As used in this article, the following terms
shall have the meanings indicated:
ASSOCIATION
A partnership, limited partnership, or any other unincorporated
group of two or more persons.
BOARD
The Board of Supervisors of the Township of Girard.
BUSINESS
Any 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.
CORPORATION
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.
DOMICILE
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 voluntarily 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.
EARNED INCOME
Compensation, including salaries, wages, commissions, bonuses
and incentive payments, whether based on profits or otherwise, fees,
tips and similar remuneration for services rendered, whether in cash
or in property, such as:
A.
Items of remuneration received, directly or
through an agent, in cash or in property, based on payroll periods
or piecework, for services rendered as an employee or casual employee,
agent or officer of an individual, partnership, business or nonprofit
corporation, or government agency. These items include salaries, wages,
commissions, bonuses, stock options, incentive payments, fees, tips,
dismissal, termination or severance payments, early retirement incentive
payments and other additional compensation contingent upon retirement,
including payments in excess of the scheduled or customary salaries
provided for those who are not terminating service, rewards, vacation
and holiday pay, paid leaves of absence, payments for unused vacation
or sick leave, tax assumed by the employer, signing bonuses, amounts
received under employee benefit plans and deferred compensation arrangements.
B.
Scholarships, stipends, grants and fellowships,
if services are rendered in connection therewith.
(1)
When used in this definition, the following
words have the following meanings, unless the context clearly indicates
otherwise:
(b)
GRANT-IN-AIDFinancial support given by a public agency or private institution to an individual to further the individual's education.
C.
Other forms of remuneration characterized as
taxable compensation by the Tax Reform Code of 1971, as amended, and its implementing regulations, as amended, and any
future amendments to said code and/or its implementing regulations.
D.
Compensation does not include:
(1)
Periodic payments for sickness and disability other than the
regular wages received during a period of sickness or disability;
or
(2)
Disability, retirement or other payments arising under workmen's
compensation acts, occupational disease acts and similar legislation
by any government; or
(3)
Payments commonly recognized as old age or retirement benefits
paid to persons retired after reaching a specific age or after a stated
period of employment; or
(4)
Payments commonly known as "public assistance" or unemployment
compensation payments by any governmental agency; or
(5)
Payments to reimburse actual expenses; or
(6)
Payments made by employers or labor unions for employee benefit
programs covering hospitalization, sickness, disability or death,
supplemental employment benefits or strike benefits, subject to certain
conditions identified in the Tax Reform Code of 1971, as amended,
and its implementing regulations; or
(7)
Any compensation received by United States servicemen serving
in a combat zone; or
(8)
Payments received by a foster parent for in-home care of foster
children from an agency of the commonwealth or a political subdivision
thereof, or an organization tax exempt from federal tax under Section
501(c)(3) of the Internal Revenue Code of 1954, which is licensed
by the commonwealth or a political subdivision thereof as a placement
agency; or
(9)
Payments made by employers or labor unions for employee benefit
programs covering social security or retirement; or
(10)
Personal use of an employer's owned or leased property or of
employer-provided services.
INCOME TAX OFFICER or OFFICER
Person, public employee or private agency designated by governing
body to collect and administer the tax on earned income and net profits.
EMPLOYER
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.
NET PROFITS
A.
The net income from the operation of a business,
profession, or other activity, except corporations, after provision
for all costs and expenses incurred in the conduct thereof, be determined
either on a cash or accrual basis in accordance with generally accepted
accounting principles and practices, as defined in the Tax Reform
Code of 1971, as amended, its implementing regulations, and any subsequent amendments
to said code and/or regulations. Net profits do not include income
which is not paid for services provided and which is in the nature
of earnings from an investment.
B.
To constitute net profits, all of the following
must apply:
(1)
The gross profits shall be derived from one
of the following:
(a)
The marketing of a product or service to customers
on a commercial basis or from securities employed as working capital
in the business operations.
