[Adopted 12-27-2006 by Ord. No. 15-2006 (Art. 303 of the 1979 Codified Ordinances)]
[1]
Editor's Note: Act 160 of 1967 removes from Act 511 of 1965, the Local Tax Enabling Act, the provisions of Sections 4, 5 and 7 of the act relating to annual re-enactment of taxes and specified that every tax levied under the provisions of the act would continue in force on a calendar or fiscal year basis without annual re-enactment unless the rate of the tax is subsequently changed. Copies of Regulations promulgated by the Income Tax Officer are published in booklet form and available at the office of the Bureau of Earned Income Tax.
The following words and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates or requires a different meaning.
ASSOCIATION
Means a partnership, limited partnership or any other unincorporated group of two or more persons.
BUREAU
Means the Bureau of Earned Income Tax designated by Council to administer the provisions of the tax on earned income under the direction of the Treasurer.
BUSINESS
Means an enterprise, activity, profession or undertaking of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, partnership, association or any other entity.
CORPORATION
Means a corporation or joint stock association organized under the laws of the United States, the Commonwealth of Pennsylvania or any other state, territory, foreign country or dependency.
COUNCIL
Means the City Council of Chester.
EARNINGS
Mean salaries, wages, commissions and other compensation as defined in this article.
EMPLOYER
Means an individual, partnership, association, corporation, governmental body or unit or agency, or any other entity employing one or more persons on a salary, wage, commission or other compensation basis.
INCOME TAX OFFICER
Means that person designated by Council to administer the provisions of the tax on earned income.
NET PROFITS
Means the net income from the operation of a business, profession or other activity, after provision for all costs and expenses incurred in the conduct thereof, either paid or accrued in accordance with the accounting system used in such business, profession or other activity, but without deduction of taxes, based on income.
NONRESIDENT
Means an individual, partnership, association or other entity domiciled outside the City of Chester.
PERSON
Means a natural person, partnership, corporation, fiduciary, or association. Whenever used in any section prescribing and imposing a penalty, the term "person" as applied to associations means the partners or members thereof, and as applied to corporations, the officers thereof.
PERSONAL PRONOUNS
Include the singular as well as the plural number and the male, neuter and female gender.
RESIDENT
Means an individual, partnership, association or other entity domiciled in the City of Chester.
SALARIES, WAGES, COMMISSIONS AND OTHER COMPENSATION
Mean salaries, wages, commissions, bonuses, incentive payments, fees and tips that may accrue or be received by an individual for services rendered, whether directly or through an agent and whether in cash or in property; not including periodic payments for sick or disability benefits and those commonly recognized as old-age benefits, retirement pay or pensions, paid to persons retired from service after reaching a specific age or after a stated period of employment, or public assistance or unemployment compensation payments made by any governmental agency or any wages or compensation paid by the United States to any person for active service in the Army, Navy or Air Force of the United States or any bonus or additional compensation paid by the United States or the Commonwealth of Pennsylvania or any other state for such service.
TAXABLE
Means subject to the tax imposed by this article.
TAXPAYER
Means a person, whether an individual, partnership, association or any other entity, required hereunder to file a return of earnings or net profits, or to pay a tax thereon.
TREASURER
Means the City Treasurer of the City of Chester.
YEARS
A. 
CURRENT YEARMeans the calendar year for which the tax is levied.
B. 
PRECEDING YEARMeans the calendar year before the current year.
C. 
SUCCEEDING YEARMeans the calendar year following the current year.
[Amended 12-28-2022 by Ord. No. 9-2022; 12-18-2024 by Ord. No. 13-2024; 12-10-2025 by Ord. No. 10-2025]
A. 
A tax for general revenue purposes of 3.75% is hereby imposed on the following:
(1) 
Salaries, wages, commissions and other compensation earned on and after January 1, 2026, by individual residents of the City of Chester.
(2) 
Net profits, earned on and after January 1, 2026, by residents of the City of Chester.
B. 
A tax for general revenue purposes of 2% is hereby imposed on the following:
(1) 
Salaries, wages, commissions and other compensation earned on and after January 1, 2026, by individual nonresidents of the City of Chester.
(2) 
Net profits, earned on and after January 1, 2026, in the City of Chester by nonresidents of the City of Chester.
C. 
The tax levied under Subsection A hereof shall relate to and be imposed upon salaries, wages, commissions and other compensation paid by an employer or on his behalf to a person who is employed by him. The tax levied under Subsection B hereof shall relate to and be imposed on the net profits of any business, profession or other activity carried on by any person or persons.
