This article enacted hereunder shall be known as the "Mercantile License Tax."
[Adopted 3-14-1988 by Ord. No. 452, § 2(Ch. 24, Part 4, of the 2005 Code of Ordinances)]
A. BOROUGH COLLECTOR GROSS RECEIPTS LICENSE TAX YEAR PERSON RETAIL DEALER OR RETAIL VENDOR SECRETARY SERVICE TEMPORARY, SEASONAL OR ITINERANT BUSINESS WHOLESALE AND RETAIL DEALER or WHOLESALE AND RETAIL VENDOR WHOLESALE DEALER or WHOLESALE VENDOR
The following words and phrases, when used in this article, shall have the meanings ascribed to them in this section unless the context clearly indicates a different meaning:
The Borough of Rockledge.
The collector of business privilege and mercantile taxes of the Borough of Rockledge or any other person from time to time designated by Borough Council.
Includes both cash and credit transactions as provided by law. The gross receipts upon which the tax is imposed is the value of all cash, credits or property received by a person which is attributable to the carrying on of business in the Borough, undiminished by any costs of doing business. A receipt generally will be considered attributable to the Borough if any part of the transaction or service giving rise to the receipt takes place within the Borough. Please refer to §§ 507-45, 507-46 and 507-47 regarding deductions, exclusions and exemptions from gross receipts.
The 12-month period beginning the first day of January and ending the last day of December.
An individual, a partnership, limited partnership, association, or a corporation, or any other legal entity which engages in a taxable activity.
Any person who is a dealer in or a vendor of goods, wares and merchandise who is not a wholesale dealer or vendor, wholesale and retail dealer or vendor, as hereinafter defined. Also included in this definition is any person conducting a restaurant or other place where food, drink or refreshments are sold in the Borough.
The Secretary of the Borough of Rockledge.
Any act or instance of helping or benefiting another for a consideration.
Any business that is conducted at one location for less then 60 consecutive calendar days.
Any person who sells to dealers in or vendors of goods, wares and merchandise and to other persons.
Any person who sells to dealers in or vendors of goods, wares and merchandise and to no other persons.
B.
The terms as hereinbefore defined in this section shall not include the following: employees, agencies of the government of the United States or of the Commonwealth of Pennsylvania, of nonprofit corporations or associations organized solely and exclusively for religious, educational or charitable purposes and not conducting any regular or established business competing commercially with any other person subject to the tax herein imposed, or any person vending or disposing of articles of his/her own manufacture for shipment of delivery from the place of the manufacture thereof, or any farmer vending or disposing of his/her own produce or other transaction exempted by law, or those persons, entities, transactions and other matters exempted by the provisions of the Local Tax Enabling Act[1] or other applicable law.
[1]
Editor's Note: See 53 P.S. § 6924.101 et seq.
A.
The license and tax provisions of this article apply to any persons who are wholesale or retail vendors or dealers in goods or who conduct restaurants or other places where food or beverages are sold, except for those persons who engage in any business, trade, occupation, profession or vocation in which there is offered any service or services to the general public or a limited number of the general public for a consideration, and who are thus subject to the business privilege tax.
B.
This article applies not only to businesses in existence at the beginning of the license year but also to businesses begun during the tax year or carried on in the Borough for any part of the tax year.
A.
If the taxpayer has a place of business in the Borough and one of more places of business outside the Borough, only those receipts property allocable to the place of business in the Borough are taxable. For this purpose, a person may be considered to have a place of business outside the Borough if services are rendered at a fixed location outside the Borough which are of such duration, size and complexity that the person would be considered doing business at such location.
B.
Generally, receipts will be considered allocable to the place of business in the Borough if any significant aspect of the transaction occurs at or arises out of that place of business. For example, if a contract is made at the place of business in the Borough, the receipts arising from that contract may be allocable to the Borough even though all or part of the contract is to be performed outside the Borough. The fact that the receipts from any transaction may be subject to tax in a jurisdiction outside the Borough does not necessarily mean that those receipts are not allocable to the Borough and business within and without the Borough.
In general, the gross receipts upon which the tax is imposed is the value of all cash, credits or property received by a person which is attributable to the carrying on of business in the Borough, undiminished by any costs of doing business. A receipt generally will be considered attributable to the Borough if any part of the transaction or service giving rise to the receipt takes place within the Borough. The broad reach of this general rule is limited in certain situations by the ordinance and by state and federal law, as more fully explained in § 507-47.
