[Adopted 11-14-2011 by Ord. No. 2011-217]
This article shall be known as the "Carroll Township Earned
Income and Net Profits Tax Ordinance."
A.
It is the intent and purpose of this article to include all of the
applicable language and provisions of 53 P.S. § 6924.501
et seq., the Act of General Assembly of July 2, 2008 (P.L. 197) and
known as Act No. 32, as may be amended and supplemented from time
to time. In all enforcement of the administration of this article,
the language and intent of the Act, as amended, shall take precedence.
B.
The tax imposed by this article shall be collected and administered
in accordance with: all applicable laws and regulations; and regulations,
policies and procedures adopted by the TCC or Tax Officer. This includes
any regulations, policies and procedures adopted in the future to
the maximum extent allowed by 1 Pa.C.S.A. § 1937.
All words and phrases shall have the meanings as set forth in
Act 32, as amended. The following words and phrases, when used in
this article, shall have the meanings ascribed to them as follows:
An enterprise, activity, profession or any other undertaking
of an unincorporated nature conducted for profit or ordinarily conducted
for profit, whether by a person, partnership, association or any other
entity.
A sole proprietorship, corporation, joint-stock association
or company, partnership, limited partnership, limited-liability company,
association, business trust, syndicate or other commercial or professional
activity organized under the laws of this commonwealth or any other
jurisdiction.
A corporation or joint-stock association organized under
the laws of the United States, the Commonwealth of Pennsylvania or
any other state, territory, foreign country or dependency. This term
shall include an entity which is classified as a corporation for federal
income tax purposes.
The calendar year for which the tax is levied.
The Pennsylvania Department of Community and Economic Development
or successor agency charged with any duties under the Act, as may
be amended and supplemented.
The place where one lives and has his permanent home and
to which he has the intention of returning whenever he is absent.
Actual residence is not necessarily domicile, for domicile is the
fixed place of abode which, in the intention of the taxpayer, is permanent
rather than transitory. "Domicile" is the place in which a man has
voluntarily fixed the habitation of himself and his family, not for
a mere special or limited purpose, but with the present intention
of making a permanent home, until some event occurs to induce him
to adopt some other permanent home. In the case of businesses or associations,
the domicile is that place considered as the center of business affairs
and the place where its functions are discharged.
The compensation as required to be reported to or as determined
by the Pennsylvania Department of Revenue under § 303 of
the Act of March 4, 1971 (P.L. 6, No. 2), known as the "Tax Reform
Code of 1971,"[1] and rules and regulations promulgated under that section. For purposes of earned income, employee business expenses are allowable deductions as determined under Article III of the Tax Reform Code of 1971. The term does not include offsets for business losses. The amount of any housing allowance provided to a member of the clergy shall not be taxable as earned income.
The tax levied herein by municipality on earned income and
net profits. Also referred to as "tax" herein.
A person, business entity or other entity employing one or
more persons for a salary, wage, commission or other compensation.
The term includes the commonwealth, a political subdivision and an
instrumentality or public authority of either. For purposes of penalties
hereunder, this term includes a corporate officer.
A city of the second class, city of the second class A, city
of the third class, borough, town, township of the first class or
township of the second class. For purposes of this article, such term
shall mean "Carroll Township, York County, Pennsylvania."
The net income from the operation of a business, except corporations
as required to be reported to or as determined by the Department of
Revenue under § 303 of the Act of March 4, 1971 (P.L. 6,
No. 2), known as the "Tax Reform Code of 1971,"[2] and rules and regulations in promulgated under such section.
The term does not include income: which is not paid for services provided;
and which is in the nature of earnings from an investment. Further,
the term shall not include:
A person, partnership, association or other entity domiciled
outside of the municipality.
A natural person.
The calendar year before the current year.
A person, partnership, association or other entity domiciled
in the municipality.
The calendar year following the current year.
A public nonprofit entity established by a TCC for the administration
and collection of earned income and net profits tax.
The committee established to govern each tax collection district
for the purpose of income tax collection. This term shall include
a joint tax collection committee.
The York Tax Collection District as established under the
Act.
