[Ord. 07-118, 12/27/2007, § 101]
This Part shall be known and may be cited as the "Township of
Cumberland Local Services Tax Ordinance."
[Ord. 07-118, 12/27/2007, § 102]
This Part is enacted under the authority of the Local Tax Enabling
Act, as amended by Act No. 7 of 2007, 53 P.S. § 6901 et
seq.
[Ord. 07-118, 12/27/2007, § 103]
The purpose of this Part it 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.
[Ord. 07-118, 12/27/2007, § 104]
The following words and phrases when used in this Part shall
have the meanings ascribed to them in this section except where the
context clearly indicates or requires a different meaning:
COLLECTOR
The person or firm, from time to time, designated by motion
of the Board of Supervisors of the Township of Cumberland to collect
and administer the provisions of this Part and collect the tax levied
by this Part. Until changed by subsequent motion, the collector shall
be the same person or firm last designated to collect the emergency
and municipal services tax for the Township of Cumberland.
COMBINED RATE
The aggregate annual rate of the levied by a school district
and the Township of Cumberland located in whole or in part within
the school district.
EARNED INCOME
"Compensation" as determined under § 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, Part I, Subpart B, Article
4 (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. Any housing allowance provided
to a member of the clergy shall not be taxable as earned income.
EMPLOYER
An individual, partnership, association, corporation, governmental
body, agency or other entity employing one or more persons on a salary,
wage, commission, fee or other compensation basis, including a self-employed
person.
HE, HIS OR HIM
Singular and plural number and male, female and neuter gender.
INDIVIDUAL
Any person engaged in any occupation, trade or profession
within the jurisdictional limits of the Township of Cumberland whose
total earned income and net profits within the Township of Cumberland
are greater than $12,000 per calendar year.
NET PROFITS
The net income from the operation of a business, profession,
or other activity, (except from corporations), determined under § 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, Part I, Subpart B, Article
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:
(1)
Any interest generated from monetary accounts or investment
instruments of the farming business.
(2)
Any gain on the sale of farming machinery.
(3)
Any gain on the sale of livestock held 12 months or more for
draft, breeding or dairy purposes.
(4)
Any gain on the sale of other capital assets of the farm.
OCCUPATION
Any trade, profession, business or undertaking of any type,
kind or character including services, domestic or other, carried on
or performed with the jurisdictional limits of the Township of Cumberland
for which compensation is charged and/or received, whether by salary,
wages, commissions, fees or net profits for services rendered.
RESERVE COMPONENT OF THE ARMED FORCES
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 Guard.
TAX
The local services tax levied in this Part.
[Ord. 07-118, 12/27/2007, § 105]
The Township of Cumberland hereby levies and imposes on every
individual engaging in an occupation within the jurisdictional limits
of the Township of Cumberland a tax in the amount of $52 per annum,
beginning the 1st day of January, 2008, and continuing on a calendar
basis annually thereafter, until modified or repealed by subsequent
ordinance. This tax is in addition to all other taxes of any kind
or nature heretofore levied by the Township of Cumberland.
[Ord. 07-118, 12/27/2007, § 106]
1. The Township of Cumberland shall use the revenue derived from this
tax for the following purposes; provided, however that no less than
25% of the funds derived from this tax shall be used for emergency
services, as defined herein:
A. Emergency services, which shall include emergency medical services,
police services and/or fire services.
B. Road construction and/or maintenance.
C. Reduction of property taxes.
D. Property tax relief through implementation of a homestead and farmstead
exclusion in accordance with 53 Pa.C.S.A., Chapter 85, Subchapter
F. (relating to homestead property exclusion), and, in accordance
with § 22.6 of Act 7 of 2007, 53 P.S. § 6022.6,
as amended from time to time.
[Ord. 07-118, 12/27/2007, § 107]
1. Each employer with the Township of Cumberland and each employer situate
outside the Township of Cumberland who engages in business with the
Township of Cumberland, is hereby charged with the duty of collecting
the tax from each of the employees engaged by the employer and performing
work for the employer within the Township of Cumberland. Each person
subject to the tax shall be assessed a pro rata share of the tax for
each payroll period in which the person is engaging in an occupation.
2. The pro rate share of the tax assessed on the person for a payroll
period shall be determined by dividing the combined rate of the 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.
3. Employer collection of the local services tax shall be made on a
payroll period basis for each payroll period, beginning with the first
payroll period in which the person is engaging in an occupation.
