual gross consideration credited or received for or on account of sales made, rentals and/or services rendered by any business subject to the tax imposed by this article. For the purposes of this article, "gross volume of business" is intended also to mean "whole volume of business."
The period from January 1 to December 31, inclusive.
Any individual, partnership, limited partnership, association, firm or corporation. Whenever used in any clause prescribing or imposing a penalty, the term "person" as applied to associations shall mean the partners or members thereof, and as applied to corporations, the officers thereof.
Any person who is a dealer in, or vendor of, goods, wares and merchandise who is not a wholesale dealer or vendor (as defined in this article).
The person duly appointed by the Council of the Borough of West Reading to administer the within tax.
A person subject to the payment of the tax imposed by this article.
The period from January 1 to December 31, inclusive.
The Treasurer of the Borough of West Reading.
Any person who sells to dealers in or vendors of goods, wares and merchandise and to no other persons.
[Amended 11-16-1982 by Ord. No. 651]
There is hereby levied for the tax year 1980 and annually thereafter a tax for general revenue purposes on the privilege of doing business as herein defined in the Borough of West Reading as follows:
A.
Rate and basis of tax. The rate of tax on each dollar of the whole or gross volume of business transacted by any person subject to the payment of tax within the territorial limits of the Borough of West Reading shall be:
[Amended 12-18-2018 by Ord. No. 1101; 12-17-2019 by Ord. No. 1119; 11-15-2022 by Ord. No. 1156]
(1)
Wholesale dealers in goods, wares and merchandise: the rate of one mill ($1 per $1,000 of gross volume of business) on each dollar of the annual whole or gross volume of business transacted by them;
(2)
Retail dealers in goods, wares and merchandise: the rate of 1 1/2 mills ($1.50 per $1,000 of gross volume of business), on each dollar of the annual whole or gross volume of business transacted by them;
(3)
All other businesses, including but not limited to those businesses engaged in service and rental transactions: the rate of 1 1/2 mills ($1.50 per $1,000 of gross volume of business) on each dollar of the annual whole or gross volume of business transacted by them;
(4)
Businesses with receipts from both wholesale business and retail or other business: the rate of one mill ($1 per $1,000 of gross volume of business) on each dollar of wholesale business and the rate of 1 1/2 mills ($1.50 per $1,000 of gross volume of business) on each dollar of nonwholesale business;
B.
Computation of volume of business.
(1)
Every person subject to the payment of the tax hereby imposed who has commenced his business prior to the full calendar year preceding the tax year shall compute his annual estimated gross volume of business upon the actual gross amount of business transacted by him during said immediately preceding full calendar year.
(2)
Every person subject to the payment of the tax hereby imposed who has commenced or who commences his business prior to the beginning of the tax year, but after the beginning of the full calendar year immediately preceding the tax year, shall compute his estimated annual gross volume of business for the tax year upon the gross volume of business transacted by him during said prior calendar year, taking the monthly average during said period and multiplying the same by 12. In the event that he shall be in business fewer than 90 days in the preceding calendar year, he shall be permitted to use sufficient days in the calendar year in which the tax year begins to equal 90 successive days after commencement of business in order to compute a monthly average thereon, and to multiply the average by 12.
(3)
Every person subject to the payment of the tax hereby imposed who has commenced or commences his business subsequent to the beginning of the tax year, if there shall be less than three months from the commencement of his business to the end of the tax year, shall compute his annual gross volume of business upon the actual gross amount of business transacted by him during the tax year; if there shall be more than three months from the commencement of his business to the end of the tax year, he shall compute his estimated gross volume of business for such tax year upon the gross volume of business transacted by him during the period from the commencement of his business to the end of the tax year, taking the monthly average during the first three months of business to the end of the tax year.
(4)
Every person subject to the payment of the tax hereby imposed who engages in a business temporary, seasonal or itinerant by nature, shall compute his estimated gross amount of business to be transacted by him for the period said person engaged in such temporary, seasonal or itinerant business within the Borough by a method to be determined by the Tax Administrator.
