[Adopted 11-22-2011 by Ord. No. 85-115-4]
This article amends Ordinance No. 85-115, Ordinance No. 85-115-1, Ordinance No. 85-115-2, and Ordinance No. 85-115-3, formerly the Emergency and Municipal Services Tax Ordinance of the Township of Harborcreek, and now known as the "Local Services Tax."
[Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I)]
This article amendment is enacted pursuant to the authority conferred by the "Local Tax Enabling Act," § 6924.101 et seq.
This article shall become effective as of January 1, 2012.
A. 
The provisions of Section 13 of the Local Tax Enabling Act, 53 P.S. § 6913, as amended by Act 222 of 2004, and by Act 7 of 2007,[1] are incorporated herein by reference and shall be deemed a part hereof as though the same were set forth at length herein.
[1]
Editor's Note: Sec. 13 of the Local Tax Enabling Act was repealed June 30, 2012, pursuant to Secs. 17 and 40(2) of Act 32 of 2008; see now 53 P.S. § 6924.501 et seq.
B. 
Provided, however, that where options are given in said Section 13,[2] this article designates the option elected and any option not selected shall be deemed a nullity and without force and effect.
[2]
Editor's Note: See now 53 P.S. § 6924.501 et seq.
The following words, when used in this article, shall have the meanings ascribed to them in this section, except in those instances where the context clearly indicates a different meaning:
COLLECTOR
The agent and/or deputy agent designated by the Township to collect the tax imposed by this article and to administer the provisions thereof; the Collector shall have all the powers, rights, duties and obligations assigned to the officer as defined in the Local Tax Enabling Act.
COMPENSATION
Gross earned income and net profits, including, but not limited to, income from real estate rental.
EARNED INCOME
Salaries, wages, commissions, bonuses, incentive payments, fees, tips and any other compensation received, actually or constructively, by a person or his personal representative for services rendered, whether directly or through an agent, whether in cash or in kind, and does not include compensation to persons on active military service, periodic payments for sickness and/or disability or retirement or workmen's compensation payments, social security disability or old age payments, retirement or pension payments, public assistance payments, unemployment compensation payments or payments to reimburse expenses or payments made by employers or labor unions for wage and salary supplemental programs, including hospitalization, disability or death, strike benefits or voluntary sickness payments.
EMPLOYER
A person, partnership, association, corporation, institution, governmental body or unit or agency, any LLC, LLP or other similarly organized business entity operating and/or existing in Harborcreek Township and employing one or more persons.
NET PROFITS
The net income from the operation of a business, profession, or other activity in the Township of Harborcreek.
OCCUPATION
Any livelihood, job, trade, profession, business or enterprise of any kind for which compensation is received and conducted within Harborcreek Township.
PERSON
Every natural person, partnership, association, corporation or other entity when used in any clause concerning the imposition, declaration or payment of tax. A "person," for purposes of the imposition of an local services tax, shall include, but not be limited to, any person subject to the earned income tax or wage tax enacted in Harborcreek Township.
TAX
The local services tax imposed herein.
TAXABLE PERIOD
The period beginning January 1, 2012, and ending December 31, 2012, and each succeeding calendar year thereafter.
TAXPAYER
Any natural person engaging in an occupation within the territorial limits of the Township and shall include, but not be limited to, all taxpayers subject to the earned income tax or wage tax in Harborcreek Township.
TOWNSHIP
Harborcreek Township.
An annual tax for general revenue purposes of $52 is hereby imposed upon each person for the privilege engaging in an occupation within the territorial limits of Harborcreek Township. Said tax shall be levied during the period of January 1, 2012, and ending December 31, 2012, and each succeeding calendar year thereafter. For 2013 and the subsequent years, said tax will automatically be deemed reenacted without formal reenactment, to be effective January 1 of each subsequent year unless repealed. The situs for payment of the tax, and the political subdivision entitled thereto, is the place of employment on the first day the taxpayer becomes subject to the tax during each payroll period.
A. 
Any person who shall receive less than $12,000 as compensation during the taxable period shall be exempt from the payment of the tax imposed by this article. For the purposes of this exemption, the gross sum total of all compensation received from all occupations within the political subdivision shall be computed for each taxable period and any exemption, if allowed, shall be an exemption from payment solely for the pertinent taxable period only. The determination of whether a person qualifies for an exemption shall be made by the Collector of the taxes for Harborcreek Township.
