[Adopted 5-18-1970 by Ord. No. 228 (Part 3, Ch. 2, Art. C, §§ 3-2041 through 3-2060, of the 1985 Code of Ordinances)]
[Amended 7-2-2003 by Ord. No. 496]
A. 
Unless otherwise expressly stated, the following terms shall have, for the purpose of this article, the meanings ascribed to them in this section:
ASSOCIATION
A partnership, limited partnership, or any other unincorporated group of two or more persons.
BUSINESS
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.
CORPORATION
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.
CURRENT YEAR
The calendar year for which the tax is levied.
DOMICILE
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.
EARNED INCOME
(1) 
All salaries, wages, commissions, bonuses and incentive payments whether based on profits or otherwise, fees, tips and similar remuneration received for services rendered whether directly or through an agent and whether in cash or in property except income derived from the United States Government for active duty outside the Commonwealth of Pennsylvania as a member of its armed forces and other compensation as determined under Section 303 of the Tax Reform Code of 1971 and regulations in 61 Pa. Code Part I, Subpart B, Article V (relating to personal income tax).[1] Employee business expenses are allowable deductions as determined under Article III of the Tax Reform Code of 1971.[2] The amount of any housing allowance provided to a member of clergy shall not be taxable as earned income.
(2) 
The term "compensation" shall not mean or include:
(a) 
Periodic payments for sickness and disability other than regular wages received during a period of sickness or disability; or
(b) 
Disability, retirement or other payments arising under workmen's compensation acts, occupational disease acts and similar legislation by any government; or
(c) 
Payments commonly recognized as old age or retirement benefits paid to persons retired from service after reaching a specific age or after a stated period of employment; or
(d) 
Payments commonly known as "public assistance," or unemployment compensation payments by any governmental agency; or
(e) 
Payments to reimburse actual expenses; or
(f) 
Payments made by employers or labor unions, including payments made pursuant to a cafeteria plan qualifying under Section 125 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 125), for employee benefit programs covering hospitalization, sickness, disability or death, supplemental unemployment benefits or strike benefits, provided that the program does not discriminate in favor of highly compensated individuals as to eligibility to participate, payments or program benefits; or
(g) 
Any compensation received by United States servicemen serving in a combat zone; or
(h) 
Payments received by a foster parent for in-home care of foster children from an agency of the Commonwealth or a political subdivision thereof or an organization exempt from federal tax under Section 501(c)(3) of the Internal Revenue Code of 1954 which is licensed by the commonwealth or a political subdivision thereof as a placement agency; or
(i) 
Payments made by employers or labor unions for employee benefit programs covering social security or retirement; or
(j) 
Personal use of an employer's owned or leased property or of employer-provided services.
EARNED INCOME TAX COLLECTOR
Person, public employee or private agency designated by the Borough to collect and administer the tax on earned income and net profits.
EMPLOYER
A person, partnership, association, corporation, institution, governmental body or unit or agency, or any other entity employing one or more persons for salary, wage, commission or other compensation.
NET PROFITS
The net income from the operation of a business, profession, or other activity, except corporations, after provision for all costs and expenses incurred in the conduct thereof determined either on a cash or accrual basis in accordance with accepted accounting principles and practices but without deduction of taxes based on income or as otherwise determined under Section 303 of "The Tax Reform Code of 1971" and regulations in 61 Pa. Code Part I, Subpart B, Article V (relating to personal income tax).[3] 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 earnings generated from any monetary accounts or investment instruments off the farming business;
(2) 
Any gain on the sale of farm machinery;
(3) 
Any gain on the sale of livestock held 12 months or more for draft, breeding or dairy purposes; and
(4) 
Any gain on the sale of other capital assets of the farm.
NONRESIDENT
A person, partnership, association or other entity domiciled outside of the Borough.
PERSON OR INDIVIDUAL
A natural person.
PRECEDING YEAR
The calendar year before the current year.
RESIDENT
A person, partnership, association, or other entity domiciled in the Borough.
SUCCEEDING YEAR
The calendar year following the current year.
TAXPAYER
A person, partnership, association or other entity required hereunder to file a return of earned income or net profits or to pay a tax thereon.
[1]
Editor's Note: See 72 P.S. § 7303 and 61 Pa. Code § 101.1 et seq., respectively.
[2]
Editor's Note: See 72 P.S. § 7301 et seq.
[3]
Editor's Note: See 72 P.S. § 7303 and 61 Pa. Code § 101.1 et seq., respectively.
B. 
In this article, the singular shall include the plural and the masculine shall include the feminine and the neuter.
A tax for general purposes is hereby levied as follows:
A. 
One percent of all earned income earned on and after July 1, 1970 by residents and nonresidents of the Borough of Collegeville.
B. 
One percent of the net profits earned on and after July 1, 1970 of businesses, professions, and other activities conducted by residents and nonresidents of the Borough of Collegeville.
C. 
The tax levied under this article shall be applicable to earned income received and to net profits earned by residents in the period beginning July 1 of the current year and ending December 31 of the current year, or for taxpayers fiscal year beginning in the current year, and the tax shall continue in force on a calendar year basis or taxpayer fiscal year basis without annual re-enactment, unless the rate of the tax is subsequently changed. The Borough may by ordinance change the rate. Such change shall become effective on the date specified in the ordinance.
A. 
Tax on net profits.
(1) 
Beginning with the calendar year January 1, 1971 every taxpayer who makes any net profits shall on or before April 30 of the then current year and each year thereafter make and file with the Tax Collector a declaration of his estimated net profits during the period beginning January 1 and ending December 31 of the then current year. Taxpayer shall pay to the then Earned Income Tax Collector the total amount of tax determined to be due under the estimate as follows[1]:
(a) 
First payment on or before April 30 with declaration.
(b) 
Second payment on or before July 31.
(c) 
Third payment on or before October 31.
(d) 
Final payment with Final Return between January 1 and April 15.
[1]
Editor's Note: Original Subsection A(1), which immediately preceded this subsection and was only applicable to the period from 7-1-1970 through 12-31-1970, was repealed.
(2) 
If a taxpayer after the calendar year 1970 anticipates net profits after April 30 of the calendar year, then he shall make and file a declaration on or before July 31, October 31, and April 15 of the then current year whichever of these dates next follows the date on which the taxpayer first anticipates such net profits. Taxpayer shall pay to the Tax Collector in equal installments the amount of tax due thereon on or before the quarterly payment dates which remain after the filing of his first declaration.
(3) 
On April 15 of each calendar year every taxpayer shall file with the Tax Collector or a final income tax return showing the amount of the net profits earned during the period beginning (after 1970) January 1 of the then current year and ending December 31 of the then current year the total amount of tax due thereon and the total amount of tax heretofore paid with the estimated return. At the time of filing a final return taxpayer shall pay to the Earned Income Tax Collector the balance of tax due or shall make demand for a refund or credit in the case of any overpayment. Any taxpayer may in lieu of paying the fourth quarterly installment of his estimated tax elect to and make and file with the Tax Collector his final return on or before January 31 of the succeeding year and to pay the tax in full at that time.
(4) 
The Borough shall provide by regulation for the making and filing of adjusted declarations of estimated net profits for the payments of the estimated tax in cases where a taxpayer who has filed the declaration hereinabove required anticipates additional net profits not previously declared or finds that he has over-estimated his anticipated net profits.
(5) 
Discontinuance of business — If a taxpayer discontinues his business before September 30 of the current year he shall within 30 days after the discontinuance of the business file his final return as hereinabove required and pay the tax due or make demand for the refund or credit in the case of an overpayment.
B. 
Earned income.
(1) 
Annual earned income tax return — Every taxpayer shall, on or before April 15 of the succeeding year, make and file with the Earned Income Tax Collector on a form prescribed, prepared and supplied by the Earned Income Tax Collector, a final return showing the total amount of earned income received during the period beginning July 1, 1970 and ending December 31, 1970 for the current year and for each year thereafter for the period beginning January 1 and ending December 31, the total amount of tax due thereon, the amount of the tax thereon that has been withheld in the event the provisions relating to withholding hereinafter set forth have been invoked by the Borough and the balance of the tax due. At the time of the filing of the final return the taxpayer shall pay the balance of the tax due or may make a demand for refund or credit in the case of an overpayment.[2]
[2]
Editor's Note: Original Subsection B(2), which immediately followed this subsection and applied only to earned income not subject to withholding earned from 7-1-1970 through 12-31-1970, was repealed.