(5)
The Tax Administrator is hereby authorized to accept payment under protest of the amount of business privilege tax claimed by the Borough in any case where the taxpayer disputes the validity or amount of the Borough's claim for tax. If it is thereafter judicially determined by a court of competent jurisdiction that no tax is due or that the Borough has been overpaid, the amount of the payment or overpayment shall be refunded to the taxpayer. The provisions of this section shall be applicable to cases in which the facts are similar to those in a case litigated in other courts of competent jurisdiction outside of Berks County.
(6)
Payments made under any mercantile license tax ordinance which may be hereafter adopted for business to which this tax is applicable shall be credited to this tax and vice versa.
C.
Persons, business and receipts exempted.
(1)
Persons and business. Persons employed for a wage or salary, nonprofit corporations or associations organized for religious, charitable or educational purpose, agencies of the government of the United States or of the Commonwealth of Pennsylvania and the business of any political subdivision, or of any municipal authority created or organized under and pursuant to any act of assembly are exempt from the provisions of this article.
(2)
No such tax shall be assessed and collected on a privilege, transaction, subject or occupation which is subject to a state tax or license fee, and which tax or license fee has been held by the courts of Pennsylvania to be the basis for exemption from the imposition of a business privilege tax by a municipality.
(3)
Utilities. No such tax shall be assessed and collected on the gross receipts from utility service of any person or company whose rates of service are fixed and regulated by the Pennsylvania Public Utility Commission; or on any public utility service rendered by any such person or company or on any privilege or transaction involving the rendering of any such public utility service.
(4)
State tax on tangible property. No such tax shall be assessed and collected on the privilege of employing or using any tangible property which is subject to a state tax except on sales of admission to places of amusement or on sales or other transfers of title or possession of property.
(5)
Production and manufacture. No such tax shall be assessed and collected on goods, articles and products, or on by-products of manufacture, or on minerals, timber, natural resources and farm products, manufactured, produced or grown in the Borough of West Reading, or on the preparation or processing thereof for use or market, or on any privilege, act or transaction relating to the business of manufacturing, the production, preparation or processing of minerals, timber and natural resources or farm products, by manufacturers, by producers and by farmers with respect to the goods, articles and products of their own manufacture, production or growth, or any privilege, act or transaction relating to the business of processing by-products of manufacture, or on the transportation, loading, unloading or dumping or storage of such goods, articles, products or by-products.
D.
Determination of gross or whole volume of business. Gross or whole volume of business upon which the tax hereunder is computed shall include the gross consideration credited or received for or on account of sales made, rentals and/or services rendered, subject only to the following allowable deductions and exemptions:
(1)
The dollar volume of business transacted by wholesale and retail dealers derived from the resale of goods, wares and merchandise taken by any dealer as trade-in or as part payment for other goods, wares and merchandise, except to the extent that the resale price exceeds the trade-in allowance.
(2)
Refunds, credits or allowances given by a taxpayer to a purchaser on account of defects in goods, wares or merchandise sold, or on account of goods, wares or merchandise returned.
(3)
Any commissions paid by a broker to another broker on account of a purchase or sales contract initiated, executed or cleared with such other broker.
(4)
Bad debts, where the deduction is also taken in the same year for federal income taxation purposes.
E.
Partial exemptions. 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 Council of the Borough of West Reading 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 Borough shall be taxed hereunder.
F.
Rate when same tax is imposed by two taxing bodies. If any person is liable for the same tax on the same subject imposed under the Local Tax Enabling Act, 1965, December 31, Pamphlet Law 1257, and its amendments,[1] to the Borough 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 said subdivisions exceed a maximum rate of tax as fixed by said Enabling Act permitting the imposition of such taxes.
[1]
Editor's Note: See now 53 P.S. § 6924.101 et seq.
G.