4. No employer shall be held liable for failure to withhold the local
services tax or for payment of the withheld tax money to the Township
of Cumberland 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.
[Ord. 07-118, 12/27/2007, § 108]
Employers are required to make and file a local services tax
quarterly return 30 days after the end of each quarter of a calendar
year. The local services tax quarterly return shall list the name,
address, Social Security number of the employee; the physical address
of the employee's place of employment; the number of payroll
periods for which the local services tax was withheld and the amount
of local services tax being remitted for each employee.
[Ord. 07-118, 12/27/2007, § 109]
Each employer shall use his employment and payroll records from
the 1st day of January to March 31 each year for determining the number
of employees from whom said tax shall be deducted and paid over to
the collector on or before April 30 of the same calendar year. Supplemental
reports shall be made by each employer on July 30, October 30 and
January 31 for new employees as reflected on his employment and payroll
records from April 1 to June 30, July 1 to September 30 and October
1 to December 31, and payments on these supplemental reports shall
be made on July 30, October 30 and January 30, respectively.
[Ord. 07-118, 12/27/2007, § 110]
1. 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 the payroll
period, the priority of claim to collect the local services tax shall
be in the following order:
A. The political subdivision in which a person maintains his or her
principal office or is principally employed.
B. The political subdivision in which the person resides and works,
if the tax is levied by that political subdivision.
C. The political subdivision in which a person is employed and which
imposes the tax nearest in miles to the person's home.
2. In the case of concurrent employment, an employer shall refrain from
withholding the local services tax if the employee provides:
A. A recent statement from a principal employer that includes the name
of the employer, the length of the payroll period and the amount of
local services tax withheld.
B. 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.
3. 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.
It is the intent of this section that no person shall be subject to
the payment of the local services tax by more than one political subdivision
during each payroll period.
[Ord. 07-118, 12/27/2007, § 111]
1. The local services 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.
2. The Local Tax Enabling Act, as amended, requires municipalities and
school districts who levy the local services tax at a combined rate
exceeding $10 to exempt any person from the local services tax whose
total earned income and net profits from all sources within the Township
of Cumberland is less than $12,000 for the calendar year in which
the local services tax is levied.
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Each political subdivision levying the local services tax hereby
exempts the following persons from the local services tax:
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A. Any person whose total earned income and net profits from all sources
within the Township of Cumberland is less than $12,000 for the calendar
year in which the local services tax is levied.
B. Any person who 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 it successor to be a total 100% permanent disability.
C. 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. A "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.
3. A person seeking to claim an exemption from the local services tax
must annually file an exemption certificate with the collector of
the tax for the political subdivision levying the tax and file a copy
of the certificate with the person's employer affirming that
the person reasonably expects to receive earned income and net profits
from all sources within the Township of Cumberland of less than $12,000
in the calendar year for which the exemption certificate is filed.
The exemption certificate shall have attached to it a copy of all
of the employee's last pay stubs or W-2 forms from employment
within the Township of Cumberland for the year prior to the fiscal
year for which the employee is requesting to be exempted from the
local services tax.
4. Upon receipt of the exemption certificate and until otherwise instructed
by the collector of the tax for the Township of Cumberland, the employer
shall not withhold the tax from the person during the calendar year
or remainder of the calendar year for which the exemption certificate
applies. With respect to a person who claimed an exemption from the
local services tax, upon notification to an employer by the person
or by the collector of the tax for the Township of Cumberland, that
the person has received earned income and net profits from all sources
within that Township of Cumberland 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 that Township of Cumberland
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
as follows:
A. If a person who claimed an exemption for a given calendar year from
the local services tax becomes subject to the tax for the calendar
year, the employer shall withhold the tax for the remainder of that
calendar year.
B. The employer shall withhold from the person, for the first payroll
period after receipt of the notification under the above paragraph,
a lump sum equal to the amount of the tax that was not withheld from
the person due to the exemption certificate filed by the person, plus
the per payroll amount due for that first payroll period.
C. 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.
5. In the event the employment of a person subject to withholding of
the local services tax under this exception is severed in that calendar
year, the person shall be liable for any outstanding balance of tax
due and the Township of Cumberland may pursue collection under this
act.
6. Except as provided for in Subsection
4 above, Employers shall not be responsible for investigating exemption certificates, monitoring tax exemption eligibility or exempting any employee from a local services tax.