B. 
In accordance with the limitations imposed by Section 2 of the Local Tax Enabling Act, 53 P.S. § 6902, as amended,[1] no person shall pay more than $52 to any municipality(ies) during any one year.
[1]
Editor's Note: See now 53 P.S. §§ 6924.311.
C. 
If a person has the $52 due hereunder withheld from their pay and forwarded to the Collector in Harborcreek Township, and that person can show the Collector that a different municipality has already withheld an OPT or an LST from their earnings for the current year in an amount that equals or exceeds $52, and the other municipality is where the person is principally employed, then that person may apply for a refund of some or all of the amount withheld, depending on the tax withheld by the other municipality.
D. 
Upfront exemptions.
(1) 
If a person wants to avoid the withholding of the $52 hereunder levied, then that person must file an annual upfront exemption form (developed by DCED, the Department of Community and Economic Development) with Harborcreek Township and that same form should be presented to that person's employer. The exemption certificate would verify that the employee reasonably expects to receive earned income and/or net profits of less than $12,000 from all sources within the political subdivision for the current calendar year for which the exemption certificate is filed. A copy of the employee's last pay stubs or W-2 forms from employment within Harborcreek Township for the year prior to the calendar year for which the employee is requesting an exemption must be attached to the exemption certificate. Employers must make upfront exemption forms readily available to employees at all times and provide new employees with the forms at the time of hiring. Upon receipt of an upfront exemption form and until otherwise instructed by Harborcreek Township, employers must stop withholding the local services tax for the specific calendar year from employees for whom the exemption applies. Employers must restart withholding the local services tax from an employee who files an exemption certificate in the following circumstances:
(a) 
If instructed to do so by Harborcreek Township; or
(b) 
If notified by the employee that they are no longer eligible for the exemption; or
(c) 
If the employer pays the employee more than $12,000 for the calendar year.
(2) 
Employers shall restart withholding of the local services tax by withholding a) a catch-up lump sum tax equal to the amount of tax that was not withheld from the employee as a result of the exemption and b) the same amount per payroll period that is withheld from other employees. Except for monitoring when an employee who has filed an exemption certificate earns more than $12,000, employers are not responsible for investigating exemptions, monitoring tax exemption eligibility or exempting an employee for the tax.
E. 
Members of a reserve component of the armed forces called to duty and honorably discharged veterans who served in any war or armed conflict who are blind, paraplegic or a double or quadruple amputee as a result of military service or who are 100% disabled from a service-related injury are exempt from paying the tax as well.
F. 
If a person works in more than two municipalities on the first business day of the year, and neither municipality is the principal work place of the person, then the municipality where the person lives shall have a priority for the assessment and collection of its OPT/LST. If claim is made for exemption or refund by a person not residing in Harborcreek because payment was already made to a municipality with a higher priority, then applications should be directed to the Collector of the local services tax in Harborcreek Township.
A. 
Every taxpayer who is self-employed shall file with the Collector, upon a form prescribed by DCED, a return setting forth the taxpayer's name, business address, residence, social security number and such other relevant information as the form may require.
B. 
At the time of filing his/her return, every such taxpayer seeking exemption from payment of the tax shall make his declaration, under penalty of perjury, as to whether the gross compensation which he/she estimates to receive during the taxable period shall or shall not exceed the sum of $12,000, the threshold for exemption under§ 412-57A, above.
C. 
Such return shall be filed with the Collector within 15 days after the taxpayer first engages in an occupation or business within the territorial limits of the Township.
D. 
Payment of said tax shall be made to the Collector on a prorated basis and shall be paid by self-employed individuals on a quarterly basis as if their payroll period is a calendar quarter. Self-employed taxpayers should pay the tax 30 days after the end of each calendar quarter.
A. 
Every employer presently having an office, factory, workshop, branch, warehouse, place of business or otherwise doing business within the territorial limits of the Township shall file a registration statement with the Collector within 15 days after the effective date of this article; thereafter, employers who may commence doing business within the Township after the effective date of this article shall file such registration statement within 15 days after becoming an employer.