Records. The taxpayer, to obtain the foregoing enumerated exclusions and deductions, shall keep books and records of his business so as to show clearly, accurately and separately the amount of such sales and services as are excluded from the tax and the amounts of such sales and services which he is entitled to deduct from the gross volume of business as hereinbefore provided.
[Amended 11-16-1982 by Ord. No. 651; 12-18-2018 by Ord. No. 1101]
A.
Every return shall be made upon a form furnished by the Tax Administrator. Every person making a return shall certify the correctness thereof by signature.
B.
Business privilege tax returns are due annually on or before April 15. For the first year in which business activity has commenced within the district, a tax return for the initial year's estimated tax is due within 100 days after commencement of business activity if business activity commenced prior to July 1.
C.
Each year's tax has two components: the current year's estimated tax; and the prior year's final tax. The current year's tax is estimated based on actual gross volume of business from the immediate prior year. The prior year's final tax is a reconciliation using the actual gross volume of business from the immediate prior year, less the estimated tax paid from the previous year's return.
D.
Computation of estimated and actual gross volume of business shall be made in the following manner:
(1)
Estimated gross volume of business for any tax year of any person subject to the payment of the tax hereby imposed who has commenced business at least a full year prior to January 1 of that tax year shall be the actual gross volume of business of that person during the 12 months preceding such January 1.
(2)
Estimated gross volume of business for any tax year of any person subject to the payment of the tax hereby imposed who commences business subsequent to January 1 of a tax year or the prior year shall be computed for the initial and subsequent tax year in the case of the initial tax year by multiplying the average monthly gross volume of business before July 1 by the number of months from start to year end, and in the case of the subsequent year multiplying by 12 the average of monthly gross volume of business during the months of business activity prior to January 1.
(3)
Every person subject to the payment of the tax hereby imposed who engages in business which is temporary, seasonal, or itinerant by its nature shall compute gross volume of business upon such person's actual gross volume of business during each tax year and shall file a return and pay the tax within 30 days from the date business is completed during the tax year.
[Amended 11-16-1982 by Ord. No. 651; 12-17-2002 by Ord. No. 875]
Any person desiring to conduct, or to continue to conduct, any business, as herein defined, within the Borough of West Reading shall file with the Tax Administrator an application for a business privilege license and shall pay a fee for the initial license and a fee for each annual renewal thereof, such license fees to be determined and set from time to time by resolution of the Borough Council.
[Amended 11-16-1982 by Ord. No. 651]
The license issued shall be conspicuously posted in the place of business for which the said license is issued, and shall remain in effect for the license year or fraction of year for which said license was issued. In cases where more than one place of business is conducted, a separate license shall be issued for each place of business. Any taxpayer who is in default in payment of tax due hereunder shall be refused a license until such tax is paid in full.
[Amended 11-16-1982 by Ord. No. 651; 3-20-2018 by Ord. No. 1080]
A.
Any person who violates or permits a violation of this article shall, upon being found liable therefor, pay a fine of not more than $600, plus court costs and reasonable attorneys' fees incurred by the Borough in the enforcement proceedings. If the penalty is not paid, the Borough shall initiate a civil action for collection in accordance with the Pennsylvania Rules of Civil Procedure. Each day a violation exists shall constitute a separate offense, and each section of this article that is violated shall also constitute a separate offense. In addition to or in lieu of enforcement under this section, the Borough may enforce this article in equity in the Court of Common Pleas of Berks County.
B.
Criminal offense and fines. Tax returns shall include a statement that all information included in tax returns are statements made "under penalty," meaning that false statements are punishable under 18 Pa.C.S.A. § 4904(b) as a criminal offense. In addition to any other penalty that may be imposed, a person convicted for making false statements shall be sentenced to pay a fine of at least $1,000.
[Added 12-18-2018 by Ord. No. 1101]
C.
Payment of tax and penalties for late payment. The business privilege tax levied pursuant to this article shall be due and payable on the date on which the taxpayer is required to file a return as set forth above. All taxpayers who shall fail to pay said tax after the due date shall be charged a penalty of 10% plus an additional 1 1/2% per month or fractional part of a month, commencing with the penalty period, until said tax is paid.
