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(A) Withholding by employer.
(1) Each employer within, or doing business within the municipality who employs one or more persons on a salary, wage, commission, or other compensation basis shall deduct when such salary, wage, commission or other compensation is paid, allocated, apportioned or set aside, the tax at the tax rate of 1.5% up to and including December 31, 2009, and 2% commencing January 1, 2010 and thereafter of the qualifying wages commissions, or other compensation due by said employer to each said employee and shall, beginning with the first quarter of 2002, make a return and pay to the Tax Administrator the amount of taxes so deducted according to the hereinafter set forth payment schedule. Said return shall be on a form or forms prescribed by or acceptable to the Tax Administrator and shall be subject to the rules and regulations prescribed therefore by the Tax Administrator. Nothing in this section prohibits an employer from withholding tax on a basis greater than qualifying wages.
(2) An employer is not required to make any withholding with respect to an individual’s disqualifying disposition of an incentive stock option if, at the time of the disqualifying disposition, the individual is not an employee of the corporation with respect to whose stock the option has been issued.
(3) (a) An employee is not relieved from liability for a tax by the failure of the employer to withhold the tax as required by a municipal corporation or by the employer’s exemption from the requirement to withhold the tax.
(b) The failure of an employer to remit to the municipal corporation the tax withheld relieves the employee from liability for that tax unless the employee colluded with the employer in connection with the failure to remit the tax withheld.
(4) Compensation deferred before the effective date of this amendment is not subject to any municipal corporation income tax or municipal income tax withholding requirement to the extent the deferred compensation does not constitute qualifying wages at the time the deferred compensation is paid or distributed.
(5) All employers shall make quarterly payments no later than the last day of the month following each calendar quarter. However, each employer shall be permitted to remit to the Tax Administrator the taxes he has withheld from his employees during the immediate preceding month.
(6) Payment of taxes withheld by an employer for the municipality during the measurement period, may be made monthly or quarterly on or before the last day of the month following the end of each month or quarter, subject to the approval of the Tax Administrator. The Tax Administrator may revoke the approval of monthly or quarterly filing and payments whenever the Tax Administrator has reason to believe that the conditions for granting such authorization have changed, were judged incorrectly, were not met, or when it is in the best interest of the municipality to do so. Notice of withdrawal shall be made in writing and, in such case; the employer must begin to file in accordance with this section.
(B) Employer considered as trustee. Each employer in collecting said tax shall be deemed to hold the same, until payment is made by such employer to the municipality, as a Trustee for the benefit of the municipality, and any such tax collected by such employer from his employees shall, until the same is paid to the municipality, be deemed a trust fund in the hands of such employer. Each employer shall be liable for the payment of the tax required to be deducted and withheld, whether or not such tax, in fact, has been withheld.
(C) Corporate officers personal liability. Any person who is required to withhold tax from qualifying wages shall pay all such tax to the municipality in accordance with the provisions of this section. In the event taxes withheld from the qualifying wages of employees are not paid to the municipality in accordance with the provisions of this section, all officers, members, managers, employees, and trustees having control or supervision of or charged with the responsibility of filing the return and making payment are jointly and severally personally liable for the tax not returned or paid to the municipality as well as any related interest and penalties, and are also liable under the provisions of § 95.12 hereof. The dissolution, termination, or bankruptcy of a corporation, limited liability company, or business trust does not discharge an officer’s, member’s, manager’s, employee’s, or trustee’s liability for a failure of the corporation, limited liability company, or business trust to file returns or pay said taxes.
(D) Withholding return; list of employees. Each employer shall file a withholding tax reconciliation (Form W-3) showing the sum total of all compensation paid all employees, the portion of which, (if any) was not subject to withholding along with an explanation for same, and the portion of which was subject to withholding, together with the amount of such withholdings remitted. Said return shall include information concerning each employee from whom the Cambridge tax was withheld, showing the name, address, zip code, and Social Security number of each employee, the total amount of compensation paid during the year and the amount of Cambridge tax withheld. If the total tax withheld from any employee included tax withheld and remitted to another municipality, the amount of same shall be separately shown on the return of information to Cambridge concerning each employee. The withholding tax reconciliation shall be filed by each employer on or before February 28 following the end of such calendar year.
(E) In addition to the wage reporting requirements of this section, any person required by the Internal Revenue Service to report on Form 1099-Misc. payments to individuals not treated, as employees for services performed shall also report such payments to the city when the services were performed in the city. The information may be submitted on a listing, and shall include the name, address and social security number (or federal identification number), and the amount of the payments made. Federal form(s) 1099 may be submitted in lieu of such listing. The information shall be filed annually on or before February 28 following the end of such calendar year.
(F) Domestic servant. Provided however, that no person shall be required to withhold the tax on the qualified wages, commissions, other compensation and other taxable income paid domestic servants employed exclusively in or about such person’s residence. However, such domestic servants shall be responsible for filing and paying their own returns and taxes.
(Ord. 1-05, passed 1-24-05; Am. Ord. 84-09, passed 12-14-09)