A political subdivision, public employee, tax bureau, county,
excluding a county of the first class, or private agency which administers
and collects earned income and net profits for one or more tax collection
district. Unless otherwise specifically provided, for purposes of
the obligations of an employer, the term shall mean the Tax Officer
or Tax Collector for the tax collection district within which the
employer is located, or if an employer maintains workplaces in more
than one tax collection district, the Tax Officer for each such tax
collection district with respect to employees principally employed
therein.
A person or business required hereunder to file a return
of earned income or net profits or to pay a tax thereon.
A.
A tax of 1/2 of 1% for general revenue purposes is hereby imposed
on earned income and net profits earned by residents of the municipality.
[Amended at time of adoption of Code (see Ch. 1, General
Provisions, Art. I)]
B.
A tax of 1% for general revenue purposes is hereby imposed on earned
income and net profits earned by nonresidents, exclusive of domestic
servants and Maryland residents.
C.
The earned income and net profits tax levied under this article shall
be applicable to earned income received and to net profits earned
during the period beginning January 1 of the current year and ending
December 31 of the current year or for taxpayer fiscal years beginning
in the current year. The earned income and net profits tax shall continue
in force on a calendar year or taxpayer fiscal-year basis without
the need for annual enactment or reenactment, unless the rate of the
tax is subsequently changed. For a taxpayer whose fiscal year is not
a calendar year, the Tax Officer shall establish deadlines for filing,
reporting and payment of taxes which provide time periods equivalent
to those provided for a calendar year taxpayer.
A.
Application.
(1)
Income taxes shall be applicable to taxable income earned or received
based on the method of accounting used by the taxpayer in the period
beginning January 1 of the current year and ending December 31 of
the current year; except that taxes imposed for the first time and
changes to existing tax rates shall become effective on January 1
or July 1, as specified in this article, and the tax shall continue
in force on a calendar year or taxpayer fiscal-year basis, without
annual reenactment, unless the rate of the tax is subsequently changed.
(2)
For a taxpayer whose fiscal year is not a calendar year, the Tax
Officer shall establish deadlines for filing, reporting and payment
of taxes which provide time periods equivalent to those provided for
a calendar-year taxpayer.
B.
Partial domicile. The taxable income subject to tax of a taxpayer
who is domiciled in a political subdivision for only a portion of
the tax year shall be an amount equal to the taxpayer's taxable
income multiplied by a fraction, the numerator of which is the number
of calendar months during the tax year that the individual is domiciled
in the political subdivision, and the denominator of which is 12.
A taxpayer shall include in the numerator any calendar month during
which the taxpayer is domiciled for more than half the calendar month.
A day that a taxpayer's domicile changes shall be included as
a day the individual is in the new domicile and not the old domicile.
If the number of days in the calendar month in which the individual
lived in the old and new domiciles are equal, the calendar month shall
be included in calculating the number of months in the new domicile.
C.
Declaration and payment. Except as provided in Subsection A(2), taxpayers shall declare and pay income taxes as follows:
(1)
Every taxpayer shall, on or before April 15 of the succeeding year, make and file with the resident Tax Officer, a final return showing the amount of taxable income received during the period beginning January 1 of the current year and ending December 31 of the current year, the total amount of tax due on the taxable income, the amount of tax paid, the amount of tax that has been withheld under § 347-37 below and the balance of tax due. All amounts reported shall be rounded to the nearest whole dollar. At the time of filing the final return, the taxpayer shall pay the Tax Officer the balance of the tax due or shall make demand for refund or credit in the case of overpayment.
(2)
Making and filing of declarations and returns; payment.
(a)
Every taxpayer making net profits shall, by April 15 of the
current year, make and file with the Tax Officer a declaration of
the taxpayer's estimated net profits during the period beginning
January 1 and ending December 31 of the current year, and shall pay
to the Tax Officer in four equal quarterly installments the tax due
on the estimated net profits. The first installment shall be paid
at the time of filing the declaration, and the other installments
shall be paid on or before June 15 of the current year, September
15 of the current year and January 15 of the succeeding year, respectively.