[Added 12-18-2018 by Ord. No. 1101]
[Amended 11-16-1982 by Ord. No. 651]
Each day on which a person commits a violation of this article may be considered as a separate offense and punishable as such as aforeprovided.
[Amended 11-16-1982 by Ord. No. 651]
A.
The Treasurer is charged with the duties of collecting and receiving the taxes, fines and penalties imposed by this article. It shall be his duty to keep a record showing the amount received by him from each person paying the tax and the date of such receipt.
B.
The Council of the Borough of West Reading, by resolution(s), may prescribe, adopt and promulgate rules and regulations relating to any matter pertaining to the administration and enforcement of this article, including provisions for the examination and correction of returns, and payments alleged or found to be incorrect, or as to which an overpayment is claimed, or found to have occurred. The Tax Administrator is charged with enforcing the provisions of this article and any rules and/or regulations promulgated pursuant thereto.
C.
In the event the person to be assessed neglects or refuses to make a return, then in such case the Tax Administrator or his duly appointed deputies shall assess said person or persons on such an amount of whole or gross volume of business as the said Tax Administrator or his deputies deem reasonable and appropriate. In all cases of assessment, the Tax Administrator or his duly appointed deputies shall give the parties assessed a notice in which shall be stated the trade, business, occupation or class, and the amount of the business privilege tax imposed or levied.
D.
The taxpayer shall maintain such records and books of account as will enable him to make a true and accurate return in accordance with the provisions of this article. Such accounts and records must disclose in detail the gross receipts and other data pertaining to the taxpayer's gross volume of business, and must be sufficiently complete to enable the tax transactions. The Tax Administrator or his deputies are hereby authorized to examine the books, papers and records of any person or persons subject to or supposed to be subject to the tax imposed by this article, in order to verify the accuracy of the return made, or if no return was made, ascertain the tax due.
E.
Any person aggrieved by any decision of the Tax Administrator shall have the right to appeal to the Court of Common Pleas, as provided by law.
[Amended 11-16-1982 by Ord. No. 651]
Any information gained by the Tax Administrator or any other official, agent or employee of the Borough, as a result of any returns, investigations, hearings or verifications required or authorized by this article, shall be confidential, except in accordance with proper judicial order or as otherwise provided by law.
[Amended 11-16-1982 by Ord. No. 651]
A.
The Tax Administrator or his duly appointed deputies shall have the power in the name of the Borough to institute proceedings against any and all persons who violate the provisions of this article.
B.
If for any reason the tax is not paid when due and suit is brought for the recovery of any such tax, the person liable therefor shall, in addition, be liable for the costs of collection and interest and penalties herein imposed.
[Amended 11-16-1982 by Ord. No. 651]
A.
Nothing contained in this article shall be construed to empower the Borough to levy and collect the taxes hereby imposed on any person, any business, or any portion of any business not within the taxing power of the Borough under the Constitution of the United States and the laws and Constitution of the Commonwealth of Pennsylvania.
B.
If the tax, or any portion thereof, imposed upon any person under the provisions of this article shall be held with the effect of a final determination by any court of competent power or jurisdiction to be in violation of the Constitution of the United States or of the Commonwealth of Pennsylvania or any other provision of the law and/or if the collection of said tax, or any portion thereof, imposed upon any person under the provisions of this article shall be enjoined for the same reasons with the effect of a final determination, the decisions of the court shall not affect or impair the right to impose the taxes, or the validity of the taxes so imposed upon other persons as herein provided. If the rate of tax imposed by this article on any business activity, other than on wholesale dealers or wholesale vendors and retail dealers, shall be held in a similar manner to be unconstitutional or illegal, the decision shall not affect the right of the Borough to collect said tax on such activity at a rate of 1 1/2 mills ($1.50 per $1,000 of gross volume of business) and the Borough Council hereby declares its legislative intent to collect the tax at this reduced rate in such event.