[Ord. 739, 11/5/2007]
This Part shall be known and may be cited as the “Local
Services Tax.”
[Ord. 739, 11/5/2007]
The following words and phrases, when used in this part, shall
have the meanings ascribed to them in this section, except where the
context or language clearly indicates or requires a different meaning:
The area within the corporate limits of the Borough of Nazareth,
Pennsylvania.
The person, public employee or private agency designated
by the Borough to collect and administer the tax herein imposed.
The Department of Community and Economic Development of the
Commonwealth of Pennsylvania.
Compensation as this term is defined in Section 13 [relating
to earned income taxes] of the Local Tax Enabling Act, the Act of
Dec. 31, 1965, P.L. 1257, Section 13, as amended, 53 P.S. § 6913,
as amended.
An individual, partnership, association, limited liability
corporation, limited liability partnership, corporation, governmental
body, agency or other entity employing one or more persons on a salary,
wage, commission or other compensation basis, including a self-employed
person.
Indicates the singular and plural number, as well as male,
female and neuter genders.
Any person, male or female, engaged in any occupation, trade
or profession within the corporate limits of the Borough.
The net income from the operation of a business, profession,
or other activity, as this term is defined in Section 13 [relating
to earned income taxes] of the Local Tax Enabling Act, the Act of
Dec. 31, 1965, P.L. 1257, Section 13, as amended, 53 P.S. § 6913,
as amended.
Any trade, profession, business or undertaking of any type,
kind or character, including services, domestic or other, carried
on or performed within the corporate limits of the Borough for which
compensation is charged or received, whether by means of salary, wages,
commission or fees for services rendered.
The local services tax at the rate fixed in § 24-203 of this Part.
The period from January 1 until December 31 in any year,
a calendar year.
[Ord. 739, 11/5/2007]
For specific revenue purposes, an annual tax is hereby levied
and assessed, commencing January 1, 2008, upon the privilege of engaging
in an occupation with a primary place of employment within the Borough
during the tax year. Each natural person who exercises such privilege
for any length of time during any tax year shall pay the tax for that
year in the amount of $52, assessed on a pro rata basis, in accordance
with the provisions of this part. This tax may be used solely for
the following purposes as the same may be allocated by the Borough
Council from time to time: (1) emergency services, which shall include
emergency medical services, police services and/or fire services;
(2) road construction and/or maintenance; (3) reduction of property
taxes; or (4) property tax relief through implementation of a homestead
and farmstead exclusion in accordance with 53 Pa.C.S.A. Ch. 85, Subch.
F (relating to homestead property exclusion). The Borough shall use
no less than 25% of the funds derived from the tax for emergency services.
This tax is in addition to all other taxes of any kind or nature heretofore
levied by the Borough. The tax shall be no more than $52 on each person
for each calendar year, irrespective of the number of political subdivisions
within which a person may be employed.
[Ord. 739, 11/5/2007]
1.
Exemption.
Any person whose total earned income and net profits from all sources
within the Borough is less than $12,000 for any calendar year in which
the tax is levied is exempt from the payment of the tax for that calendar
year. In addition, the following persons are exempt from payment of
the tax:
A.
Any person
who has served in any war or armed conflict in which the United States
was engaged and is honorably discharged or released under honorable
circumstances from active service if, as a result of military service,
the person is blind, paraplegic or a double or quadruple amputee or
has a service-connected disability declared by the United States Veterans'
Administration or its successor to be a total 100% disability.
B.
Any person
who serves as a member of a reserve component of the armed forces
and is called to active duty at any time during the taxable year.
For the purposes of this subparagraph, "reserve component of the armed
forces" shall mean the United States Army Reserve, United States Navy
Reserve, United States Marine Corps Reserve, United States Coast Guard
Reserve, United States Air Force Reserve, the Pennsylvania Army National
Guard or the Pennsylvania Air National Guard.
2.
Procedure
to Claim Exemption.
A.
A person seeking to claim an exemption from the local services tax shall annually file an exemption certificate with the Borough and with the person's employer affirming that the person reasonably expects to receive earned income and net profits from all sources within the Borough of less than $12,000 in the calendar year for which the exemption certificate is filed. In the event the Borough utilizes a tax collection officer, it shall provide a copy of the exemption certificate to that officer. The exemption certificate shall have attached to it a copy of all the employee's last pay stubs or W-2 forms from employment within the Borough for the year prior to the fiscal year for which the employee is requesting to be exempted from the tax. Upon receipt of the exemption certificate and until otherwise instructed by the Borough or except as required by Subsection 2B, the employer shall not withhold the tax from the person during the calendar year or the remainder of the calendar year for which the exemption certificate applies. Employers shall ensure that the exemption certificate forms are readily available to employees at all times and shall furnish each new employee with a form at the time of hiring.
B.