B. 
Such registration statement shall be upon a form prescribed by the Collector and shall set forth the employer's name, business address and federal identification number and the name, address and social security number of each employee subject to the tax imposed by this article and such other pertinent information as the Collector may require.
C. 
Each employer shall collect the tax on a pro rata basis determined by the number of payroll periods established by an employer for a calendar year. The pro rata share of the tax assessed on each taxpayer for a payroll period is calculated by dividing the combined rate of the local services tax by the number of payroll periods established by the employer for the calendar year. When calculating the pro rata share, employers are required to round down to the nearest 1/100 of a dollar. For instance, a $52 tax would be collected at the rate of $1 per week or at the rate of $2 biweekly; provided, however, that no deduction shall be made from any employee claiming exemption who has secured an exemption from the Collector of LST in Harborcreek Township.
D. 
Quarterly returns.
(1) 
On or before the dates hereinafter specified in this subsection, each employer shall file a quarterly return, on a form prescribed by the Collector, and shall concurrently therewith pay to the Collector the sum total of taxes deducted during the preceding three-month period:
Quarterly Period
Return Date
January - March
April 30, current year
April - June
July 31, current year
July - September
October 31, current year
October - December
January 21, succeeding year
(2) 
Said quarterly return shall contain the names, addresses and social security numbers of each employee from whom deduction was made, the tax deducted from each employee, the sum total of taxes deducted, and a list of exempt employees, their names, social security numbers, and addresses. In cases of employees claiming previous deduction of this tax or a similar occupational privilege tax, the employee, in addition to the information required to be furnished by him/her for employees claiming exemption, shall set forth the name and address of the employer who made such deduction.
E. 
On or before February 28 of the year following the taxable period, each employer shall file an annual return, on a form prescribed by the Collector, showing the total amount of said tax paid to the Collector, the total amount of said tax paid deducted from all employees during the preceding calendar year, the total number of employees claiming exemption during the preceding calendar year and such other pertinent information as the Collector may require.
F. 
Any employer who discontinues business or ceases operation prior to December 31 of the calendar year during which he shall be required to deduct said tax shall, within 15 days after such event, file the returns required by Subsection D and E hereof and concurrently therewith pay to the Collector the sum total of taxes deducted.
G. 
Every employer who willfully or negligently fails or omits to make the deductions required by this section shall be liable for the payment of the taxes he was required to withhold to the extent that such taxes have not been recovered from the employee(s).
H. 
The failure or omission of any employer to make the deduction required by this section shall not relieve any employee from the payment of said tax or from otherwise complying with the requirements of this article.
I. 
If the employer shall deduct the tax as required by this section, the amount deducted shall be held in trust by such employer for the use of the Township, as beneficial owner thereof, and the employee from whose earnings said tax was deducted shall be deemed to have paid said tax.
J. 
Employers are only required to withhold the local services tax on a payroll period basis for those payroll periods in which the taxpayer is employed. However, when two or more employers employ a taxpayer in a payroll period, an employer is not required to withhold the local services tax if the taxpayer provides a pay stub from his/her principal employer accompanied by an employee statement of principal employment (DCED form) that the pay stub is from the taxpayer's principal employer and that the taxpayer will notify the employer of any change in employment. Employers are relieved of liability for the tax if they fail to withhold the tax due to incorrect information provided by the taxpayer regarding taxpayer's principal employer or if the employer complies with the provisions establishing the collection of the tax on a payroll period basis.
K. 
If a taxpayer has two or more jobs in different political subdivisions during a payroll period, the priority of claim to collect the local services tax is as follows:
(1) 
Where the taxpayer maintains his or her principal office or is principally employed;
(2) 
Where the taxpayer resides and works; and
(3) 
Where the taxpayer is employed that is nearest in miles to the taxpayer's home
A. 
It shall be the duty of the Collector to collect and receive the tax and any fine and penalty imposed by this article for payment over to the Township. It shall also be his/her duty to keep a record showing the amount received by him/her from each person paying the tax and, if paid by such person in respect of another person, the name of such other person and the date of such receipt.
B. 
