This Part 1 shall be known and may be cited as the “Earned Income and Net Profit Tax Ordinance.”
Except as provided in this section, or where the context clearly indicates or requires a different meaning, the words and phrases when used in this Part 1 shall have the same meanings ascribed to them in this section as such terms are defined in §6913 of the Local Tax Enabling Act (53 P.S. §6913), including any and all amendments thereto.
The Local Tax Enabling Act, 53 P.S. §6901 et
seq., as amended.
The Municipality of Mt. Lebanon, Pennsylvania.
The tax levied under this Part 1 shall be applicable to Earned Income received and to Net Profits earned in the period beginning January 1 of the Current Year, and ending December 31 of the Current Year, or for Taxpayer fiscal years beginning in the Current Year, and the tax shall continue in force on a calendar year or Taxpayer fiscal year basis, without annual reenactment, as if levied for each Succeeding calendar Year, unless the rate of the tax is subsequently changed. The tax shall be at the rate of 1.3% for each calendar year (or Taxpayer fiscal year, as the case may be), upon all Residents of the Municipality, and is levied for general revenue purposes.
104.1.
Net Profits.
104.1.1.
Every Taxpayer making Net Profits shall, on or before April 15 of
the Current Year, make and file with the Officer, on a form prescribed
or approved by the Officer, a declaration of his estimated Net Profits
during the period beginning January 1 and ending December 31 of the
Current Year, and pay to the Officer in four equal quarterly installments
the tax due thereon as follows: the first installment at the time
of filing the declaration, and the other installments on or before
June 15 of the Current Year, September 15 of the Current Year, and
January 15 of the Succeeding Year, respectively.
104.1.2.
Any Taxpayer who first anticipates any Net Profit after April 15
of the Current Year shall make and file the declaration hereinabove
required on or before June 15 of the Current Year, September 15 of
the Current Year, or December 31 of the Current Year, whichever of
these dates next follows the date on which the Taxpayer first anticipates
such Net Profit, and pay to the Officer in equal installments the
tax due thereon on or before the quarterly payment dates which remain
after the filing of the declaration.
104.1.3.
Every Taxpayer shall, on or before April 15 of the Succeeding Year,
make and file with the Officer, on a form prescribed or approved by
the Officer, a final return showing the amount of Net Profits earned
during the period beginning January 1 of the Current Year and ending
December 31 of the Current Year, the total amount of tax due thereon
and the total amount of tax paid thereon. At the time of filing the
final return, the Taxpayer shall pay to the 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 his estimated tax, elect to make and file with the Officer, on
or before January 31 of the Succeeding Year, the final return as hereinabove
required.
104.1.4.
The Officer is authorized to provide by regulation for the making
and 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 hereinabove required anticipates additional
Net Profits not previously declared or finds that he has overestimated
his anticipated Net Profits.
104.1.5.
Every Taxpayer who discontinues Business prior to December 31 of
the Current Year shall, within 30 days after the discontinuance of
Business, file his final return as hereinabove required and pay the
tax due.
104.2.
Earned Income.
104.2.1.
Annual Earned Income Tax Return: Every Taxpayer shall, on or before
April 15 of the Succeeding Year, make and file with the Officer on
a form prescribed or approved by the Officer a final return showing
the amount of Earned 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 thereon, the amount of tax paid thereon,
the amount of tax thereon that has been withheld pursuant to the provisions
relating to the collection at source and the balance of tax due. At
the time of filing the final return, the Taxpayer shall pay the balance
of the tax due or shall make demand for refund or credit in the case
of overpayment.
104.2.2.
Earned Income not Subject to Withholding. Every Taxpayer who is employed
for a salary, wage, commission, or other compensation and who received
any Earned Income not subject to the provisions relating to collection
at source shall make and file with the Officer, on a form prescribed
or approved by the Officer, 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 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
the tax, together with such other information as the Officer may require.
Every Taxpayer making such return shall, at the time of filing thereof,
pay to the Officer the amount of tax shown as due thereon.
105.1.
Every Employer having an office,
factory, workshop, branch, warehouse or other place of Business within
the Municipality who employs one or more Persons, other than domestic
servants, for a salary, wage, commission or other compensation, who
has not previously registered, shall, within the 15 days after becoming
an Employer, register with the Officer his name and address and such
other information as the Officer may require.