With respect to a person who claimed an exemption for a given calendar year from the tax, upon notification to an employer by the person or by the Borough that the person has received earned income and net profits from all sources within the Borough equal to or in excess of $12,000 in that calendar year or that the person is otherwise ineligible for the tax exemption for that calendar year, or upon an employer's payment to the person of earned income within the Borough in an amount equal to or in excess of $12,000 in that calendar year, an employer shall withhold the local services tax from the person under Subsection 2C.
C.
If a person who claimed an exemption for a given calendar year from the tax becomes subject to the tax for the calendar year under Subsection 2B, the employer shall withhold the tax for the remainder of that calendar year. The employer shall withhold from the person, for the first payroll period after receipt of the notification under Subsection 2B, a lump sum equal to the amount of tax that was not withheld from the person due to the exemption claimed by the person under this subsection, plus the per payroll amount due for that first payroll period. The amount of tax withheld per payroll period for the remaining payroll periods in that calendar year shall be the same amount withheld for other employees. In the event the employment of a person subject to withholding of the tax under this clause is subsequently severed in that calendar year, the person shall be liable for any outstanding balance of tax due, and the Borough may pursue collection under this act.
3.
Refunds.
The Borough Secretary/Treasurer, in consultation with the Collector
and DCED, shall establish procedures for the processing of refund
claims for any tax paid by any person who is eligible for exemption,
which procedures shall be in accord with provisions of the general
municipal law relating to refunds of overpayments and interest on
overpayments. Refunds made within 75 days of a refund request or 75
days after the last day the employer is required to remit the tax
for the last quarter of the calendar year, whichever is later, shall
not be subject to interest. No refunds shall be made for amounts overpaid
in a calendar year that do not exceed $1. The Borough Secretary/Treasurer
or the Collector shall determine eligibility for refunds to exempt
persons and provide refunds.
[Ord. 739, 11/5/2007]
1.
Each employer
within the Borough, as well as those employers situated outside the
Borough but who engage in business within the Borough is hereby charged
with the duty of collecting the tax from each of his employees engaged
by him or performing for him within the Borough and making a return
and payment thereof to the Collector. Further, each employer is hereby
authorized to deduct this tax from each employee in his or her employ,
whether said employee is paid by salary, wage or commission and whether
or not all such services are performed within the Borough.
2.
A person subject to the tax shall be assessed by the employer a pro rata share of the tax for each payroll period in which the person is engaging in an occupation. The pro rata share of the tax assessed on the person for a payroll period shall be determined by dividing the combined rate of the tax levied for the calendar year by the number of payroll periods established by the employer for the calendar year. For purposes of determining the pro rata share, an employer shall round down the amount of the tax collected each payroll period to the nearest 0.01 of a dollar. Collection of the tax shall be made on a payroll period basis for each payroll period in which the person is engaging in an occupation, except as provided in Subsection 4 of this Section. For purposes of this paragraph, "combined rate" shall mean the aggregate annual rate of the tax levied by the school district and the Borough.
3.
No person
shall be subject to the payment of the local services tax by more
than one political subdivision during each payroll period.
4.
In the
case of concurrent employment, an employer shall refrain from withholding
the tax if the employee provides a recent pay statement from a principal
employer that includes the name of the employer, the length of the
payroll period and the amount of the tax withheld and a statement
from the employee that the pay statement is from the employee's principal
employer and the employee will notify other employers of a change
in principal place of employment within two weeks of its occurrence.
The employee's statement shall be provided on the form approved by
DCED.
5.
The tax
shall be no more than $52 on each person for each calendar year, irrespective
of the number of political subdivisions within which a person may
be employed. The Borough shall provide a taxpayer a receipt of payment
upon request by the taxpayer.
6.
No employer shall be held liable for failure to withhold the tax or for the payment of the withheld tax money to the Borough if the failure to withhold taxes arises from incorrect information submitted by the employee as to the employee's place or places of employment, the employee's principal office or where the employee is principally employed. Further, an employer shall not be liable for payment of the local services tax in an amount exceeding the amount withheld by the employer if the employer complies with the provisions of § 24-204, Subsection 2, of this Part and this section and remits the amount so withheld in accordance with this Part.
7.
Employers
shall be required to remit the local services taxes 30 days after
the end of each quarter of a calendar year.
[Ord. 739, 11/5/2007]
Each employer shall prepare and file a return showing a computation
of the tax on forms to be supplied to the employer by the Collector.
If an employer fails to file the return and pay the tax, whether or
not the employer makes collection thereof from the salary, wages or
commissions paid by him or her to an employee, except as provided
hereafter in this part, the employer shall be responsible for the
payment of the tax in full as though the tax had been originally levied
against the employer.
[Ord. 739, 11/5/2007]
In each tax year, each employer shall use his or her employment
records to determine the number of employees from whom such tax shall
be deducted and paid over to the Collector on or before the 30th day
following the end of each calendar quarter of each such tax year.
[Ord. 739, 11/5/2007]
Each self-employed individual who performs services of any type
or kind or engages in any occupation or profession within a primary
place of employment within the Borough shall be required to comply
with this part and pay the pro rata portion of the tax due to the
Collector on or before the 30th day following the end of each quarter.
