[Adopted 12-16-1986 as Ord. No. 1639; amended in its entirety 12-15-1992 by Ord. No. 1767-92]
This Article shall be known and may be cited as the "Business Privilege Tax Code," herein referred to as the "code".
The following terms, words or phrases as used in this article shall have the meanings set forth below unless the context clearly indicates a different meaning:
- A. Carrying on or exercising whether for gain or profit or otherwise within the Township any trade, business (including temporary business or itinerant), including but not limited to financial business as herein defined, profession, vocation, service, construction, communication or commercial activity, or rendering service from or attributable to a bona fide office or place of business within the Township. Any person who has no office separate from his residence located in the Township shall be considered as conducting his "business, trade, occupation or profession" from his residence, but this provision shall not be construed as permitting any business in a location where zoning laws prohibit the conduct of a business.
- B. The term "business, trade, occupation and profession" includes, without being limited to, any service or services rendered by any person as enumerated below:
- The Finance Officer of the Township of Cheltenham or his duly authorized or deputized agents.
- FINANCIAL BUSINESS
- Services and transactions rendered by banks, bankers, trust companies, credit and investment banking companies, holding companies, dealers, brokers in money, credits, commercial paper bonds, notes, securities and stocks, commodities, options and monetary metals.
- A. All gross receipts of cash, credits or property of any kind or nature received in cash or credit transactions, allocable or attributable to the Township whether derived from within or outside the Township and regardless of the taxpayer's method of accounting, for services rendered by any business, trade, occupation or profession, without deduction therefrom on account of the cost of property sold, materials used, labor, service or other cost, interest or discount paid or any other expense.
- B. The term "gross receipts" shall not include:
- (1) In the case of a financial business, the cost of securities and other property sold, exchanged, paid at maturity or redeemed or money received in payment of advances, credits and loans (not to exceed the principal amount of such advances, credits and loans) and deposits.
- (2) In the case of a broker, any portion of the fees or commissions with respect to any transactions paid by him to another broker, underwriter or insurer on account of a purchase or sale of the contract for goods, commodities or insurance contract initiated by or exercised or cleared in conjunction with such other broker.
- (3) Federal excise tax or sales tax due to the Commonwealth of Pennsylvania.
- MERCANTILE LICENSE TAX
- All definitions, conditions and provisions set forth in Article II of this chapter, known as the "Mercantile License Tax Code," are incorporated by reference and to be read in conjunction with the terms of this article.
- Any individual, partnership, limited partnership, joint venture, association, syndication, corporation or any other entity or taxpayer of any kind engaged in a business, trade, occupation or profession within the limits of the Township.
- Any act or instance of helping or benefiting another for consideration.
- TAX YEAR
- The twelve-month period beginning the first day of January (or, in the case of a person commencing business any day after the first day of January, the first day in the tax year in which a person commences a business, trade, occupation or profession in the Township) and ending the 31st day of December immediately following.
- TEMPORARY, SEASONAL OR ITINERANT BUSINESS
- Any business, trade, occupation or profession that is conducted or carried on within the limits of the Township for fewer than 30 consecutive business days during the tax year.
- The Township of Cheltenham, a First Class Township governed by the provisions of its Home Rule Charter, coextensive with the geographical boundaries of such Township.
Every person desiring to engage in a business, trade, occupation or profession within the limits of the Township shall, on or before the 15th day of April of the tax year or prior to commencing business in such tax year, make application for registration for each place of business in the Township. Such registration shall be made by the completion of an application furnished by the Collector and the payment of a fee, to be set forth from time to time by resolution of the Board of Commissioners. Each application for registration 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 case of a corporation, by an officer thereof. Each applicant shall receive a certificate of registration from the Collector, which shall not be assignable. In the case of loss, defacement or destruction of any certificate, the person to whom the certificate was issued shall apply to the Collector for a new certificate, for which a fee, to be set forth from time to time by resolution of the Board of Commissioners, shall be charged.
