[Adopted 4-19-2004 by Ord. No. 3-2004]
This article is enacted under the authority
of the Local Tax Enabling Act, 53 P.S. § 6901 et seq.
This article shall be known and may be cited
as the “Borough of Mount Pocono Earned Income and Net Profits
Tax Ordinance.”
As used in this article, the following terms
shall have the meanings indicated:
A partnership, limited partnership or any other unincorporated
group of two or more persons.
An enterprise, activity, profession or any other undertaking
of an unincorporated nature conducted for profit or ordinarily conducted
for profit whether by a person, partnership, association or any other
entity.
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.
The calendar year for which the tax is levied.
The place where one lives and has his permanent home and
to which he has the intention of returning whenever he is absent.
Actual residence is not necessarily “domicile,” for “domicile”
is the fixed place of abode which, in the intention of the taxpayer,
is permanent rather than transitory. “Domicile” is the
voluntary fixed place of habitation of a person, not for a mere special
or limited purpose, but with the present intention of making a permanent
home, until some event occurs to induce him to adopt some other permanent
home. In the case of businesses or associations, the domicile is that
place considered as the center of business affairs and the place where
its functions are discharged.
Compensation as determined under Section 303 of the Act of
March 4, 1971 (P.L. 6, No. 2), known as the “Tax Reform Code
of 1971,”[1] and regulations in 61 Pa. Code, Part I, Subpart B, Article V (relating to personal income tax). Employee business expenses are allowable deductions as determined under Article III of the Tax Reform Code of 1971. The amount of any housing allowance provided to a member of the clergy shall not be taxable as earned income.
That person, public employee, private agency or other entity
designated by Borough Council to collect and administer the tax on
earned income and net profits. The elected (or appointed) Borough
Real Property Tax Collector shall be and shall serve as the Earned
Income and Net Profits Tax Officer of the Borough.
A person, partnership, association, corporation, institution,
governmental body or unit or agency or any other entity employing
one or more persons for a salary, wage, commission or other compensation.
The net income from the operation of a business, profession,
or other activity, except corporations, determined under Section 303
of the Act of March 4, 1971 (P.L. 6, No. 2), known as the “Tax
Reform Code of 1971,”[2] and regulations in 61 Pa. Code, Part I, Subpart B, Article
V (relating to personal income tax). The term does not include income
which is not paid for services provided and which is in the nature
of earnings from an investment.
A person, partnership, association or other entity domiciled
outside the Borough.
A natural person.
The calendar year before the current year.
A person, partnership, association or other entity domiciled
in the Borough.
The calendar year following the current year.
Person, partnership, association or any other entity required
hereunder to file a return of earned income or net profits or to pay
a tax thereon.
The following taxes are hereby imposed, for
general Borough purposes, under the authority of Act No. 511 of 1965,
the Local Tax Enabling Act:[1]
A.
One percent of all earned income earned during the
current year by residents.
B.
One percent of all earned income earned during the
current year by nonresidents for work done or services rendered in
the Borough of Mount Pocono.
C.
One percent of all net profits earned during the current
year by businesses, professions and other activities conducted by
residents.
D.
One percent of the net profits earned during the current
year by businesses, professions and other activities conducted in
the Borough of Mount Pocono by nonresidents.
[1]
Editor's Note: See 53 P.S. § 6924.101 et seq.
A.
Net profits.
(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.
(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.
(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.
(4)
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.
(5)
The Officer is hereby 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.
(6)
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.
B.
Earned income.
(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.
(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 earned 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.
A.
Every employer having an office, factory, workshop,
branch, warehouse or other place of business within the Borough 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 15 days after becoming an employer, register with the
Officer his name and address and such other information as the Officer
may require.
B.
Every employer having an office, factory, workshop,
branch warehouse or other place of business within the Borough 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 article 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 period 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 said 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.
C.
Any 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 Borough,
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.
D.