(b)
Any taxpayer who first anticipates any net profit after April
15 of the current year, shall make and file the declaration required
on or before June 15 of the current year, September 15 of the current
year or December 31 of the current year, whichever date next follows
the date on which the taxpayer first anticipates such net profit,
and shall pay to the Tax Officer in equal installments the tax due
on or before the quarterly payment dates that remain after the filing
of the declaration.
(c)
Every taxpayer shall, on or before April 15 of the succeeding
year, make and file with the Tax Officer a final return showing the
amount of net profits earned or received based on the method of accounting
used by the taxpayer during the period beginning January 1 of the
current year, and ending December 31 of the current year, the total
amount of tax due on the net profits and the total amount of tax paid.
At the time of filing the final return, the taxpayer shall pay to
the Tax Officer the balance of tax due or shall make demand for refund
or credit in the case of overpayment. Any taxpayer may, in lieu of
paying the fourth quarterly installment of the estimated tax, elect
to make and file with the Tax Officer on or before January 31 of the
succeeding year, the final return.
(d)
The Department, in consultation with the Department of Revenue,
shall provide by regulation for the filing of adjusted declarations
of estimated net profits and for the payments of the estimated tax
in cases where a taxpayer who has filed the declaration required under
this subsection anticipates additional net profits not previously
declared or has overestimated anticipated net profits.
(e)
Every taxpayer who discontinues business prior to December 31
of the current year, shall, within 30 days after the discontinuance
of business, file a final return as required under this article and
pay the tax due.
(3)
Every taxpayer who receives any other taxable income not subject
to withholding under § 512(3) of the Act[1] shall make and file with the resident Tax Officer a quarterly
return on or before April 15 of the current year, June 15 of the current
year, September 15 of the current year, and January 15 of the succeeding
year, setting forth the aggregate amount of taxable income not subject
to withholding by the taxpayer during the three-month periods ending
March 31 of the current year, June 30 of the current year, September
30 of the current year, and December 31 of the current year, respectively,
and subject to income tax, together with such other information as
the Department may require. Every taxpayer filing a return shall,
at the time of filing the return, pay to the Tax Officer the amount
of income tax due. The Department shall establish criteria under which
the Tax Officer may waive the quarterly return and payment of the
income tax and permit a taxpayer to file the receipt of taxable income
on the taxpayer's annual return and pay the income tax due on
or before April 15 of the succeeding year.
[1]
Editor's Note: See 53 P.S. § 6924.512(a)(3).
(4)
The TCC may, by regulation, waive the requirements for a quarterly
return and payment of income tax under specified circumstances, including
those instances where a taxpayer's annual taxable income is less
than a specified amount.
A.
Every employer having an office, factory, workshop, branch, warehouse
or other place of business within the municipality, having imposed
a tax on earned income or net profits within its municipal boundaries
who employs one or more persons, other than domestic servants, for
a salary, wage commission or other compensation who has not previously
registered shall within 15 days after becoming an employer, register
with the Tax Officer or other designated Tax Officer, his/her or its
name and address and such other information as the Department or Tax
Officer may require.
B.
Every employer shall require each new employee to complete a certificate
of residency form, which form shall be an addendum to the Federal
Employee's Withholding Allowance Certificate (Form W-4 or successor
form). An employer shall also require any employee who changes their
address or domicile to complete a certificate of residency form, which
forms are available from the Department or the Tax Officer upon request.
The purpose of said form shall be to help identify the political subdivision
where an employee lives and works.
A.
Every employer having an office, factory, workshop, branch, warehouse
or other place of business within the municipality imposing a tax
on earned income or net profits within the municipality who employs
one or more persons, exclusive of domestic servants and Maryland residents,
for a salary, wage, commission or other compensation shall deduct
at the time of payment thereof the greater of the employee's
resident tax or the employee's nonresident tax imposed by this
article on the earned income due to his employee or employees and
shall, on or before April 30 of the current year, July 31 of the current
year, October 31 of the current year and January 31 of the succeeding
year, file a quarterly return and pay to the Tax Officer the amount
of taxes deducted during the preceding quarterly periods ending March
31 of the current year, June 30 of the current year, September 30
of the current year and December 31 of the current year, respectively.