A tax return may be filed on a cash basis or on an accrual basis, but the return must be prepared in accordance with the method of accounting regularly employed in keeping books of the taxpayer. A person who keeps his/her books on the cash basis will report his/her gross receipts on the basis of amounts actually received during the period used as the measure of the tax. A taxpayer who keeps his/her books on the actual basis will report the receipts from all sales made or services rendered during the period used as the measure of the tax, irrespective of the date when such moneys are collected from the customer. In either case, the taxpayer must file on a calendar-year basis beginning January 1 and ending December 31, regardless of the taxpayer's fiscal year.
A.
Refunds, credits or allowances given by a person to a customer on account of defects in services rendered or in goods, wares and merchandise sold or returned may be deducted from the amount of the gross receipts of the person.
B.
Adjustments allowed to customers may be deducted from gross receipts if they are deducted on the face of the invoice as a medium of adjusting the price or fee for the service and if they are not reimbursed to the person by his/her supplier or some other person.
C.
Federal, state and local taxes are not included in gross receipts if they are collected from the customer and are separately stated on the invoice of charge or sale.
This article excludes from the definition of gross receipts the receipts from the sale of goods, wares and merchandise, wholesale and retail, from a place of business regularly maintained outside the Borough by the taxpayer to a place of business regularly maintained outside the Borough by the customer, provided that such sales are not made for the purpose of evading the tax. Sales or deliveries to a residence located outside the Borough do not qualify for this exclusion. Also, this exclusion does not apply to factors or commission merchants except with respect to sales of goods which they have taken title to and sold for their own account.
Under certain circumstances receipts from sales in interstate or foreign commerce may be exempt from tax in whole or in part, even though they are allocable to a place of business in the Borough under § 507-42 above. Receipts are not automatically exempt from tax merely because the sale involves interstate or foreign commerce. The controlling principles in determining whether any such receipts are subject to tax are that there be some nexus or connection between the business activity carried on in the Borough and the imposition of the tax and that there be a fair method of allocation of receipts to the business carried on in the Borough which will avoid an undue burden on interstate commerce. The burden is generally on the taxpayer to establish that the receipts are exempt from tax. Bearing these principles in mind, the following methods of allocation will be followed by the Borough:
A.
Receipts directly payable or paid to a place of business located within the Borough shall be considered allocable to the Borough and subject to tax.
B.
If the collector determines, either upon his/her own initiative or upon application by the taxpayer, that the receipts covered by Subsection A above do not properly reflect all receipts attributable to the activity carried on in the Borough, then to the extent possible (bearing in mind the accounting system used by the taxpayer and any other information reasonably capable of being derived from the books and records of the taxpayer) a separate accounting shall be made with respect to each place of business in the Borough, and all receipts attributable to the place of business shall be considered allocable to the Borough and subject to tax.
C.
If the collector determines, either on his/her own initiative or upon application by the taxpayer, that the provisions of Subsections A and B above do not properly reflect all receipts attributable to the activity carried on in the Borough, a different method of allocation may be used, with due regard to the extent of the receipts, property and wages of the taxpayer within the Borough, the nature of the business concerned, the number of jurisdictions in which the receipts may be taxed, and such other factors as may be considered relevant.
D.
All receipts from interstate commerce, whether taxable or nontaxable under the foregoing rules, must be included on the return filed by the taxpayer, and a deduction for the nontaxable receipts shall be allowed thereon.
A person who engages in a business with gross receipts from wholesale or retail sales of merchandise or restaurant is required to register to obtain a mercantile license under this article.
A separate license must be obtained each year for each place of business in the Borough. The license must be obtained on or before the first day of each tax year (as defined above) if the business was begun prior to that tax year. If a business is begun or a new place of business established during the tax year, the license must be obtained prior to commencing business. The license shall be valid for the location for which it was issued and the applicant only and shall not be assignable.
The license is issued for a tax year (as defined above) of each year. A license obtained at any time during the year is valid only from the date of issue until the end of the year with respect to which it is issued.
Before the issuance of a license, the applicant shall make payment to the collector of a registration fee for each place of business. The fee shall be $15.
All license fees due under this article and not paid by the first day of the tax year (as defined above) shall bear interest at the rate of 1% per month or fractional part of a month from the day they are due and payable until paid. If any person shall neglect or refuse to obtain a license as herein required, an additional penalty of 10% of the license fee shall be added by the collector and collected.