(2) 
After the calendar year 1970 every taxpayer who is employed for salary, wage, commission or other compensation who received any earned income not subject to the provisions relating to collection at the source, shall make and file with the Earned Income Tax Collector on a form prepared, supplied and prescribed by the Earned Income Tax Collector a quarterly return 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 setting forth the aggregate amount of earned income not subject to withholding by him during the three-month period 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 the tax together with such other information as the Earned Income Tax Collector shall require. Every taxpayer who makes such a return shall at the time of the filing of the return with the Earned Income Tax Collector pay to the collector the amount of the tax shown as due thereon.
A. 
Every employer as hereinbefore described and defined, shall be obligated from July 1, 1970 and thereafter so long as this article is in effect to withhold from wages of employees subject to the tax imposed by this article, the amount of tax due in accordance with the withholding procedure set forth hereinafter.
B. 
Every employer having an office, factory, workshop, branch, warehouse or other place of business within the Borough, who employs one or more persons, other than domestic servants, for salary, wage, commission or other compensation, who has not previously registered, shall within 15 days after becoming an employer, register with the Earned Income Tax Collector his name and address and such other information as the officer may require.
C. 
Every employer having an office, factory, workshop, branch, warehouse or other place of business within the Borough who employs one or more persons other than domestic servants for salary, wage, commission or other compensation, shall deduct at the time of payment thereof, the 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 return and pay to the Earned Income Tax Collector the amount of taxes deducted during the preceding 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. Such return, unless otherwise agreed upon between the Earned Income Tax Collector and employer, shall show the name and social security number or identification number supplied by the Tax Collector of each such employee, the earned income of such employee during such preceding three-month period, the tax deducted therefrom, the political subdivisions imposing the tax, the total earned income of all such employees during such preceding three-month period, and the total tax deducted therefrom and paid with the return.
D. 
Monthly reporting. Any employer who for two of the preceding four quarterly periods has failed to deduct the proper tax, or any part thereof, or has failed to pay over the proper amount of tax to the Borough, may be required by the earned income Tax Collector to file his return and pay the tax monthly. In such cases, payments of tax shall be made to the Earned Income Tax Collector on or before the last day of the month succeeding the month for which the tax was withheld.
E. 
On or before February 28 of the succeeding year, every employer shall file with the Earned Income Tax Collector:
(1) 
An annual return showing the total amount of earned income paid, the total amount of earned income paid, the total amount of tax deducted, and the total amount of tax paid to the Earned Income Tax Collector for the period beginning January 1 of the current year and ending December 31 of the current year. (July 1, 1970 to December 31, 1970 for the first year.)
(2) 
A return withholding statement 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, social security number or identification number supplied by the Tax Collector, the amount of earned income paid to the employee during said period, the amount of tax deducted, the political subdivision imposing the tax upon such employee, the amount of tax paid to the Earned Income Tax Collector. Every employer shall furnish two copies of the individual return to the employee for whom it is filed.
F. 
Termination of business. Every employer who discontinues business for any reason 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.
G. 
Every employer who willfully or negligently fails or omits to make the deductions required by this section shall be liable for the payments of the taxes which he was required to withhold to the extent that such taxes have not been recovered from the employee.
H. 
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 or from complying with the requirements of this article to the filing of declarations and returns.
A. 
The office of Earned Income Tax Collector is created by this article and the Borough shall from time to time by separate ordinance appoint a person or company to administer the provisions of this article who will be designated the "Earned Income Tax Collector."
B. 
The Earned Income Tax Collector shall be bonded as Council may determine, said bond to cover all moneys coming into his hands on behalf of the Borough, the costs of the bond to be paid by the Borough. Before entering upon his official duties, the Earned Income Tax Collector shall give and acknowledge the bond to the Borough. That bond shall be in compliance with Act 511 in all respects and subject to the approval of the Borough Solicitor.
C. 
The Earned Income Tax Collector shall collect and receive all such taxes, shall furnish a receipt for payment when requested to do so by a taxpayer, and shall keep a record showing the amount received by him for each taxpayer under this article, together with the date of the receipt of such payment.
D. 
The Earned Income Tax Collector is empowered to prescribe rules and regulations relating to any matter or thing pertaining to the administration and enforcement of the provisions of this article, subject, however, to the approval of council. Those regulations shall be inscribed by the Earned Income Tax Collector into a book kept for that purpose and open to the inspection of the public and thereupon shall have the same force and effect as if it had been incorporated into this article.
E. 
The Earned Income Tax Collector, or any other person designated by the Borough is authorized to examine any of the books, papers, and records of any employer, supposed employer, taxpayer in order to verify the accuracy of any return made, or if no return is made, to ascertain the amount of tax due by any person under this article. Every such employer, supposed employer, taxpayer, or supposed taxpayer shall give to the Earned Income Tax Collector or such other authorized person the means, facilities and opportunities for such examination and investigations authorized by the subsection.
F. 
The Earned Income Tax Collector is authorized to examine any person under oath concerning any income which was or should have been returned for taxation, and shall have the power and is hereby authorized to issue subpoenas to compel the attendance of persons whom he deems necessary to examine as witnesses, and to compel the production of books, records and papers relating to any account being examined.
G. 
The Earned Income Tax Collector, or any other official agent of the Borough, shall have the power to reexamine returns, correct erroneous returns, consent to make refunds, and authorize the refunding of taxes erroneously or improperly collected from or paid by, the taxpayers, for any period of time not to exceed six years subsequent to the date of payment of the sum involved.
H. 
Any information gained by the Earned Income Tax Collector or any other official or agent of the Borough, as a result of any return, investigation, hearing or examination required or authorized by this article shall become confidential except for official purposes, or except in accordance with proper judicial order, or as otherwise provided by law. Any disclosure of any such information, contrary to the provisions of this section, shall constitute a violation of this article.
I. 
Any person who, except as permitted by the provisions of the foregoing Subsection H of this section, divulges any information which is confidential under the provisions of this article shall, upon conviction thereof before any Magisterial District Judge, or court of competent jurisdiction be sentenced to pay a fine of not more than $500 for each offense and costs, and in default of payment of such fine and costs, to be imprisoned for a period not exceeding 30 days.
A. 
The Earned Income Tax Collector may sue in the name of the Borough 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, within three years after the declaration or return has been filed, 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 Earned Income Tax Collector, reveals a fraudulent evasion of taxes, there shall be no limitation.
(3) 
In the case of substantial understatement of tax liability, 25% or more, and no fraud, suit shall be begun within six years.
(4) 
Where any person has deducted taxes under the provisions of this article and has failed to pay the amount so deducted to the Earned Income Tax Collector, or where any person willfully failed or omitted to make the deductions required by this article, there shall be no limitation.
(5) 
This article shall not be construed to limit Council from recovering the delinquent taxes by any other means provided in the Local Tax Enabling Act.[1]
[1]
Editor's Note: See 53 P.S. § 6924.101 et seq.
C. 
The Earned Income Tax Collector may sue for recovery of an erroneous refund, provided 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.
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 1/2 of 1% of the amount of the unpaid tax for each month or fraction thereof during which the tax remains unpaid shall be added and collected. Where suit is brought for the recovery of any such tax the person liable therefor shall, in addition, be liable for legal costs of collection and for interest and penalties herein imposed.
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 taxes deducted from his employees, or fails, neglects or refuses to deduct withholding taxes from his employees, any person who refuses to permit the Earned Income Tax Collector or any agent designated by him to examine his books, records and papers and any person who knowingly makes any incomplete, false or fraudulent return, or 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 ordinance shall, upon conviction thereof, before any Magisterial District Judge, or court of competent jurisdiction, be sentenced to pay a fine of not more than $500 for each offense and costs, and, in default of payment of such fine and cost to be imprisoned for a period not exceeding 30 days.
B. 
The penalties imposed under this section shall be in addition to any other penalty imposed by any other section of this article.
C. 
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 from making such declaration or return.
This article shall not apply to: personal property or persons to whom or which is beyond the legal power of the Borough to impose the tax herein provided; the net profits of any institution, organization, trust, association or foundation operated for public, religious, educational or charitable purposes; provided that this subsection shall not operate to relieve or exempt any such entity from collection at source of earned income of its employees and remittance of such collections to the Earned Income Tax Collector.