The failure or omission of any taxpayer subject to Article II, Mercantile License Tax, to properly comply with the requirements of this article shall result in that taxpayer's inability to renew or procure a mercantile license for his or her place of business. No such license shall be renewed or issued until the taxpayer has complied with the terms and requirements of this article. Should a business continue to engage in operations without a license, then such business is subject to pay a penalty as set forth in §§ 270-38 and 270-48 and further may be subject to closure by the Township.
All persons required to pay a business privilege tax under the provisions of this article shall be exempted from paying such tax to the extent that gross receipts are derived from the sale of goods, wares and merchandise subject to Article II of this chapter, as amended from time to time, provided that such person has also paid the appropriate mercantile tax under said Article II and supplies in the regular course of business an itemized bill to his/her vendee separating the cost of services rendered and the cost of goods, wares and merchandise supplied. The Collector or his or her delegates shall have the authority to seek rulings or opinions from the Township Solicitor and to promulgate these opinions and rulings or issue regulations.
Agencies of the Government of the United States or of the Commonwealth of Pennsylvania, or political subdivisions thereof, or not-for-profit corporations or trusts or associations organized solely and exclusively for religious, educational or charitable purposes and not conducting any regular or established business competing commercially with any person subject to the tax imposed by this article, provided that such exempt or not-for-profit corporation or entity is also exempt from income tax under the Internal Revenue Code of 1986, as amended, shall be exempt from tax under this article.
There is imposed on every person exercising the privilege of carrying on a business, trade, occupation or profession within the limits of the Township an annual business privilege tax on gross receipts for the preceding year beginning January 1, 1986, and each year thereafter at the rate of four mills on such person's gross receipts for the immediately preceding year; provided, however, that such gross receipts shall not be taxable unless in excess of two thousand five hundred ($2,500.) dollars per tax year.
All taxes and estimated taxes due and payable under this article shall bear interest at the rate of one and one-fourth percent (1 1/4%) per month or fractional part of a month from the day such tax becomes due and payable, until paid. If any person shall neglect or refuse to make any return or payment by the date as herein required, an additional 10% of the amount of tax shall be added and collected in the same manner as such tax.
In addition to the annual tax provided in § 270-38A above, every person shall pay an estimated business privilege tax at the rate of four mills of the annual estimated gross receipts for the current tax year in which engaged in a business, trade, occupation or profession within the limits of the Township, which estimated tax shall be computed as hereinafter provided.
The following subsections refer to the computation of the annual tax on estimated gross receipts:
Every person subject to the payment of the estimated tax hereby imposed who has commenced business at least a full year prior to January 1 of the tax year shall compute estimated gross receipts based upon such person's actual gross receipts during the 12 months preceding such January 1.
Every person subject to the payment of the estimated tax hereby imposed who has commenced business less than one full year prior to such January 1 shall compute estimated gross receipts by multiplying by 12 the monthly average of such person's actual gross receipts during the months while engaged in business prior to such January 1.
Every person subject to the payment of the estimated tax hereby imposed who commences business subsequent to such January 1 shall compute gross receipts for the tax year upon such person's gross receipts for the first complete month of business multiplied by the number of months remaining in the tax year.
Every person subject to the estimated tax hereby imposed shall make a return and pay the estimated tax to the Collector based on the estimated gross receipts of the taxpayer on or before April 15 of the year following in the case of a taxpayer described in § 270-39A and within 60 days after commencing to engage in business, trade, occupation or profession in the case of a taxpayer described in § 270-39B(1), (2) and (3) above.
Every return and estimated return as required by this article shall be made upon a form furnished by the Collector, with appropriate instructions to furnish such additional information as may be reasonably necessary to determine proper tax liability and to reconcile taxpayer's allocation of gross receipts with total gross receipts. Every person making such return shall certify to the correctness thereof by signing such return under penalties of perjury and criminal prosecution therefor.