(b)
Accounts and notes receivable from sales of
products or services in the ordinary course of the business operations.
(c)
Assets which serve an operational function in
the ordinary course of business operations.
(2)
The marketing activity shall be conducted with
the manifest objective of achieving profitable operations.
(3)
The marketing objective shall be conducted with
regularity and continuity and may not be limited or exclusive.
C.
In computing net profits, a deduction will not
be allowed for any item of cost, expense or liability derived or incurred
in connection with, or attributable to any of the following:
(1)
The ownership or disposition of assets that
are held for investment purposes or otherwise serve an investment
function.
(2)
The trading in securities for personal purposes
and not for the accounts of customers.
(3)
The sale, discontinuation or abandonment of
a business or segment thereof.
(4)
Any tax imposed on, or measured by, gross or
net earned or unearned income.
(5)
An isolated or nonrecurring transaction which
is not a normal or routine business activity.
D.
Choosing to form a partnership or other entity
or to associate with others, receiving and reporting income or gain
as the income of the partnership, entity or associates or dividing
the same among its partners, beneficial owners or associates or the
trading in securities for the benefit of shareholders, partners, members
or associates does not of itself make the income of the partnership,
entity or associates net profits.
E.
For purposes of this definition, only the following
participants in the stock, securities, options, derivatives, futures
or commodities market are engaged in marketing of a product or service
to customers:
(1)
Those who maintain or provide a market place
or facilities for bringing together purchasers and sellers of these
financial investment products.
(2)
Those who are licensed to act as their customer's
agents and charge a negotiated commission for executing transactions
and do not take title to the particular portion they buy or sell.
(3)
Those who devote managerial attention to the
financial investment products holdings of others, or who employ other
persons to assist them in that management, in the capacity of a licensed
investment advisor.
(4)
Licensed dealers, including financial investment product specialists and market makers, if the conditions in Subsection
E(4)(a) through
(d) are met:
(a)
The dealer maintains an inventory of financial
investment products with the objective of reselling his inventories
at a profit to customers or operates as a specialist or market maker.
(b)
The dealer makes market by quoting the bid and
ask prices at which he is willing to buy and sell the financial investment
products and by buying directly from or selling directly to customers.
(c)
The dealer's profit is determined in whole or
in part by a markup based on cost.
(d)
The dealer elects to inventory securities held
for resale to customers or uses the mark-to-market system of accounting.
(5)
Underwriters who facilitate initial sales of
financial investment products by acting either as licensed dealers
in a principal capacity or as brokers in an agency capacity.
F.
When a person operates as an investor or trader
with respect to a portion of that person's activities and as a market
establishment, broker, investment counselor or dealer with respect
to the rest, this definition applies only to the operations as a market
establishment, broker, investment counselor or dealer.
G.
For taxpayers engaged in the business, profession
or activity of farming, the term shall not include:
(1)
Any interest earnings generated from any monetary
accounts or investment instruments of the farming business;
(2)
Any gain on the sale of farm machinery;
(3)
Any gain on the sale of livestock held 12 months
or more for draft, breeding or dairy purposes; and
(4)
Any gain on the sale of other capital assets
of the farm.
NONRESIDENT
A person, partnership, association or other entity domiciled
outside the taxing district.
RESIDENT
A person, partnership, association or other entity domiciled
in the taxing district.
TAXPAYER
A 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.
Persons whose total income from all sources is less than $12,000
per annum are hereby exempted from this tax.
This article is adopted pursuant to the authority
conferred by the Act of December 31, 1965, P.L. 1257; 53 P.S. § 6901,
as amended.
It is hereby declared to be the intent of the
Board that this article replace in its entirety all prior ordinances
adopted by, motions approved, or other actions taken by, the Board
of Supervisors of Girard Township levying an earned income tax, and/or
in any manner affecting the specific terms or provisions of said earned
income tax as levied, the provisions of which shall remain in full
force and effect for each year thereafter, without annual reenactment
unless the rate of tax is subsequently changed.