Such return, unless otherwise agreed upon between the Tax Officer
and employer, shall show the name and social security number of each
such employee, the compensation of such employee during such preceding
three-month period, the tax deducted therefrom, the political subdivisions
imposing the tax upon such employee, the total compensation of all
such employees during such preceding quarterly period and the total
tax deducted therefrom and paid with the return as well as any other
information prescribed by the Department or the Tax Officer.
B.
Any employer who, for two of the preceding four quarterly periods,
has failed to deduct the proper tax or any part thereof or who has
failed to pay over the proper amount of tax to the Tax Officer may
be required by the Tax Officer to file his return and pay the tax
monthly. In such cases, payments of tax shall be made to the Tax Officer
on or before the last day of the month succeeding the month for which
the tax was withheld.
C.
Notwithstanding the provisions of Subsection A above, the provisions of this Subsection C shall apply if any employer has more than one place of employment in more than one tax collection district. Within 30 days following the last day of each month, the employer may file the return required by Subsection A above and pay the total amount of tax due from employees in all work locations during the preceding month to the Tax Officer for either the tax collection district in which the employer's payroll operations are located or as determined by the Department. The return and tax deducted shall be filed and paid electronically. The employer must file a notice of intention to file combined returns and make combined payments with the Tax Officer for each place of employment at least one month prior to filing its first combined return or making its first combined payment. This subsection shall not be construed to change the location of an employee's place of employment for purposes of nonresident tax liability.
D.
On or before February 28 of the succeeding year, every employer shall
file with the Tax Officer or other designated Tax Officer to whom
tax, which has been deducted, has been remitted as required herein:
(1)
An annual return showing the total amount of compensation paid, the
total amount of tax deducted, the total amount of tax paid to the
Tax Officer for the period beginning January 1 of the current year
and ending December 31 of the current year, and any other information
prescribed by the Department.
(2)
An individual withholding statement which may be integrated with
the Federal Wage and Tax Statement (Form W-2 or successor form), for
each employee employed during all or any part of the period beginning
January 1 of the current year and ending December 31 of the current
year, setting forth the employee's name, address and social security
number, the amount of compensation paid to the employee during said
period, the amount of tax deducted, the numerical code prescribed
by the Department representing the tax collection district where payments
required herein were remitted and any other information required by
the Department or the Tax Officer and the amount of tax paid to the
Tax Officer. Every employer shall furnish two copies of the individual
return to the employee for whom it is filed.
E.
Every employer who discontinues business prior to December 31 of
the current year shall, within 30 days after the discontinuance of
business, file the returns and withholding statements hereinabove
required and pay the tax due.
F.
Except as otherwise provided for in § 511 of the Act,[1] every employer who willfully or negligently fails or omits
to make the deductions required by this section shall be liable for
payment of the taxes which the employer is required to withhold to
the extent that such taxes have not been recovered from the employee.
The failure or omission of any employer to make the deductions required
by this section shall not relieve any employee from the payment of
the tax of from complying with the requirements of this article relating
to the filing of declarations and returns.
[1]
Editor's Note: See 53 P.S. § 6924.511.
G.
No employer shall be required to deduct or withhold taxes, file returns
or pay taxes with regard to residents of Maryland.
A.
It shall be the duty of the Tax Officer to collect and receive the
taxes, fines and penalties imposed by this article. It shall also
be the Tax Officer's duty to keep a record showing the amount
of tax received from each taxpayer paying the tax and the date of
such receipt.
B.
Each Tax Officer, before entering upon official duties, shall give
and acknowledge a bond to the TCC appointing such Tax Officer. The
bond provided shall be subject to the requirements set forth in the
Act.
C.
The Tax Officer shall comply with all resolutions, policies and procedures
adopted by the tax collection committee and shall comply with all
regulations adopted by the Department under the Act.
D.
The Tax Officer shall refund, on petition of and proof by the taxpayer,
earned income tax paid on the taxpayer's ordinary and necessary
business expenses to the extent that such expenses are not paid by
the taxpayer's employer.
