[Adopted 2-18-1998 by Ord. No. 2879; amended in its entirety 7-15-2020 by Res. No. 24-20]
A.
ADMINISTRATIVE REVIEW
ASSESSMENT
AUDIT
AUDITOR
BUSINESS TAXES
CREDIT
DIRECTOR
INITIAL INQUIRY
JEOPARDY ASSESSMENT
TAX REVIEW BOARD
TOWNSHIP
The following words and phrases, when used in these regulations,
shall have the meanings ascribed to them:
An administrative process used by the Finance Department
to receive and make determinations on petitions from taxpayers relating
to the assessment, determination or refund of business privilege tax.
An assessment, determination, settlement or appraisement
of tax liability issued by the Township.
An inspection of the books and accounting records of a taxpayer
by the Finance Director or his/her authorized agent for the purpose
of verifying the correct payment of business privilege taxes by the
taxpayer. An audit may be conducted in person at the taxpayer's location,
at the Finance Department or by other reasonable means.
The Finance Director of Upper Darby Township or his/her authorized
agent.
Business privilege tax or mercantile license tax, collectively,
as imposed by the ordinances of the Township.
An overpayment made to the Township for business tax purposes.
A credit may be used to satisfy future business privilege tax obligations
upon the written request of the taxpayer and the filing of all required
tax returns.
The Finance Director, his or her assigns, and any other third
party involved in the collection of business privilege taxes.
Notice of taxes required to be paid either as a result of
a review of tax returns filed no more than three years before the
mailing date of the notice or as a result of a determination that
the taxpayer failed to file a tax return, underreported income, or
failed to pay a tax for one or more of the tax periods covered by
in the notice.
The determination of tax due by the Finance Director based
upon previously filed tax returns or other information available to
the Director after the taxpayer has failed to file a required tax
return or provide additional information as requested by the Finance
Department.
The Finance Committee of Upper Darby Township Council.
Township of Upper Darby unless specified otherwise.
B.
Other words and phrases may be previously defined within the Upper
Darby Township Administrative Code or Ordinances.
The Finance Department shall provide written notice to each
taxpayer contacted for an assessment, audit, review, jeopardy assessment
or initial inquiry. The notice shall contain the following:
"You are entitled to receive a written explanation of your rights
with regard to the audit, appeal, enforcement, refund and collection
of local taxes by calling the Upper Darby Township Finance Department
at 610-734-7625 during the hours of 8:30 a.m. to 4:30 p.m., Monday
through Friday. The Finance Department shall provide a copy of the
applicable Upper Darby Township Ordinances and these regulations to
any taxpayer that makes a request at no cost."
The Finance Department will notify the taxpayer, in writing,
of the basis for any underpayment that the Director has determined
to exist, including:
A.
The tax period, or periods, for which the underpayment is asserted.
The amount of the underpayment shall be detailed by tax period.
B.
The legal basis upon which the Director has relied upon to determine
that an underpayment exists.
C.
An itemization of any revisions made by the Director to a return
or report filed by the taxpayer that results in the determination
of an underpayment.
The Director is authorized to examine the books and records
of any taxpayer in order to verify the accuracy of any return made,
or if no return was made, to ascertain whether the tax should be imposed
and, if so, the amount of tax due.
The Finance Department shall follow the following procedures
during the conduct of an audit or administrative review of a taxpayer's
books and records:
A.
The taxpayer shall be notified in writing of a scheduled audit at
least 30 days in advance of the scheduled audit and the written notice
shall contain the following information:
B.
The taxpayer may request that the audit be rescheduled, providing
that it shall be rescheduled within a reasonable time;
C.
If the audit is scheduled to be conducted by mail, the taxpayer may
request that the audit be conducted in person at the taxpayer's place
of business;
D.
The taxpayer may have a representative present during the audit if
it is conducted at the taxpayer's place of business;
E.
The Director shall send written notice of its findings and conclusions,
including the calculation of any tax, interest and/or penalty found
to be due or any credit due, to the taxpayer within 30 days after
the completion of the audit;
F.
The Director may request additional information from the taxpayer
in order to complete the audit, which information shall be provided
to the tax office within 30 days of the request;
G.
The taxpayer must advise the Director in writing of any dispute or
disagreement it has with the audit results within 30 days of the date
of the notice from the Director setting forth the audit results;
H.
