Local Services Tax

Levy of tax

For specific revenue purposes, an annual tax is hereby levied and assessed, commencing January 1, 2008, upon the privilege of engaging in an occupation with a primary place of employment within the Township during the tax year. Each natural person who exercises such privilege for any length of time during any tax year shall pay the tax for that year in the aggregate amount of $52.00 assessed on a pro rata basis, in accordance with the provisions of this article. This tax may be used solely for the following purposes as the same may be allocated by the Board of Commissioners from time to time: (1) emergency services, which shall include emergency medical services, police services and/or fire services; (2) road construction and/or maintenance; (3) reduction of property taxes; or (4) property tax relief through implementation of a homestead and farmstead exclusion in accordance with 53 Pa.C.S. Ch. 85, Subch. F (relating to homestead property exclusion).  The Township shall use no less than twenty-five percent of the funds derived from the tax for emergency services. This tax is in addition to all other taxes of any kind or nature heretofore levied by the Township. The tax shall be no more than $52.00 on each person for each calendar year, irrespective of the number of political subdivisions within which a person maybe employed.

Exemption and refunds

A.         Exemption. Any person whose total earned income and net profits from all sources within the Township is less than twelve thousand ($12,000) dollars for any calendar year in which the tax is levied is exempt from the payment of the tax for that calendar year. In addition, the following persons are exempt from payment of the tax:
(1)        Any person who has served in any war or armed conflict in which the United States was engaged and is honorably discharged or released under honorable circumstances from active service if, as a result of military service, the person is blind, paraplegic or a double or quadruple amputee or has a service-connected disability declared by the United States Veterans’ Administration or its successor to be a total one hundred percent disability.
(2)        Any person who serves as a member of a reserve component of the armed forces and is called to active duty at any time during the taxable year. For the purposes of this subparagraph, reserve component of the armed forces’ shall mean the United States Army Reserve, United States Navy Reserve, United States Marine Corps Reserve, United States Coast Guard Reserve, United States Air Force Reserve, the Pennsylvania Army National Guard or the Pennsylvania Air National Guard.
B.         Procedure to Claim Exemption.
(1)        A person seeking to claim an exemption from the local services tax may annually file an exemption certificate with the Township and with the person’s employer affirming that the person reasonably expects to receive earned income and net profits from all sources within the Township of less than twelve thousand dollars ($12,000) in the calendar year for which the exemption certificate is filed. In the event the Township utilizes a tax collection officer, it shall provide a copy of the exemption certificate to that officer. The exemption certificate shall have attached to it a copy of all the employee’s last pay stubs or W-2 forms from employment within the Township for the year prior to the fiscal year for which the employee is requesting to be exempted from the tax. Upon receipt of the exemption certificate an until otherwise instructed by the Township or except as required by clause B(2) hereof, the employer shall not withhold the tax from the person during the calendar year or the remainder of the calendar year for which the exemption certificate applies. Employers shall ensure that the exemption certificate forms are readily available to employees at all times and shall furnish each new employee with a form at the time of hiring. The exemption certificate form shall be the uniform form provided by the Township.
(2)        With respect to a person who claimed an exemption for a given calendar year from the tax, upon notification to an employer by the person or by the Township that the person has received earned income and net profits from all sources within the Township equal to or in excess of twelve thousand dollars ($12,000) in that calendar year or that the person is otherwise ineligible for the tax exemption for that calendar year, or upon an employer’s payment to the person of earned income within the Township in an amount equal to or in excess of twelve thousand dollars ($12,000) in that calendar year, an employer shall withhold the local services tax from the person under clause B(3) hereof.
(3)        If a person who claimed an exemption for a given calendar year from the tax becomes subject to the tax for the calendar year under clause B(2), the employer shall withhold the tax for the remainder of that calendar year. The employer shall withhold from the person, for the first payroll period after receipt of the notification under clause B(2), a lump sum equal to the amount of tax that was not withheld from the person due to the exemption claimed by the person under this subsection, plus the per payroll amount due for that first payroll period.  The amount of tax withheld per payroll period for the remaining payroll periods in that calendar year shall be the same amount withheld for other employees.  In the event the employment of a person subject to withholding of the tax under this clause is subsequently severed in that calendar year, the person shall be liable for any outstanding balance of tax due, and the Township may pursue collection under this article.
(4)        Except as provided in clause B(2), it is the intent of this subsection that employers shall not be responsible for investigating exemption certificates, monitoring tax exemption eligibility or exempting any employee from the local services tax.
C.         Refunds. The Board of Commissioners, in consultation with the Collector and DCED, shall establish procedures for the processing of refund claims for any tax paid by any person who is eligible for exemption, which procedures shall be in accord with provisions of the general municipal law relating to refunds of overpayments and interest on overpayments.  Refunds made within seventy-five days of a refund request or seventy-five days after the last day the employer is required to remit the tax for the last quarter of the calendar year, whichever is later, shall not be subject to interest.  No refunds shall be made for amounts overpaid in a calendar year that do not exceed one dollar ($1). The Board of Commissioners or the Collector shall determine eligibility for exemption and provide refunds to exempt persons.

Duty of employers to collect.

A.         Each employer within the Township, as well as those employers situated outside the Township but who engage in business within the Township, is hereby charged with the duty of collecting the tax from each of his employees engaged by him or performing for him within the Township and making a return and payment thereof to the Collector.  Further, each employer is hereby authorized to deduct this tax for each employee in his or her employ, whether said employee is paid by salary, wage or commission and whether or not all such services are performed within the Township.
B.         A person subject to the tax shall be assessed by the employer a pro rata share of the tax for each pay period in which the person is engaging in an occupation.  The pro rata share of the tax assessed on the person for a payroll period shall be determined by dividing the rate of the tax levied for the calendar year by the number of payroll periods established by the employer for the calendar year. For purposes of determining the pro rata share, an employer shall round down the amount of the tax collected each payroll period to the nearest one-hundredth of a dollar.  Collection of the tax shall be made on a payroll period basis for each payroll period in which the person is engaging in an occupation, except as provided in Paragraph D of this Section. For purposes of this paragraph, combined rate shall mean the aggregate annual rate of the tax levied by the school district and the municipality.
C.         No person shall be subject to the payment of the local services tax by more than one political subdivision during each payroll period.
D.         In the case of concurrent employment, an employer shall refrain from withholding the tax if the employee provides a recent pay statement from a principal employer that includes the name of the employer, the length of the payroll period and the amount of the tax withheld and a statement from the employee that the pay statement is from the employee’s principal employer and the employee will notify other employers of a change in principal place of employment within two weeks of its occurrence. The employee’s statement shall be provided on the form approved by DCED.
E.         The tax shall be no more than fifty-two dollars ($52) on each person for each calendar year, irrespective of the number of political subdivisions within which a person maybe employed. The Township shall provide a taxpayer a receipt of payment upon request by the taxpayer.
F.         No employer shall he held liable for failure to withhold the tax or for the payment of the withheld tax money to the Township if the failure to withhold taxes arises from incorrect information submitted by the employee as to the employee’s place or places of employment, the employee’s principal office or where the employee is principally employed.  Further, an employer shall not be liable for payment of the local services tax in an amount exceeding the amount withheld by the employer if the employer complies with the provisions of Paragraph B of Section 233-30 of this article and this section and remits the amount so withheld in accordance with this article.
G.         Employers shall be required to remit the local services taxes thirty days after the end of each quarter of a calendar year.

Local Services Tax Forms