105.2.
Every Employer having an office, factory, workshop, branch, warehouse, or other place of Business within the Municipality who employs one or more Persons, other than domestic servants, for a salary, wage, commission, or other compensation, shall deduct, at the time of payment thereof, the tax imposed by this Part 1 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 Officer 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 Officer and Employer shall show the name and Social Security number 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 upon such employee, 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.
An 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 Municipality may be required
by the Officer to file his return and pay the tax monthly. In such
cases, payments of tax shall be made to the Officer on or before the
last day of the month, succeeding the month for which the tax was
withheld.
105.3.
On or before February 28 of the Succeeding Year, every Employer
shall file with the Officer:
105.3.1.
An annual return showing the total amount of the Earned Income paid,
the total amount of tax deducted, and the total amount of tax paid
to the Officer for the period beginning January 1 of the Current Year
and ending December 31 of the Current Year.
105.3.2.
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 and Social Security number, the amount of Earned Income
paid to the employee during said period, the amount of tax deducted,
the political subdivisions imposing the tax upon such employee, the
amount of tax paid to the Officer. Every Employer shall furnish two
copies of the individual return to the employee for whom it is filed.
105.4.
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.
105.5.
Except as otherwise provided in Section 6913(IX) of the LTEA,
every Employer who willfully or negligently omits or fails to make
the deductions required by this section shall be liable for payment
of the taxes which he was required to withhold to the extent that
such taxes have not been recovered from the employee.
106.1.
It shall be the duty of the Officer to collect and receive the taxes, fines and penalties imposed by this Part 1. It shall also be his duty to keep a record showing the amount received by him from each Person or Business paying the tax and the date of such receipt.
106.2.
Each Officer, before entering upon his official duties, shall
give and acknowledge a bond to the Municipality and those other political
subdivisions also appointing him. If such political subdivisions shall
by resolution designate any bond previously given by the Officer as
adequate, such bond shall be sufficient to satisfy the requirements
of the subsection.
Each such bond shall be joint and several, with one or more
corporate sureties which shall be surety companies authorized to do
business in this Commonwealth and duly licensed by the Insurance Commissioner
of this Commonwealth.
Each bond shall be conditioned upon the faithful discharge by
the Officer, his clerks, assistants and appointees of all trusts confided
in him by virtue of his office, upon the faithful execution of all
duties required of him by virtue of his office, upon the just and
faithful accounting or payment over, according to law, of all moneys
and all balances thereof paid to, received or held by him by virtue
of his office and upon the delivery to his successor or successors
in office of all books, papers, documents or other official things
held in right of his office.
Each such bond shall be taken in the name of the Municipality
and any other appointing authority or authorities, and shall be for
the use of the political subdivision or political subdivisions appointing
the Officer, and for the use of such other Person or Persons for whom
money shall be collected or received, or as his or her interest shall
otherwise appear, in case of a breach of any of the conditions thereof
by the acts or neglect of the principal on the bond.
The Municipality or other political subdivisions appointing
the Officer or any Person may sue upon the said bond in its or his
own name for its or his own use.
Each such bond shall contain the name or names of the surety
company or companies bound thereof. The Municipality and other political
subdivisions appointing the Officer shall fix the amount of the bond
at an amount equal to the maximum amount of taxes which may be in
the possession of the Officer at any given time.
The Municipality and other political subdivisions appointing
the Officer may, at any time, upon cause shown and due notice to the
Officer, and his surety or sureties, require or allow the substitution
or the addition of a surety company acceptable to the Municipality
and such other political subdivisions for the purpose of making the
bond sufficient in amount, without releasing the surety or sureties
first approved from any accrued liability or previous action on such
bond.
The Officer’s bond shall be held in the custody of the
Secretary of the Municipality.
106.3.
The Officer charged with the administration and enforcement of the provisions of this Part 1 is hereby empowered to prescribe, adopt, promulgate and enforce rules and regulations relating to any matter pertaining to the administration and enforcement of this Part 1, including provisions for the re-examination and correction of declarations and returns, and of payments alleged or found to be incorrect, or as to which an overpayment is claimed or found to have occurred, and to make refunds in cases of overpayment, for payment of the sum involved, and to prescribe forms necessary for the administration of this Part 1. No rule or regulation of any kind shall be enforceable unless it has been approved by resolution by the Commission. A copy of such rules and regulations currently in force shall be available for public inspection.