The taxpayer will have 30 days from the date of the written notice
of tax, interest and/or penalty due to make payment or payment arrangements
with the Finance Department;
I.
The Finance Department will not take any action against the taxpayer
for a tax year in question until the end of the audit period, including
extensions.
A.
The Finance Department's Initial request is limited to taxes required
to be paid or tax returns required to be filed no more than three
years prior to the mailing date of the notice.
B.
If the Director determines that a taxpayer has failed to file a tax
return, under-reported income, or failed to pay for one or more of
the tax periods covered by the initial request, the Director may make
a subsequent request for a tax return or other supporting information
for years beyond the initial three-year inquiry period.
C.
If a taxpayer has failed to file a required return or pay a tax which
was due more than three years prior to the date of a notice, then
the three-year period will not apply.
A.
If the taxpayer has a place of business in the Township and one or
more places of business outside the Township, only those receipts
properly allocable to the place of business in the Township are taxable.
Generally, all of a taxpayer's receipts must be attributable to one
of its places of business. Receipts will be considered allocable to
the place of business in the Township if any significant aspect of
the transaction occurs at or arises out of that place of business.
B.
The fact that the receipts from any transaction may be subject to
tax in a jurisdiction outside the Township does not necessarily mean
that those receipts are not allocable to the Township and subject
to this tax. The Township will, however, allow a taxpayer to exclude
gross receipts attributable to the office in Upper Darby to the extent
business privilege tax is paid on those same gross receipts to another
municipality if the taxpayer provides a true, correct and complete
copy of the tax return for the like tax paid to the other municipality
together with proof of payment.
A.
Apportionment of gross receipts will be made under the following
formula:
(total gross receipts x apportionment factor) = gross receipts
apportioned to Pennsylvania.
B.
The apportionment factor shall be the product of averaging the total
of the following:
(1)
Wages, salaries, commissions, and other compensation in Pennsylvania,
as a percentage of total wages, salaries, commissions and other compensation.
(a)
For the purpose of computing the payroll factor other forms
of compensation must be included when relevant. Other forms of compensation
may include; self-employment income of a proprietor or a single member
of a limited liability company, an active partner's share of partnership
income, an active member's share of the income of a limited liability
company, or an active shareholder's ordinary income from a S corporation.
(2)
Value of the tangible personal property and real property owned or
leased and situated within Pennsylvania as a percentage of total tangible
personal and real property owned or leased. The value of leased property
is eight times the annual rental, for the purpose of this calculation.
(3)
Gross receipts from Pennsylvania sales and/or services, as a percentage
of total gross receipts from sales and/or services.
The Director may require the taxpayer's federal income tax return
if the federal tax information is reasonably necessary for the enforcement
or collection of Township taxes and the information is not available
from other available sources or the Pennsylvania Department of Revenue.
A.
Books, journals, invoices, documents and other accounting records
utilized by the taxpayer in the ordinary course of business must be
kept in a manner which will reflect actual business operations. There
must be objective criteria in these books and records, as well as
in underlying documents, such as invoices, to support the returns
filed by the taxpayer. A taxpayer claiming exemptions or exclusions
for any portion of gross receipts must maintain complete records which
will support the validity of the claim. Such claims will be disallowed
if not sufficiently proven by the taxpayer.
B.
If records are not available for the entire period requested for
review, the Finance Department may utilize whatever information or
records are available to reconstruct, as accurately as possible, figures
that reflect the business activity of the taxpayer for the period
involved.
The Director may enter into written agreements with any taxpayer
under which the taxpayer is allowed to satisfy a tax liability in
installment payments, if the Finance Department on behalf of the Township
determines that the agreement will facilitate collection. An installment
agreement may be modified or terminated if the taxpayer provided inaccurate
or incomplete information, if the collection of the tax is in jeopardy,
if there is a significant change in the taxpayer's financial condition,
if the taxpayer fails to provide a financial condition update or fails
to pay an installment when due.
A.
Refund of overpayment. A taxpayer may file a written request with
the Finance Department for a refund or credit of any Township business
tax within three years of the due date for the tax return, as extended,
or one year after actual payment of the tax, whichever is later. For
amounts paid as a result of a notice asserting or informing a taxpayer
of an underpayment, a written request for a refund shall be filed
with the Township Finance Department within one year of the date of
the payment.
B.