A.
The application for license forms shall be available from the collector appointed by the Borough. Failure to obtain or receipt the application form shall not excuse any person from the obligation to file and obtain the license or the mercantile license tax return or payment of the applicable tax hereunder.
B.
Each application for a license shall be signed by the applicant if a natural person, and in the case of an association or a partnership, by a member or partner thereof, and in the case of a corporation, by an officer thereof.
C.
All applications for license shall be filed with the collector.
D.
In the case of loss, defacement, or destruction of any license, the person to whom the license was issued shall apply to the collector for a new license, for which a fee of $1 shall be charged.
Every person who is a wholesale vendor or dealer in goods, wares and merchandise of every kind in the Borough of Rockledge shall pay an annual mercantile license tax for the tax year at the rate of one mill on gross receipts for wholesale business, and every person who is a retail vendor or dealer in goods, wares and merchandise of every kind, in the Borough of Rockledge shall pay an annual mercantile license tax for the tax year at the rate of 1 1/2 mills on gross receipts for retail business; provided, however, that in no event shall the annual mercantile license tax herein imposed be less than $15.
A return must be filed and an estimated tax must be paid for each tax year at the time set forth in § 507-56 below. The estimated tax is computed on the estimated gross receipts for the tax year, which is determined as described in § 507-57 below. At the end of each tax year the actual gross receipts for the year must be determined and an appropriate adjustment made in the tax due. This adjustment will be shown on the final return for the tax year. The final return for the prior tax year will be combined with, and thus filed at the same time as, the estimated return for the current year, and a single payment made in an amount equal to the estimated tax for the current year, increased or decreased by the adjustment for actual gross receipts for the prior year.
Every person subject to this article shall file a return as follows:
A.
If the person has commenced business, either for a full year or less than a full year, prior to January 1 of the tax year, the return shall be filed on or before May 1 following the tax year.
B.
If the person commences business after the start of any tax year (as defined above), the return shall be filed within 40 days from the date of commencing business.
C.
If the person is engaged in a business which is temporary, seasonal or itinerant in its nature, the return shall be filed within seven days of the completion of such business.
D.
If the person discontinues, terminates or otherwise ceases business activity at the registered location, the return shall be filed within 30 days of such cessation of business activity.
The estimated gross receipts for each tax year shall be determined as follows:
A.
If the taxpayer has been engaged in business in the Borough for a full year prior to January 1 of a tax year, the actual gross receipts for that prior year shall be the estimated gross receipts for the tax year.
B.
If the taxpayer has been engaged in business in the Borough prior to January 1 of the tax year but for less than one full year, the estimated gross receipts for any tax year shall be the average monthly gross receipts for the prior year multiplied by 12.
C.
If the taxpayer commences business in the Borough during the tax year, the estimated gross receipts shall be determined by multiplying the gross receipts for the first month of business by the number of months remaining in the tax year.
D.
In the case of a temporary, seasonal or itinerant business for which a return is filed as provided in § 507-56C above, no estimate is computed. Instead, the tax is imposed on the actual gross receipts during the period covered by the return.
E.
Any person who engages in business with gross receipts from wholesale or retail sales of merchandise or from a restaurant and from service, who registers under the mercantile tax requirements and the business privilege tax requirements, shall combine and report gross receipts in a single return but at the rates applicable, respectively, to gross receipts under the business privilege tax or mercantile license tax.
A.
At the time of filing the tax return on May 1 of any tax year, except as hereinbefore provided, the person shall pay in a single payment an amount equal to the estimated tax for the current year and any balance due for actual gross receipts for the prior year at the rates applicable, respectively, under the business privilege tax or mercantile license tax.
B.
Any person with a decrease in actual gross receipts from that estimated on the prior year's return shall be entitled to a credit on the estimated tax for the current year in an amount equal to the overpayment of tax for the prior year.
C.
To the extent that a person, as defined in this article, is located in the Borough and has paid mercantile license taxes to another taxing jurisdiction for a place of business outside the Borough under those conditions referred to in § 507-42, for any taxable year commencing with 1987, in good faith and not for purposes of evading this taxing part, for which said person has also paid taxes to the Borough of Rockledge, the Borough will give a tax credit to said person up to the dollar amount of taxes represented, based upon the taxing rate in existence in Rockledge for the tax year in which paid. Sufficient proof and documentation should be submitted with the filing of the return to enable the collector to make a determination as to whether the request for credit is proper on a case-by-case basis.