7. Employers shall be responsible for retaining a copy of all exemption
certificates filed by employees within a given calendar year for a
minimum of three years. Employers who have failed to withhold the
local services tax from an employee or employees, and do not have
copies of the employee exemption certificate or certificates, will
be held responsible for the payment of the as if the tax had been
originally levied against the employer.
[Ord. 07-118, 12/27/2007, § 112]
All self-employed individuals and individuals whose employer
is not required to withhold local taxes (certain state and federal
agencies) will be billed quarterly for the local services tax. The
full amount of tax must be paid by the date indicated on such billing.
If such taxpayer qualifies for a low-income exemption, the taxpayer
may complete the required exemption certificate or make application
for a refund of the tax paid.
[Ord. 07-118, 12/27/2007, § 113]
All employers and self-employed individuals residing or having
their place of business outside the Township of Cumberland but who
engage in any occupation within the Township of Cumberland, do by
virtue thereof agree to be bound by and subject themselves to the
provisions, penalties and regulations promulgated under this Part
with the same force and effect as though they were residents of the
Township of Cumberland. Further, any individual engaged in an occupation
within the Township of Cumberland and an employee of a nonresident
employer may for the purpose of this Part be considered a self-employed
person and in the event this tax is not paid, the collector shall
have the option of proceeding against either the employer or employee
for collection of this tax as hereinafter provided.
[Ord. 07-118, 12/27/2007, § 114]
1. It shall be the duty of the collector to accept and receive payments
of this tax and 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. It shall be the duty of the collector to
accept and keep a record of the information submitted by employers
relating to the number of employees subject to the tax, the number
of employees exempt from the tax, the employee exemption certificates
and refunds of the tax paid to individuals and employers. It further
shall be the duty of the collector, on behalf of the Township of Cumberland,
to provide a taxpayer a receipt of payment upon written request of
the taxpayer.
2. The collector is hereby charged with the administration and enforcement
of this Part and is hereby empowered to prescribe, adopt, promulgate
and enforce rules and regulations relating to any matter pertaining
to the administration and enforcement of this Part, including provisions
for the examination of the payroll records of any employer subject
to this Part; the examination and correction of any return made in
compliance with this Part; 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 Adams County as in
other cases provided.
3. 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.
[Ord. 07-118, 12/27/2007, § 115]
1. In the event any of the tax under this Part remains due or unpaid
30 days after the due date set forth above, the collector may sue
for the recovery of such tax due or unpaid together with interest
and penalty.
2. If for any reason the tax is not paid when due, interest at the rate
of 6% per annum on the amount of said tax, and an additional penalty
of 10% shall be added to the flat rate of said tax for nonpayment
thereof. Where suit is brought for recovery of this tax, the individual
liable therefore shall, in addition, be responsible and liable for
the costs of collection, including, but not limited to, attorney's
fees.
[Ord. 07-118, 12/27/2007, § 116]
Whoever makes any false or untrue statement on any return required
by this Part, or who refuses inspection of his books, records or accounts
in his custody and control in order to determine the number of employees
subject to this tax who are in his employment, or who fails or refuses
to file any return required by this Part, or fails or refuses to pay
the tax herein levied shall, upon conviction, be sentenced to pay
a fine of not more than $600 plus costs and, in default of payment
of said fine and costs, be sentenced to a term of imprisonment not
to exceed 30 days. 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
refused to file a return required by this Part.
[Ord. 07-118, 12/27/2007, § 117]
1. Refunds are to be paid within 75 days of a refund request or 75 days
after the last day the employer is required to remit the for the last
quarter of the calendar year, under § 9 of Act 7, whichever
is later and shall not be subject to interest if paid within the allowed
time.
2. Refunds shall only be provided for amounts overpaid in a calendar
year that exceed $1.
A. Refund Due to Duplication of Payment. If at any time during the calendar
year a taxpayer pays more than $52 in combined local services tax,
the taxpayer may apply for a refund of the amount over $52. The proper
refund request form must be completed and signed by the taxpayer and
necessary documentation must be included. These refunds may be processed
at the time they are received, unless there is reason to believe the
Township of Cumberland will not receive the tax from the employer.
B. When an individual's "earned income and net profits" only, for
the calendar year is less than the $12,000 exemption at the end of
the calendar year, any taxpayer who qualifies may complete a refund
application and include a copy of the necessary documentation.