[Ord. 739, 11/5/2007]
1.
The situs
of the tax shall be the place of employment on the first day the person
becomes subject to the tax during each payroll period. In the event
a person is engaged in more than one occupation, that is, concurrent
employment, or an occupation which requires the person working in
more than one political subdivision during a payroll period, the priority
of claim to collect the local services tax shall be in the following
order:
A.
First,
the political subdivision in which a person maintains his or her principal
office or is principally employed;
B.
Second,
the political subdivision in which the person resides and works if
the tax is levied by that political subdivision;
C.
Third,
the political subdivision in which a person is employed and which
imposes the tax nearest in miles to the person's home.
2.
In case
of dispute, a tax receipt of the taxing authority for that calendar
year declaring that the taxpayer has made prior payment constitutes
prima facie certification of payment to all other political subdivisions.
[Ord. 739, 11/5/2007]
All employers and self-employed individuals residing or having
their places of business outside of the Borough but who perform services
of any type or kind or engage in any occupation or profession within
the Borough do, by virtue thereof, agree to be bound by and subject
themselves to the provisions, penalties and regulations promulgated
under this part with the same force and effect as though they were
residents of the Borough. Further, any individual engaged in an occupation
within the Borough and an employee of a nonresidential employer may,
for the purpose of this part, be considered a self-employed person,
and in the event his or her tax is not paid, the Borough shall have
the option of proceeding against either the employer or employee for
the collection of this tax as hereinafter provided.
[Ord. 739, 11/5/2007]
1.
The Collector
shall be appointed by resolution of the Borough Council. It shall
be the duty of the Collector to accept and receive payments of this
tax and to keep a record thereof showing the amount received by him
from each employer or self-employed person, together with the date
the tax was received.
2.
The Collector
is hereby charged with the administration and enforcement of this
part and is hereby charged and empowered, subject to Borough Council
approval, to prescribe, adopt and promulgate rules and regulations
relating to any matter pertaining to the administration and enforcement
of this part, including provisions for the examination of payroll
records of any employer subject to this part, the examination and
correction of any return made in compliance with this part and any
payment alleged or found to be incorrect or as to which overpayment
is claimed or found to have occurred. Any person aggrieved by any
decision of the Collector shall have the right to appeal to the Court
of Common Pleas of Cumberland County as in other cases provided.
3.
The Collector
is hereby authorized to examine the books and payroll records of any
employer in order to verify the accuracy of any return made by an
employer or, if no return was made, to ascertain the tax due. Each
employer is hereby directed and required to give the Collector the
means, facilities and opportunity for such examination.
[Ord. 739, 11/5/2007]
1.
In the
event that any tax under this part remains due or unpaid 30 days after
the due dates above set forth, the Collector may sue for the recovery
of any such tax due or unpaid under this part, together with interest
and penalty.
2.
If for
any reason the tax is not paid when due, interest at the rate of 6%
on the amount of such tax shall be calculated beginning with the due
date of the tax and a penalty of 5% shall be added to the flat rate
of such tax for nonpayment thereof. Where suit is brought for the
recovery of this tax or other appropriate remedy undertaken, the individual
liable therefor shall, in addition, be responsible and liable for
the costs of collection.
[Ord. 739, 11/5/2007]
Whoever makes any false or untrue statement on any return required
by this part, or whoever refuses inspection of the books, records
or accounts in his or her custody and control setting forth the number
of employees subject to this tax who are in his or her employment,
or whoever fails or refuses to file any return required by this part
shall be guilty of a violation and, upon conviction thereof, shall
be sentenced to pay a fine of not more than $600 and costs of prosecution,
and, in default of payment of such fine and costs, to imprisonment
for not more than 30 days. The action to enforce the penalty herein
prescribed may be instituted against any person in charge of the business
of any employer who shall have failed or who refuses to file a return
required by this part.
[Ord. 739, 11/5/2007]
1.
Nothing
contained in this part shall be construed to empower the Borough to
levy and collect the tax hereby imposed on any occupation not within
the taxing power of the Borough under the Constitution of the United
States and the laws of the Commonwealth of Pennsylvania.
2.
If the
tax hereby imposed under the provisions of this part shall be held
by any court of competent jurisdiction to be in violation of the Constitution
of the United States or of the laws of the Commonwealth of Pennsylvania
as to any individual, the decision of the court shall not affect or
impair the right to impose or collect said tax or the validity of
the tax so imposed on other persons or individuals as herein provided.
3.
Except
as set forth hereafter, all ordinances or parts of ordinances inconsistent
herewith are hereby repealed. Nothing herein shall be construed to
repeal the imposition and collection of an occupation privilege tax,
plus applicable penalties and interest, for calendar year 2006 and
all prior calendar years, or of an emergency and municipal services
tax for calendar year 2007, as the same existed prior to this amendment.
4.
The tax
imposed by this Ordinance shall be effective on January 1, 2008 and
all calendar years thereafter unless repealed or modified by Ordinance
of the Borough Council.