D. 
Every corporation which is subject to the Pennsylvania Corporate Net Income Tax or exempt from the Pennsylvania Franchise Tax, shall be on exempt from the tax imposed by this article.
E. 
The tax levied by this article shall be applicable to salaries, wages, commissions and other compensation and to net profits earned after January 1, 2026, for nonresidents and after January 1, 2026, for residents.
A. 
Net profits.
(1) 
Every person hereinafter called "taxpayer," who reasonably expects that he will earn any taxable net profits during the period after January 1, 1966, shall on or before April 15, of the current year, make and file with the Treasurer a form prescribed by the Bureau, a declaration of his estimated net profits for the period beginning January 1 and ending December 31, setting forth the estimated amount of his net profits reasonably expected by him for the period and subject to the tax, the amount of estimated tax imposed by this article on such estimated net profits, and such other relevant information as the Bureau may require. The taxpayer making the declaration shall, at the time of filing thereof, pay the City of Chester 1/4 of the estimated tax shown as due thereon and such taxpayer shall thereafter pay 1/4 of the estimated tax in each of three installments as follows: one installment on or before June 15 and one installment on or before September 15 of the current year and the last installment on or before January 15 of the succeeding year.
(2) 
A person who on April 15 did not reasonably expect that he would earn any taxable net profits during the period between January 1 and December 31, and who subsequent to April 15 reasonably expects that he will earn taxable net profits on or before December 31 shall make and file on or before June 15 and September 15 of the current year or January 15 of the succeeding year, whichever of these dates next follows the date on which the taxpayer first reasonably expects such net profits, a declaration similar to that required under the foregoing Subsection A(1). The taxpayer making the declaration shall, at the time of filing thereof, pay to the City the estimated tax shown as due thereon, provided, however, that the taxpayer has the right to pay the estimated tax in equal installments on or before the quarterly installment payment dates which remain after the filing of the declaration.
(3) 
The Income Tax Officer is hereby authorized to provide by regulation, subject to approval of Council, for the making and filing of adjusted declarations of estimated net profits, and for the payment of the estimated tax in cases where a taxpayer who has filed the declaration hereinabove required shall thereafter either reasonably expect additional net profits not previously declared or finds that he has overestimated his net profits.
(4) 
On or before April 15 of the succeeding year, every taxpayer who has earned taxable net profits shall make and file with the Treasurer, on a form prescribed by the Bureau, a final return showing all of such net profits for the period beginning January 1 and ending December 31 of the current year, the total amount of tax due, the amount of estimated tax paid under the provisions of this section and the balance due. When the return is made for a fiscal year different from the calendar year, the return shall be made within 105 days from the end of the fiscal year. The percentage of the total net profits of any fiscal year of a taxpayer beginning or ending within the period beginning January 1 and ending December 31 of the current year, to which the tax imposed by this article is applicable shall be equal to the same percentage of such total net profits as the number of days in any such year within such period bears to the total number of days in any such year. 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.
(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 herein required, pay the tax due or demand refund or credit in the case of overpayment. Any taxpayer may in lieu of paying the fourth quarterly installment of his tax, elect to make and file with the Treasurer, on or before January 15 of the succeeding year, the final return as required above.
B. 
Salaries, wages, commissions and other compensation.
(1) 
Every taxpayer who is employed on a salary, wage, commission or other compensation basis and who reasonably expects to earn any taxable earnings not subject to the provisions of § 503-4 relating to the collection at source, shall, on or before April 15 of the current year, make and file with the Treasurer, a declaration of his estimated total amount of taxable salaries, wages, commissions and other compensation for the period beginning January 1 and ending December 31 of the current year, the estimated amount of the tax thereon that will be deducted therefrom pursuant to § 503-4, the estimated amount of tax imposed by this article that will not be deducted therefrom pursuant to § 503-4 and such other relevant information as the Bureau may require. In preparing his declaration of estimated taxable salaries, wages, commissions and other compensation taxable under this article, the taxpayer shall use the same amounts with respect to such items as he used in preparing his declaration of estimated tax for the preceding year for federal income tax purposes, if such taxpayer shall be required to file any such last mentioned declaration. The taxpayer making the declaration shall at the time of filing thereof pay the City of Chester the balance shown as due thereon or he shall have the right to pay 1/4 of the balance shown due thereon and such taxpayer shall thereafter pay 1/4 of the balance in each of three installments as follows: one installment on or before June 15 and one installment on or before September 15 of the current year and the last installment on or before January 15 of the succeeding year.