A.
It shall be the duty of the collector to collect and receive all fees, taxes, interest, fines and penalties imposed by this article and to maintain a record of all payments received, the date thereof and to issue receipts therefor.
B.
The collector shall pay all fees, taxes, interest, fines and penalties collected, received or recovered under the provisions of this article into the treasury of the Borough for the use and benefit of the Borough.
C.
To the extent that a person as defined in this article is located in the Borough and has paid business privilege taxes to another taxing jurisdiction for a place of business outside the Borough under those conditions referred to in § 507-42, for any taxable year commencing with 1987, in good faith and not for purposes of evading this taxing article, for which said person has also paid taxes to the Borough of Rockledge, the Borough will give a tax credit to said person up to the dollar amount of taxes represented, based upon the taxing rate in existence in Rockledge for the tax year in which paid. Sufficient proof and documentation should be submitted with the filing of the return to enable the collector to make a determination as to whether the request for credit is proper, on a case-by-case basis.
The collector may request such books and accounting records as will enable him/her to determine the accuracy of the taxpayer's return. The taxpayer claiming exemptions or exclusions for any portion of his/her gross receipts must maintain complete records of such items; otherwise, such claims will be disallowed.
The collector is authorized to examine not only the books, papers and records of any taxpayer or supposed taxpayer in order to verify the accuracy of any return made, or if no return was made, to ascertain whether a tax should be imposed and, if so, the amount of such tax. He/she is further authorized to examine any person connected with any business concerning any gross receipts of the business which were or should have been returned for taxation, and for this purpose, may compel the production of books, papers, records and the attendance of all persons before him/her, whether as parties or witnesses, whom he/she believes to have knowledge of such business or gross receipts.
Suits for recovery of taxes may be brought within the applicable statute of limitations in Pennsylvania commencing from the date of assessment or date due, whichever is later, by the collector or Borough Solicitor, as other debts due the Borough are by law recoverable.
If for any reason the tax is not paid when due, interest at the rate of 1% of the amount of unpaid tax for each month or fraction thereof during which the tax remains unpaid shall be added to the tax. A penalty in the amount of 10% of the tax due shall be added if the taxpayer has neglected or refused to file a return or make any payment.
[Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I)]
Any person who fails, refuses or neglects to comply with the provisions of this article may be punishable, upon conviction before a Magisterial District Judge, by a fine of not more than $1,000 plus costs of prosecution and, in default of payment of fine and costs, imprisonment not exceeding 30 days. Each day that this article has not been complied with shall constitute a separate violation. Examples of violations which may result in such penalty are:
A.
Failing or refusing to obtain a certificate of registration.
B.
Making any false or untrue statement on a return.
C.
Failing or refusing to appear before the collector in person with his/her books, records or accounts for examination when required under the provisions of this article to do so, or to permit inspection of the books, records or accounts of any business in the custody or control of the person when the right to make such inspection by the collector is requested.
D.
Failing or refusing to file a return required by the Business Privilege Tax provisions of this article.
E.
Failing or refusing to pay mercantile license tax or estimated mercantile license tax required by the provisions of this article.
Nothing contained in this article shall be construed to empower the Borough to levy and collect the taxes hereby imposed on any person or any business or any portion of any business not within the taxing power of the Borough under the Constitution of the United States and the Constitution and laws of the Commonwealth of Pennsylvania.
The provisions of this article are severable and if any of its provisions or exemptions shall be held to be illegal, invalid or unconstitutional, or invalid or unconstitutional as to any part of the period designated herein as the tax year, the decisions of any court shall not affect or impair any of the remaining provisions of this article, or affect or impair its application upon any other part of the said tax year, and the requirements as to the tax shall operate as of the effective date of this article, and the computation of tax and payment thereof shall be applied and adjusted accordingly.
It is the intent of the Borough Council that any section now in effect which imposes a special license fee on specific types or kinds of business shall be and remain in full force and effect.
The collector is required to give bond to the Borough of Rockledge in an amount of $25,000 with surety provided by any corporate surety authorized to do business in the Commonwealth of Pennsylvania. The Borough Council may provide for the payment of the premium on any such bond by the Borough.