The Collector is hereby charged with the administration and enforcement of the provisions of this article and is hereby empowered, subject to the approval of the Board of Supervisors of the Township, to prescribe, adopt, promulgate and enforce rules and regulations relating to the administration and enforcement of this article and to prescribe forms necessary for the administration of this article.
C. 
The Collector and his/her agents designated in writing by him/her are hereby authorized to examine the books of account, papers, and records of any person in order to verify the accuracy of any return, or, if no return has been filed, to ascertain the tax due. Every person is directed and required to cooperate with the review/audit by the Collector. The Collector is hereby authorized to compel production of the documents necessary to carry out the duties of his/her position and to compel testimony of witnesses, if necessary, in order to ascertain the tax due or the full compliance of the taxpayer.
D. 
Any information obtained by the Collector or his/her agents, or by any official, agent or employee of the Township as a result of any return, investigation or hearing required or authorized by this article shall be confidential and shall not be disclosed to any person except for official use in connection with the administration or enforcement of this article or as otherwise provided by law.
E. 
The Township shall adopt regulations, consistent with the Local Taxpayer Bill of Rights Act, 53 P.S. §§ 8425 and 8426, for the processing of refund claims for persons who overpaid the local services tax. Refunds are not subject to interest if made within 75 days of either a refund request or January 30 of the year after the tax is paid, whichever is later.
A. 
The Collector is hereby empowered and authorized on behalf of the Township to recover the tax and any interest thereon or any penalty, fine or costs which may be imposed by this article by any means now or hereafter authorized by the Local Tax Enabling Act, 53 P.S. § 6924.101 et seq.
[Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I)]
B. 
Any action brought to recover the tax imposed by this article shall begin within five years of the date the tax was due or within five years after the filing of a return, whichever is later; provided, however, that this limitation shall not operate to prevent actions to recover the tax, interest, or penalty, fine or costs due or determined to be due in the following situations:
(1) 
Where no return was filed, although one was required;
(2) 
Where a false or fraudulent return was filed, whether intended or not; and
(3) 
Where any employer deducted taxes under the provisions of this article and failed to pay the amounts so deducted to the Collector.
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 action is brought to recover said tax or a levy is made by distress and sale of goods and property, the person liable therefor shall, in addition, be liable for the cost of collection as well as the interest and penalties imposed. The reasonable costs of collection shall be deemed 25% of the total due and owing. The provisions of this section shall apply both to employees and employers required to make deduction of said tax.
A. 
Any person who fails, neglects, or refuses to comply with any provisions contained herein, including the filing of a timely return, the withholding of tax from employees, the cooperation with the Collector during an audit or investigation, or the filing of a false or fraudulent return shall, upon conviction thereof, be sentenced to pay a fine of not more than $500 for each offense and the costs of prosecution/investigation and, in default of the payment of said fine and costs, to undergo incarceration for a period not to exceed 30 days.
B. 
Any person who discloses or divulges any information which is confidential and who is not privileged to disclose such information by the provisions of this article or otherwise by law shall, upon conviction thereof, be sentenced to pay a fine of not more than $500 for each offense and the costs of prosecution and, in default of the payment of said fine and costs, to undergo incarceration for a period not to exceed 30 days.
C. 
The penalties imposed under this section shall be in addition to any other civil or criminal liability set forth in this article.
D. 
The failure of a person to receive or procure the forms required for the filing of any return required by this article shall not excuse him/her from the duty to file such return.
The provisions of this article are severable. If any sentence, clause or section of this article is, for any reason, found to be illegal or unconstitutional or otherwise invalid, such illegality or invalidity shall not affect or impair any of the remaining provisions, sentences, clauses, or sections contained herein. It is hereby declared to be the intent of the Township that this article would have been adopted had the invalid or illegal sentence, clause or section not been included herein.
All ordinances or parts of ordinances inconsistent with the terms of this article are hereby repealed insofar as they may be inconsistent herewith, including, but not limited to, provisions of the previous Occupational Privilege Tax Ordinance, No. 85-115, as well as the EMST Ordinance, effective January 1, 2006, identified as Ordinance No. 85-115-1, and Ordinance No. 85-115-2, and the Local Services Tax Ordinance Amendment, No. 85-115-3.