106.4.
The 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.
106.5.
The Officer and agents designated by him are hereby authorized
to examine the books, papers, and records of any Employer or of any
Taxpayer or of any Person whom the 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 Officer reasonably believes to be an Employer or Taxpayer,
is hereby directed and required to give to the Officer, or to any
agent designated by him, the means, facilities and opportunity for
such examination and investigations, as are hereby authorized.
106.6.
Any information gained by the Officer, his agents, or by any other official or agent of the Municipality, as a result of any declarations, returns, investigations, hearings, or verifications required or authorized by this Part 1, shall be confidential, except for official purposes and except in accordance with a proper judicial order, or as otherwise provided by law.
106.7.
The Officer is authorized to establish different filing, reporting
and payment dates for Taxpayers whose fiscal years do not coincide
with the calendar year.
The Income Tax Officer shall receive such compensation for his
services and expenses as determined by the Municipality.
108.1.
The Officer may sue in the name of the Municipality for the recovery of taxes due and unpaid under this Part 1.
108.2.
Any suit brought to recover the tax imposed by this Part 1 shall be begun within three years after such tax is due, or 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:
108.2.1.
Where no declaration or return was filed by any Person although a declaration or return was required to be filed by him under the provisions of this Part 1, there shall be no limitation.
108.2.2.
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 Officer, reveals a fraudulent evasion of taxes,
there shall be no limitation.
108.2.3.
In the case of substantial understatement of tax liability of 25%
or more and no fraud, suit shall be begun within six years.
108.2.4.
Where any Person has deducted taxes under the provisions of this Part 1, and has failed to pay the amounts so deducted to the Officer, or where any Person has willfully omitted or failed to make the deductions required, there shall be no limitation.
108.2.5.
This section shall not be construed to limit the Municipality from
recovering delinquent taxes by any other means provided by the LTEA.
108.3.
The Officer 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 ½ 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 the costs of collection and the interest and penalties imposed in this Part 1.
110.1.
Any Person who fails, neglects, or refuses to make any declaration or return required by this Part 1, any Employer who fails, neglects or refuses to register 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 Officer or any agent designated by him to examine his books, records, and papers, and any Person who refuses to permit the Officer 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 attempts 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 Part 1 shall, upon conviction thereof before any magistrate or court of competent jurisdiction in Allegheny County, be sentenced to pay a fine of not more than $500 for each offense, and costs, and, in default of payment of said fine and costs to be imprisoned for a period not exceeding 30 days.
110.2.
Any Person who divulges any information which is confidential under the provisions of this Part 1 shall, upon conviction thereof before any magistrate 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 said fines and costs to be imprisoned for a period not exceeding 30 days.
The Officer shall have power, in case of the neglect or refusal
of any Person, co-partnership, Association, or Corporation, to make
payment of the amount of any tax due by him, after two months from
the date of the tax notice, to levy the amount of such tax, any penalty
due thereon, and costs, not exceeding costs and charges allowed constables
for similar services by distress and sale of the goods and chattels
of such delinquent, wherever situate or found, upon giving at least
10 days’ public notice of such sale, by posting 10 written or
printed notices and by one advertisement in a newspaper of general
circulation published in Allegheny County.
No failure to demand or collect any taxes by distress and sale
of goods and chattels shall invalidate any return made, or lien filed
for nonpayment of taxes, or any tax sale for the collection of taxes.