Interest on overpayment. All overpayments of tax paid to the Township
shall bear simple interest from the date of resolution at the same
interest rate as the Commonwealth of Pennsylvania is required to pay
pursuant to the Pennsylvania Fiscal Code, except:
(1)
No interest shall be paid if an overpayment is refunded or applied
against any other Township tax, interest or penalty due within 75
days after the due date of a tax return or within 75 days after the
actual filing of the tax return, whichever is later; and, no interest
shall be paid on overpayments of interest or penalty. Acceptance of
a refund check by a taxpayer shall not prejudice the taxpayer from
claiming any additional overpayment and interest thereon. The definition
of "date of overpayment" and "date of resolution" shall be in accordance
with the Taxpayer Bill of Rights.
C.
Use of credit. A credit balance will be automatically applied against
any outstanding tax, including estimates. No refund will be issued
if there are any outstanding taxes.
A.
A request for refund or credit must be filed within three years of
the date the filed or due or one year after actual payment, whichever
is later.
B.
A petition for review of a denial of a refund or credit must be filed
30 days after the date of the written denial by the Director.
C.
A petition for reassessment of any business privilege tax assessment
must be filed within 90 days of the date of the assessment notice
from the Director.
D.
Failure to timely file an appeal of an assessment or denial of refund
or credit will result in denial of the appeal.
Any taxpayer may request a review of a determination by the
Director, including the denial of a refund or credit or tax due using
the following procedure:
A.
Any taxpayer seeking review of a determination by the Director shall
file a completed petition for review with the Finance Department for
a hearing by the Local Tax Review Board.
B.
The petition for review shall be on the form provided by the Finance
Department and contain the following information:
(1)
Name and business address of the taxpayer;
(2)
A complete description of the business activity of the taxpayer which
gives rise to the tax or to the claimed refund or adjustment;
(3)
A copy of the assessment or tax return for which review is sought;
(4)
The taxpayer's written explanation of the reason that the assessment
should be changed or a refund should be given; and
(5)
Copies of all supporting documentation for the taxpayer's position.
C.
There shall be no fee charged to the taxpayer for the filing of the
petition for review or the hearing on the petition.
D.
A hearing shall be scheduled by the Chairman of the Tax Review Board.
The first hearing on a petition for review shall be held no less than
seven days and no more than 30 days after the completed petition has
been filed. Subsequent hearings, if required, will be scheduled upon
agreement of the Board and the taxpayer.
E.
Written notice of the hearing shall be given to the taxpayer, Chief
Administrative Officer, and the Director. The notice shall state the
time, date and place of the hearing.
F.
A hearing will be conducted by the Tax Review Board in the following
manner:
(1)
The Taxpayer that filed the petition for review of a determination
shall present evidence in support of its petition, including documentation
and through witnesses;
(2)
The petitioning taxpayer must prove by clear and convincing evidence
their entitlement to a refund or change in assessment;
(3)
A taxpayer may be represented by an attorney before the Tax Review
Board. A corporate taxpayer must be represented by an authorized officer
and may have an attorney present;
(4)
All testimony shall be given under oath;
(5)
A representative of the Finance Department may question any witnesses
presented by the taxpayer.
(6)
A representative of the taxpayer may question any witness presented
by the Finance Department;
(7)
At the conclusion of the evidence presented by the taxpayer, a representative
of the Finance Department may present its evidence in support of the
determination appealed from; and
(8)
The taxpayer at its sole expense may provide for stenographic recordation
of the hearing before the Tax Review Board.
G.
The Tax Review Board's decision will be sent to the taxpayer, in
writing, within 60 days of the receipt of the completed petition for
review. The taxpayer may execute a waiver of time to allow the presentation
of additional evidence by the taxpayer or at the Review Board's request
to allow it additional time to render a decision.
H.
The taxpayer may appeal the determination of the Tax Review Board
to the Court of Common Pleas of Delaware County within 30 days of
the date of the determination of the Tax Review Board.
I.
No administrative review or judicial appeal will operate to suspend
the accrual of penalty and interest from the date the tax was due
to the date that the tax is actually paid.
All taxpayer complaints shall be directed to the Director in
writing.
The Finance Department shall follow the enforcement procedures
set forth in the Administrative Code and/or Township Ordinances and
may bring legal action for the collection of taxes, penalty and interest
as follows:
