[Adopted 11-28-1989 by Ord. No. 89-9 (Ch. 24, Part 1, of the 1995 Code
of Ordinances); amended in its entirety at time of adoption of Code
(See Ch. 1, General Provisions, Art. I)]
This article shall be known as the "Warrington Township Earned
Income and Net Profits Tax Ordinance," referred to herein as "this
article."
This article is adopted pursuant to and under the enabling authority
of the Local Tax Enabling Act, 53 P.S. § 6924.101 et seq.
and the Act of General Assembly of July 2, 2008 (P.L. 197) known as
Act No. 32.
A.
The primary purpose of this article is to conform the local income
tax currently levied by Warrington Township on earned income and net
profits with the Act. It is the intent of this article to include
all of the applicable language and provisions of 53 P.S. § 6924.101
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 administration and enforcement 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 Tax Collection Committee (as
herein defined) 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 Section 303 of the Act of March 4, 1971 (P.L. 6, No. 2), known as the "Tax Reform Code of 1971," 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: wages and compensation paid to individuals on active military service regardless of whether it is earned for active military service inside or outside the commonwealth; 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 the 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 Warrington Township, Bucks 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 Section 303 of the Act of March 4, 1971 (P.L. 6, No.
2), known as the "Tax Reform Code of 1971," and rules and regulations
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 Bucks County 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
districts. 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% for general revenue purposes is hereby imposed on earned
income and net profits earned by residents of the municipality. Where
a resident's school district also imposes an earned income tax, the
effective Township tax rate is 0.5%.
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.
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 year 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.
(1)
Calendar year. For a taxpayer whose fiscal year is a calendar year,
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)
Taxpayer fiscal year. 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.
(3)
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 is equal, the calendar month shall be
included in calculating the number of months in the new domicile.
Except as provided in § 98-33C, taxpayers shall declare
and pay income taxes as follows:
A.
Taxable income. 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
§ 98-36 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.
B.
Net profits.
(1)
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
July 15 of the current year, October 15 of the current year and January
15 of the succeeding year, respectively.
(2)
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 July 15 of the current year, October 15 of the current year
or January 15 of the succeeding 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.
(3)
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.
(4)
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.
(5)
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.
C.
Other taxable income. Every taxpayer who receives any other taxable
income not subject to withholding under Section 512(3) of the Act
shall make and file with the resident Tax Officer a quarterly return
on or before April 15 of the current year, July 15 of the current
year, October 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.
D.
Waiver. 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.
Employer registration. Every employer having an office, factory,
workshop, branch, warehouse or other place of business within Warrington
Township, 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
and who has not previously registered shall, within 15 days after
becoming an employer, register with the Tax Officer the name and address
of the employer and such other information as the Department or Tax
Officer may require.
B.
Employee certificate of residency. 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 his/her address or domicile to complete a
certificate of residency form, which form is 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 Warrington Township (having imposed
a tax on earned income or net profits within the municipality), who
employs one or more persons, exclusive of domestic servants, 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, address 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 case, payment 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 C 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 Section 511 of the Act, 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 or from complying with the requirements of this article relating to the filing of declarations and returns.
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.
The 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 TCC 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, records and relevant federal or state
tax returns, accompanying schedules or supporting documentation 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 and investigations shall be conducted
by the Tax Officer and any agents designated by the Tax Officer 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, the Tax Officer's designated
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 Warrington Township within
the TCD for the recovery of taxes due and unpaid under this article.
B.
Except as provided otherwise in this section, any suit brought to
recover the tax imposed by this article shall be begun within three
years after such tax is due; 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 under the provisions
of this article.
(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.
(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.
(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 not involving or revealing fraud; provided, however, that
such suit is begun within six years.
C.
The Tax Officer may sue for recovery of an erroneous refund; provided,
however, 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 Board of Supervisors
of Warrington Township 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 or TCD 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 Section 806 of the Act of April 9, 1929 (P.L. 343, No. 176), known as the Fiscal Code, 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.
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 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 § 98-38 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, keep or supply records or returns 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 the Tax Officer
to examine his/her 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/her 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.
The penalties imposed under this section shall be in addition to
any other penalty imposed by any other section of this article.
D.
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.
E.
Warrington Township hereby approves and adopts the Cost of Collection
Schedule, attached hereto and made a part hereof and to include any
amendments thereto as may be adopted by resolution of the TCC from
time to time, to be imposed by the designated Tax Officer for the
collection of taxes on earned income and net profits from any taxpayer
whose taxes are or become delinquent and/or remain due and unpaid.
The designated Tax Officer is hereby authorized to retain such costs
of collection as set forth in the attached schedule, as may be amended
from time to time, in recovering delinquent taxes and as permitted
to be assessed to delinquent taxpayers pursuant to law.
This article shall not apply to any employer or person 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.
As stated in § 98-31, the primary purpose of this
article is to conform the local income tax currently levied on earned
income and net profits by Warrington Township 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
any prior ordinance levying such tax is 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.