Every person subject to the tax imposed by this article who has commenced business at least one full year prior to the beginning of the tax year shall, on or before the 15th day of April following, file with the Collector a return setting forth such person's name, business and business address and such other information as may be necessary to compute the annual gross receipts of such person during the preceding year and the amount of tax estimated to be due.
Every person subject to the tax imposed by this article who has commenced business less than one full year prior to the beginning of the tax year shall, on or before the 15th day of April following, file with the Collector a return setting forth such person's name, business and business address and such other information as may be necessary to compute the annual gross receipts of such person during the preceding year and the amount of tax estimated to be due.
The Collector is authorized to grant extensions of time for filing tax returns not to exceed 124 days based upon written requests received on or before the due date of such return.
At the time required for the filing of any return or estimated return hereunder, the person required to make the same shall pay the tax on the prior year's receipts and/or estimated tax on the current year's projected receipts shown or expected to be due on such return, without regard to any extension of time granted by the Collector for the filing of returns.
At the time of making the final return, if the full amount of the tax due by the taxpayer for the tax year has not been paid, the taxpayer shall pay the remaining balance of the tax which, shall be the difference between the amount of the tax paid at the time of making the estimated return on the estimated gross receipts and the amount of tax shown to be finally due on the actual gross receipts for the tax year.
The Collector is not authorized to grant extensions of time in which to make payment of tax or estimated tax due as provided herein or to waive or abate the interest due thereon.
It shall be the duty of the Collector to collect and receive the taxes, interest, penalties and costs imposed hereunder. It shall also be the duty of the Collector to keep appropriate tax records for each tax year, showing the name and address of taxpayers, the amount of the tax reported to be due, the amount received and the date of payment(s).
If no return is filed or if the Collector is not satisfied with the return and payment of the tax required under the provisions of this article, the Collector is hereby authorized and empowered to prepare and send by certified or registered mail a notice of proposed deficiency to the taxpayer's last known address, based upon the facts contained in the return or upon such information and belief as is available to the Collector. For this purpose, the Collector or the Deputy or authorized agent of the Collector is authorized to request, examine and obtain from any person legible copies of the books, papers, records and federal and state income tax returns of such person reasonably necessary to verify the accuracy of any return required to be made under the provisions hereof. The taxpayer shall have 30 days from the date of such notice of proposed deficiency in which to answer the Collector's notice of proposed deficiency.
Upon receipt of the taxpayer's answer, or if any person shall neglect, fail or refuse to answer the Collector's notice of proposed deficiency, then the Collector may prepare such returns and assess and levy the tax, interest and penalty due as provided herein. The Collector shall then submit such return to the taxpayer at his last known address for signature, which may then be received by the Collector as the return of such person, and an assessment may be entered on the basis of such return.
If any person fails to sign any return prepared by the Collector or fails to complete and sign any return required by law hereunder at the time prescribed therefor or makes, willfully or otherwise, a false, incorrect or fraudulent return, the Collector shall make such return from the knowledge and information available to him, and, when subscribed by the Collector on behalf of the taxpayer, the amount of tax due may be entered on the assessment roll or other appropriate document and may thereafter be collected as provided herein.
Any returns so submitted and subscribed as provided herein shall be prima facie good and sufficient for all legal purposes, and the taxpayer shall have the burden of proof in any legal proceeding to rebut by clear and convincing evidence the Collector's assessment.
If the final return of the taxpayer shows an overpayment of the tax by reason of the fact that the gross receipts as stated in the estimated computation were more than the actual gross receipts of the taxpayer for the year or by reason of the fact that the taxpayer did not continue to engage in business throughout the year, the Collector shall petition the Township for a refund to the taxpayer the amount of such overpayment, which shall be the difference between the amount of tax, interest and penalties paid upon the filing of the first return and the amount of the tax, interest and penalties finally shown to be due.