E.
The Tax Officer and agents designated by him/her/it are hereby authorized
to examine the books, papers and records of any employer or of any
taxpayer or of any person whom the Tax Officer reasonably believes
to be an employer or taxpayer in order to verify the accuracy of any
declaration or return or, if no declaration or return was filed, to
ascertain the tax due. Every employer and every taxpayer and every
person whom the Tax Officer reasonably believes to be an employer
or taxpayer is hereby directed and required to give to the Tax Officer
or to any agent designated by him any means, facilities and opportunity
for such examination and investigations as are hereby authorized.
Such examination or audits shall be conducted by the Tax Officer and
any agents designated by the Tax Officer shall be conducted in accordance
with 53 Pa.C.S.A., Chapter 84, Subchapter C (relating to the local
taxpayers bill of rights).
F.
Any information gained by the Tax Officer, his/her/its agents or
by any other official or agent of the taxing district as a result
of any declarations, returns, investigations, hearings or verifications
required or authorized by this article shall be and remain confidential,
except for official purposes and except in accordance with a proper
judicial order or as otherwise provided by law.
G.
The Tax Officer is authorized to establish different filing, reporting
and payment dates for taxpayers whose fiscal years do not coincide
with the calendar year, provided that any filing, reporting or payment
dates shall provide time periods equivalent to those time periods
set forth for taxpayers whose fiscal year coincides with a calendar
year.
A.
The Tax Officer may sue in the name of the political subdivision
within the TCD for the recovery of taxes due and unpaid under this
article.
B.
Any suit brought to recover the tax imposed by this article shall
be begun within three years after: such tax is due; or the declaration
or return has been filed; or a redetermination of compensation or
net profits by the Pennsylvania Department of Revenue, whichever date
is later; provided, however, that this limitation shall not prevent
the institution of a suit for the collection of any tax due or determined
to be due in the following cases:
(1)
Where no declaration or return was filed by any person although a
declaration or return was required to be filed by him under provisions
of this article, there shall be no limitation.
(2)
Where an examination of the declaration or return filed by any person
or of other evidence relating to such declaration or return in the
possession of the Tax Officer reveals a fraudulent evasion of taxes,
there shall be no limitation.
(3)
Where any person has deducted taxes under the provisions of this
article and has failed to pay the amounts so deducted to the Tax Officer
or where any person has willfully failed or omitted to make the deductions
required by this article, there shall be no limitation.
(4)
Where an employer has intentionally failed to make deductions required
by this article.
(5)
In the case of substantial understatement of tax liability of 25%
or more and no fraud, suit shall be begun within six years.
C.
The Tax Officer may sue for recovery of an erroneous refund, provided
that such suit is begun two years after making such refund, except
that the suit may be brought within five years if it appears that
any part of the refund was induced by fraud or misrepresentation of
material fact.
D.
This section shall not be construed to limit the municipality from
recovering delinquent taxes by any other means provided by the Act.
Further, nothing set forth herein shall be construed to limit a Tax
Officer, a tax collection district or political subdivision from recovering
delinquent taxes by any other means provided by the Act.
A.
Except as may be provided for in Subsection B below, in the event any tax imposed in this article is not paid when due, interest shall accrue at the same rate a taxpayer is required to pay to the commonwealth as provided in § 806 of the Act of April 9, 1929 (P.L. 343, No. 176), known as the Fiscal Code,[1] or such successor legislation, on the amount of said tax
and an additional penalty of 1% of the unpaid tax for each month or
fraction thereof during which the tax remains unpaid shall be added
and collected but the amount of penalty shall not exceed 15% in the
aggregate. Where an action is brought for the recovery of tax, the
taxpayer liable for the tax shall, in addition, be liable for the
costs of collection, interest and penalties, including, but not limited
to court costs and attorneys' fees.
[1]
Editor's Note: See 72 P.S. § 806.
B.
Pursuant to the Act, the Department may establish conditions under
which a Tax Officer, with the concurrence of the TCC, may abate interest
or penalties that would otherwise be imposed for the nonreporting
or underreporting of income tax liabilities or for nonpayment of taxes
previously imposed and due if the taxpayer files delinquent returns
and pays the tax in full.