(2) 
A person who on April 15 of the current year did not reasonably expect that he would earn any salaries, wages, commissions and other compensation not subject to the provisions of § 503-4 relating to the collection at source, during the period between January 1 and December 31 of the current year and who subsequent to April 15 of the current year reasonably expects that he will earn salaries, wages, commissions and other compensation not subject to the provisions of § 503-4 on or before December 31 of the current year shall make and file on or before June 15 and September 15 of the current year or January 15 of the succeeding year, whichever of these dates next follows the date on which the taxpayer first reasonably expects that he will earn such salaries, wages, commissions and other compensation, a declaration similar to that required under the immediately foregoing Subsection B(1). The taxpayer making the declaration shall at the time of filing thereof pay to the City of Chester the estimated tax as shown as due thereon, provided, however, that the taxpayer shall have the right to pay the estimated tax in equal installments on or before the quarterly installment payment dates which remain after the filing of the declaration.
(3) 
The Income Tax Officer is hereby authorized to provide by regulation, subject to approval of Council, for the making and filing of adjusted declarations of estimated salaries, wages, commissions and other compensation, and for the payments of the estimated tax in case where a taxpayer who has filed the declaration hereinabove required shall thereafter either reasonably expect additional salaries, wages, commissions and other compensation not previously declared or find that he has over-estimated his salary, wages, commissions and other compensation.
(4) 
On or before April 15 of the succeeding year, every taxpayer who has received taxable salaries, wages, commissions and other compensation shall make and file with the Treasurer on a form prescribed by the Bureau, a final return showing all such salaries, wages, commissions and other compensation earned during the period beginning January 1 and ending December 31 of the current year, the total amount of tax due thereon, the amount of estimated tax thereon paid under the provisions of this section, if any, and the amount, if any, of the tax thereon that has been withheld pursuant to the provisions of § 503-4 and the balance of tax due. At the time of filing the final return as required hereunder, the taxpayer shall file the prescribed form and any supporting documents required by the Earned Income Tax Officer. He shall at the same time pay any balance due on account of the tax together with any penalty and interest which may be due. A filing of the final return shall be deemed incomplete unless all conditions of this section have been complied with by the taxpayer. Where a refund is due, the taxpayer shall at the time of filing the final return make demand either for a refund or a credit to his account.
(5) 
Any taxpayer may in lieu of paying the fourth quarterly installment of his tax, elect to make and file with the Treasurer, on or before January 15 of the succeeding year, the final return as required above.
A. 
Every person within the City of Chester who employs one or more persons on a salary, wage, commission or other compensation basis, other than domestic servants, shall deduct at the time of the payment thereof, the tax imposed by this article on the salaries, wages, commissions and other compensation due to his employee or employees, and shall on or before April 30, July 31 and October 31 of the current year and January 31 of the succeeding year, respectively, make and file with the Treasurer on a form prescribed by the Bureau, a return setting forth the taxes so deducted and pay to the City of Chester the amount of taxes deducted for the preceding quarter ending March 31, June 30, September 30 and December 31 of the current year, respectively. The Income Tax Officer is hereby authorized to provide by regulations approved by Council for payments on a monthly basis where an aggregate amount of tax in excess of $50 per month is deducted.
B. 
On or before January 31 of the succeeding year, every such employer shall file with the Treasurer on forms prescribed by the Bureau:
(1) 
An annual return showing the total amount of salaries, wages, commissions and other compensation earned by his employees, on which a tax is imposed by this article, the total amount of tax deducted and the total amount of tax paid to the City of Chester in respect of salaries, wages, commissions and other compensation earned by his employees during the period beginning January 1 and ending December 31 of the current year; and
(2) 
A return in respect of each person who was an employee during all or any part of the period beginning January 1 and ending December 31 of the current year, and who earned during such period any salaries, wages, commissions or other compensation subject to the tax imposed by this article, setting forth the employee's name, address and Social Security number, the amount of such salaries, wages, commissions or other compensation earned by the employee during such period, the amount of tax deducted therefrom and such other relevant information as the Bureau may require. Every employer shall furnish a copy of the individual return to the employee in respect to whom it was filed.
C. 
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 hereinabove required and pay the tax due, except that immediate returns and the payment of any tax due thereon may be required upon the discontinuance of any temporary business.
D. 
Any employer required to withhold the tax from employees as herein provided shall be personally liable for the payment of the tax in the event such employer does not for any reason deduct the tax from employees and transmit to the City. This liability shall be in addition to interest and penalties for failure to withhold, file or transmit as imposed elsewhere herein.