The Officer shall demand, receive and collect from all Corporations,
political subdivisions, Associations, companies, firms or Individuals,
employing Persons owing delinquent Earned Income taxes, or whose spouse
owes delinquent Earned Income taxes, or having in possession unpaid
commissions or earnings belonging to any Person or Persons owing delinquent
Earned Income taxes, or whose spouse owes delinquent Earned Income
taxes, upon the presentation of a written notice and demand certifying
that the information contained therein is true and correct, and containing
the name of the taxable or the spouse thereof, and the amount of tax
due. Upon the presentation of such written notice and demand, it shall
be the duty of any such Corporation, political subdivision, Association,
company, firm or Individual to deduct from the wages, commission or
earnings of such individual employees, then owing or that shall within
60 days thereafter become due, or from any unpaid commissions or earnings
of any such taxable in its or his possession, or that shall within
60 days thereafter come into its or his possession, a sum sufficient
to pay the respective amount of the delinquent Earned Income taxes,
and costs, shown upon the written notice or demand, and to pay the
same to the Officer within 60 days after such notice shall have been
given. No more than 10% of the wages, commissions or earnings of the
delinquent Taxpayer or spouse thereof may be deducted at any one time
for delinquent Earned Income taxes and costs. Such Corporation, political
subdivision, Association, firm or Individual shall be entitled to
deduct from the moneys collected from each employee the costs incurred
from the extra bookkeeping necessary to record such transactions,
not exceeding 2% of the amount of money so collected and paid over
to the Officer. Upon the failure of any such Corporation, political
subdivision, Association, company, firm or Individual to deduct the
amount of such taxes or to pay the same over to the Officer less the
cost of bookkeeping involved in such transaction, as herein provided,
within the time hereby required, such Corporation, political subdivisions,
Association, company, firm or Individual shall forfeit and pay the
amount of such tax for each such taxable whose taxes are not withheld
and paid over, or that are withheld and not paid over together with
a penalty of 10% added thereto, to be recovered by an action of assumpsit
in a suit to be instituted by the Officer, or by the proper authorities
of the Municipality, as debts of like amount are now by law recoverable,
except that such Person shall not have the benefit of any stay of
execution or exemption law. The officer shall not proceed against
a spouse or his employer until he has pursued collection remedies
against the delinquent taxpayer and his employer as provided herein.
Upon presentation of a written notice and demand under oath
or affirmation, to the State Treasurer or any other fiscal officer
of the State, or its boards, authorities, agencies or commissions,
the Officer shall request the State Treasurer or other fiscal officer
of the State to deduct from the wages then owing, or that shall within
60 days thereafter become due to any employee, a sum sufficient to
pay the respective amount of the delinquent Earned Income taxes and
costs shown on the written notice. The same shall be paid to the Officer
within 60 days after such notice shall have been given.
The officer shall, at least 15 days prior to the presentation
a written notice and demand to the State Treasurer or other fiscal
officer of the State, or to any Corporation, political subdivision,
association, company or Individual, notify the taxpayer owing the
delinquent tax by registered or certified mail that a written notice
and demand shall be presented to his employer unless such tax is paid.
The return receipt card for certified or registered mail shall be
marked delivered to addressee only, and the cost of notification by
certified or registered mail shall be added to the costs for collecting
taxes.
The Officer shall have power to collect unpaid taxes from the
Persons owing such taxes by suit in assumpsit or other appropriate
remedy. Upon each such judgment, execution may be issued without any
stay or benefit of any exemption law. The right to collect unpaid
taxes under the provisions of this section shall not be affected by
the fact that such taxes have been entered as liens in the office
of the Prothonotary, or the fact that the property against which they
were levied has been returned to the County Commissioners for taxes
for prior years.
The Officer is hereby authorized to accept payment under protest
of the amount of tax claimed by the Municipality in any case where
any Person disputes the validity or amount of the Municipality’s
claim for the tax. If it is thereafter judicially determined by a
court of competent jurisdiction that there has been an overpayment
to the Officer, the amount of the overpayment shall be refunded to
the Person who paid under protest.
The tax imposed by this Part 1 shall not apply:
117.1.
To any Person as to whom it is beyond
the legal power of the Municipality to impose the tax herein provided
for under the Constitution of the United States or the Constitution
or the laws of the Commonwealth of Pennsylvania.
117.2.
To institutions or organizations operated for public, religious,
educational or charitable purposes, to institutions or organizations
not organized or operated for private profit, or to trusts and foundations
established for any of the said purposes.
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This section shall not be construed to exempt any Person who is an Employer from the duty of collecting that tax at source from his employees and paying the amount collected to the Officer under the provisions of §18-105 of this chapter.
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The provisions of Section 6913 of the LTEA (including any and all amendments thereto) and all other applicable provisions of the LTEA not specifically set forth herein are incorporated in this Part 1 by reference.