C.
The provisions of Subsection B above shall not affect or terminate any petitions, investigations, prosecutions or other proceedings pending under this article, or prevent the commencement of further prosecution of any proceedings by the appropriate authorities for violations of this article. However, no proceedings shall be commenced on the basis of delinquent returns filed pursuant to § 347-40 above if the returns are determined to be substantially true and correct and the tax due is paid within the prescribed time.
A.
Any person who fails, neglects or refuses to make any declaration
or return required by this article, any employer who fails, neglects
or refuses to register or to pay the tax deducted from his employees
or fails, neglects or refuses to deduct or withhold the tax from his
employees, any person who refuses to permit the Tax Officer or any
agent designated by him to examine his books, records, papers and
any person who knowingly makes any incomplete, false or fraudulent
return or attempts to do anything whatsoever to avoid the full disclosure
of the amount of his net profits or earned income in order to avoid
the payment of the whole or any part of the tax imposed by this article
shall, upon conviction thereof, be sentenced to pay a fine of not
more than $2,500 for each offense and costs and, in default of payment
of said fine and costs, to be imprisoned for a period not exceeding
six months.
B.
Any employer who is required under this article to collect, account
for and distribute taxes and who willfully fails to collect or truthfully
account for and distribute such tax, commits a misdemeanor and shall,
upon conviction, be sentenced to pay a fine not exceeding $25,000
or to imprisonment not exceeding two years or both.
C.
Any person who divulges any information which is confidential under
the provisions of this article shall, upon conviction thereof, be
sentenced to pay a fine of not more than $2,500 for each offense and
costs or to imprisonment for not more than one year, or both.
D.
The penalties imposed under this section shall be in addition to
any other penalty imposed by any other section of this article.
E.
The failure of any person to receive or procure forms required for
making the declaration or returns required by this article shall not
excuse him or her from making such declaration or return.
F.
The Carroll Township hereby approves and adopts the Cost of Collection
Schedule, attached hereto and made a part hereof,[1] to be imposed by the designated Tax Officer for the collection
of taxes on earned income and net profits, upon any taxpayer whose
taxes are or become delinquent and/or remain due and unpaid; provided,
however, that the TCC may approve amendments to said fee schedule
by resolution from time to time. Amendments to the collection schedule
shall become effective upon adoption by the TCC. The designated Tax
Officer is hereby authorized to retain such costs of collection as
set forth in the attached schedule, as may be amended and supplemented
from time to time, in recovering delinquent taxes and as permitted
to be assessed to delinquent taxpayers pursuant to law.
[1]
Editor's Note: Said schedule is on file in the Township.
This article shall not apply to any person or property as to
whom or which it is beyond the legal power of the municipality to
levy, assess and impose the tax or duties as herein provided.
The primary purpose of this article is to conform the local
income tax currently levied on earned income and net profits by the
municipality with the Act and to do so within the time frame set forth
in the Act. Any prior ordinance levying such tax is hereby amended
and restated in its entirety to read as set forth in this article.
To the extent that any previous ordinance or portion thereof is inconsistent
or conflicts with this article, such ordinance(s) or portion thereof
shall be repealed to the extent of such inconsistency and/or conflict.
To the extent the same or any prior ordinance levying such tax in
force immediately prior to enactment of this article, this article
is intended as a continuation of such prior ordinance and not as the
enactment of an ordinance imposing a new tax. In the event this article
or any portion thereof is determined to be unconstitutional or otherwise
invalid, the prior ordinance, or portion thereof, levying a similar
tax shall remain in full force and effect and shall not be affected
by the adoption of this article. Nothing contained herein shall affect,
impair or otherwise abrogate any act done or liability incurred, nor
shall any provision of this article affect, impair or preclude any
suit or prosecution pending, whether or not currently initiated, to
enforce any right, penalty or violation under the authority of any
previous ordinance in force prior to adoption of this article.
The effective date of this article and beginning of the initial
current year shall be January 1, 2012.