Any information contained on the returns of a taxpayer and any information obtained as a result of the estimation of the books and records of the taxpayer shall be confidential except for official purposes and except for purposes of pursuing the judicial remedies available to the Collector. The information on the license application shall be a public record.
The Collector may enter into such agreements, compacts or covenants with any other authorities of other political subdivisions of the Commonwealth of Pennsylvania or with the Secretary of the Treasury of the United States for access to tax returns of persons considered by the Collector to be engaged in a business, trade, occupation or profession within the limits of the Township.
The burden of proof shall be on any person claiming not to be engaged in carrying on a business, trade, occupation or profession within the limits of the Township or claiming any exemption from the provisions of this article or denying liability for the tax imposed hereunder unless such person demonstrates by clear and convincing evidence not to be liable for the tax assessed by the Collector pursuant to the provisions of the preceding § 270-42 herein.
All persons, whether or not having an office in the Township but engaged in carrying on any business, trade, occupation or profession within the limits of the Township, shall keep adequate written records of the transaction involved to support any claim that the situs of the transaction is not allocable to the limits of the Township. Absent such records, the taxpayer shall be deemed not to have competent and adequate records to support an exclusion from taxation hereunder.
Every person subject to or considered by the Collector to be subject to the tax imposed by this article shall make his books, papers, records and federal income tax returns or copies thereof available to the Collector at any reasonable time and place requested in writing by the Collector or his Deputy or authorized agent, in order to enable such Collector or his Deputy or authorized agent to make examination thereof as may be necessary to verify the accuracy of any return or payment made of the tax required by this article and/or the applicability of this article to the taxpayer's gross profits. However, written request or demand of any records of a taxpayer shall not be deemed a condition precedent for commencement of any judicial proceeding by the Collector against a taxpayer.
It shall be the responsibility of all officers of any corporation subject to the taxes imposed herein to ensure that said corporation file the tax returns required by this article, and failure to do so shall subject each officer to a joint and several liability equal to these imposed by §§ 270-44 and 270-48 hereof and a civil fine of $600.
In addition to all other remedies provided by law, the Collector shall have the power to collect unpaid taxes due under this article from any persons owing such taxes by commencing a civil action after the assessment procedure provided in § 270-42. To each civil complaint requested for such taxes, interest and penalty, there shall be added a civil penalty of 10% of the tax or $600, whichever is more, together with costs of the suit and reasonable attorney's fees incurred by the Township, as provided in the Local Tax Collection Act, Act of May 25, 1945, P.L. 1050, § 21, 72 P.S. § 5511.21 et seq.
All taxes, interest, penalties and civil penalties, costs of suit and reasonable attorney's fees received, collected or recovered by the Collector under the provisions hereof shall be paid into the treasury of the Township.
Nothing contained in this article shall be construed to empower the Township to assess, 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 Township under the Constitution of the United States and the Constitution and Laws of the Commonwealth of Pennsylvania.
The Collector is hereby authorized to make rules and regulations consistent with the provisions of this article relating to the interpretation or application of any taxing section thereof or with respect to any matter affecting the administration and enforcement of this article, including provision for the examination, correction of returns and the adjustment or refund of any overpayment of tax within the time provided by law.
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 as to any other part of 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.
[Amended 11-21-1995 by Ord. No. 1846-95]
Any person, as defined in this article, or any officer, agent, servant or employee thereof, or other legal entity who shall fail, neglect or refuse to comply with any of the terms or provisions of this article shall, upon a finding thereof before a District Justice, be required to pay a civil fine of not more than $600, together with costs of suit for each offense, to be collected as other fines and costs are collectible by law.
This Article has been enacted under the authority of the Local Tax Enabling Act of the General Assembly of the Commonwealth of Pennsylvania, approved December 31, 1965, P.L. 1257, as amended, 53 P.S. § 6901 et seq.