On or before February 28 of the succeeding year, every
employer shall file with the Officer:
(1)
An annual return showing the total amount of 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.
(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 and 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.
E.
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.
F.
Except as otherwise provided in Section 9 of Act 511
of 1965, every employer who willfully or negligently fails or omits
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.
G.
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.
A.
It shall be the duty of the Officer 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 or business paying the tax and the date of
such receipt.
B.
The Officer, before entering upon his official duties,
shall give and acknowledge a bond to the Borough in such amount and
with such surety as designated from time to time by Borough Council.
C.
The Officer 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,
including provisions for the reexamination 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 case of overpayment, for any period of time not to
exceed six years subsequent to the date of payment of the sum involved,
and to prescribe forms necessary for the administration of this article.
No rule or regulation of any kind shall be enforceable unless it has
been approved by resolution of Borough Council. A copy of such rules
and regulations currently in force shall be available for public inspection.
D.
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 taxpayer's employer.
E.
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.
F.
Any information gained by the Officer, his agents
or by any other official or agent of the Borough, as a result of any
declarations, returns, investigations, hearings or verifications required
or authorized by this article shall be confidential, except for official
purposes and except in accordance with a proper judicial order or
as otherwise provided by law.
G.
The Officer is authorized to establish different filing,
reporting and payment dates for taxpayers whose fiscal years do not
coincide with the calendar year.
H.
The Officer shall, at least quarterly, distribute
earned income taxes to the appropriate political subdivisions. The
political subdivisions shall not be required to request the Officer
to distribute the funds collected but shall at least annually reconcile
their receipts with the records of the Officer and return to or credit
the Officer with any overpayment. If the Officer, within one year
after receiving a tax payment, cannot identify the taxing jurisdiction
entitled to a tax payment, he shall make payment to the municipality
in which the tax was collected. Within 120 days of the passage of
this act, any present accumulated funds that are unclaimed shall be
distributed on the same basis.
The Officer shall receive such compensation
for his services and expenses as determined by Borough Council.
A.
The Officer may sue in the name of the Borough 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 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:
(1)
Where no declaration or return was filed by any person
although a declaration or return was required to be filed by him under
provisions of this article, there shall be no limitation.
(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.
(3)
In the case of substantial understatement of tax liability
of 25% or more and no fraud, suit shall be begun within six years.
C.
This section shall not be construed to limit Borough
Council from recovering delinquent taxes by any other means provided
by law.
D.
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.
A.
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 1/2 of 1% of the amount of the said 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.
B.
Notwithstanding the provisions of Subsection A, the governing body may, by ordinance or resolution, establish a one-time period during which interest or interest and penalties that would otherwise be imposed for the nonreporting or underreporting of earned income tax liabilities or for the nonpayment of earned income taxes previously imposed and due shall be waived in total or in part if the taxpayer voluntarily files delinquent returns and pays the taxes in full during the period so established. The governing body may adopt regulations to implement the provisions of this subsection.
C.
The provisions of Subsection B shall not affect or terminate any petitions, investigations, prosecutions or other proceedings pending under the provisions of this article or prevent the commencement or further prosecution of any proceedings by the proper authorities for violations of this article. No proceedings shall, however, be commenced on the basis of delinquent returns filed pursuant to Subsection B, if the returns are determined to be substantially true and correct and the taxes are paid in full within the prescribed time.
A.
Any person who fails, neglects or refuses to make
any declaration or return required by this article, 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 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 article shall, upon conviction thereof before any
District Justice 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 fine and costs, to be imprisoned for
a period not exceeding 30 days.
B.
Any person who divulges any information which is confidential
under the provisions of this article shall, upon conviction thereof
before any District Justice 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.
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 forms
required for making the declaration or returns required by this article
shall not excuse him from making such declaration or return.
This article shall not apply to any person or
property as to whom or which it is beyond the legal power of the Borough
to impose the tax or duties herein provided for.