E. 
The failure or omission of any employer to make the deductions required by this section shall not relieve any employee from the payment of the tax or from complying with the requirements of this article relating to the filing of declarations and returns.
F. 
If an employer makes a deduction of tax as required by this section, the amount deducted shall constitute in the hands of such employer a trust fund held for the account of the City of Chester as beneficial owner thereof and the employee from whose salaries, wages, commissions or other compensation such tax was deducted shall be deemed to have paid such tax.
It shall be the duty of the Treasurer to collect and receive the taxes, fines and penalties imposed by this article. It shall also be his duty to keep a record showing the amount received by him 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.
A. 
The Income Tax Officer is hereby charged with the administration and enforcement of the provisions of this article, and is hereby empowered to prescribe, adopt, promulgate, and enforce rules and regulations relating to any matter pertaining to the administration and enforcement of this article, subject to approval of Council, 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, reasonable extensions of time upon proper cause shown for filing declarations or returns, and to prescribe forms necessary for the administration of this article.
B. 
The Income Tax Officer, and agents designated by him, in writing, are hereby authorized to examine the books, papers and records of any person in order to verify the accuracy of any declaration or return, or if no declaration or return be filed, to ascertain the tax due. Every person is hereby directed and required to give to the Income Tax Officer or to any agent so designated by him the opportunity for such examination and investigations as are hereby authorized.
C. 
Any information gained by the Income Tax Officer, his agents or by any other official, agent or employee of the City of Chester as a result of any declaration, returns, investigations, hearings or verifications 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.
D. 
Any person aggrieved by any action of the Income Tax Officer shall have the right of appeal as provided by law.
A. 
The Treasurer may sue in the name of the City of Chester for the recovery of taxes due and unpaid under this article.
B. 
Any suit brought to recover the tax imposed by this article shall be begun within six years after such tax is due or within six years after a 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:
(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 article.
(2) 
In the case of a false or fraudulent declaration or return with the intent to evade tax.
(3) 
Where any person has deducted taxes under the provisions of this article and has failed to pay the amounts so deducted to the City of Chester.
If for any reason the tax is not paid when due, the interest at the rate of 6% per annum on the amount of such tax, and an additional penalty of 0.5% 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 herein imposed.
The Treasurer is hereby authorized to accept payment of the amount of tax claimed by the City in any case where any person disputes the validity or amount of the City'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 Treasurer, the amount of the overpayment shall be refunded to the person who paid.
A. 
The tax imposed by this article shall not apply:
(1) 
To any person as to whom it is beyond the legal power of the City of Chester to impose the tax herein provided for under the Constitution of the United States and the Constitution and Laws of the Commonwealth of Pennsylvania.
(2) 
To the net profits of any institution or organization operated for public, religious, educational or charitable purposes; to an institution or organization not organized or operated for private profit, or to a trust or a foundation established for any of these purposes.
B. 
This section shall not be construed to exempt any person who is an employer from the duty of collecting the tax at source from his employees and paying the amount collected to the City of Chester under the provisions of § 503-4.
The provisions of this article are severable. If any sentence, clause, or section of this article if for any reason is found to be unconstitutional, illegal or invalid, such unconstitutionality, illegality or invalidity shall not affect or impair any of the remaining provisions, sentences, clauses or sections of this article. It is hereby declared to be the intent of Council that this article would have been adopted had such unconstitutional, illegal or invalid sentence, clause or section not been included herein.
This article shall become effective January 1, 1966, and shall remain in full force and effect until changed by ordinance of Council.
A. 
Any person who fails, neglects or refuses to make any declaration or return required by this article; any person who fails, neglects or refuses to pay the tax deducted from his employees; any person who refuses to permit the Income Tax Officer or any agent properly designated by him to examine his books, records and papers; and any person who makes incomplete, false or fraudulent return to avoid the payment of the whole or any part of the tax imposed by this article, shall be fined not more than $500 for each offense and costs, and in default of payment thereof, shall be imprisoned for not more than 30 days.
B. 
Any person who, except as permitted by the provisions of § 503-6C, divulges any information which is confidential under the provisions of such subsection shall be fined not more than $500 for each offense and costs, and in default of payment thereof, shall be imprisoned for not more than 30 days.
C. 
The penalties imposed under this section shall be in addition to any other penalty imposed by any other section of this article.
D. 
The failure of any person to receive or procure the forms required for making any declaration or return required by this article shall not excuse him from making such declaration or return.