(A) The local services tax shall be no more than $52 on each person for each calendar year, irrespective of the number of political subdivisions within which a person may be employed.
(B) The law requires municipalities and school districts who levy the local services tax at a combined rate exceeding $10 to exempt any person from the local services tax whose total earned income and net profits from all sources within the political subdivision is less than $12,000 for the calendar year in which the local services tax is levied.
(C) Each political subdivision levying the local services tax shall exempt the following persons from the local services tax:
(1) Any person who 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 100% permanent disability; and
(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. A 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.
(D) A person seeking to claim an exemption from the local services tax may annually file an exemption certificate with the collector of the tax for the township and file a copy of the certificate with the person’s employer affirming that the person reasonably expects to receive earned income and net profits from all sources within the political subdivision of less than $12,000 in the calendar year for which the exemption certificate is filed.
(E) The exemption certificate shall have attached to it a copy of all of the employee’s last pay stubs or W-2 forms from employment within the political subdivision for the year prior to the fiscal year for which the employee is requesting to be exempted from the local services tax.
(F) Upon receipt of the exemption certificate and until otherwise instructed by the collector of the tax for the township the employer shall not withhold the tax from the person during the calendar year or remainder of the calendar year for which the exemption certificate applies. With respect to a person who claimed an exemption from the local services tax, upon notification to an employer by the person or by the collector of the tax for the township, that the person has received earned income and net profits from all sources within the township equal to or in excess of $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 $12,000 in that calendar year, an employer shall withhold the Local Services Tax from the person as follows:
(1) If a person who claimed an exemption for a given calendar year from the local services tax becomes subject to the tax for the calendar year the employer shall withhold the tax for the remainder of that calendar year; and
(2) The employer shall withhold from the person, for the first payroll period after receipt of the notification under division (F)(1) above, a lump sum equal to the amount of the tax that was not withheld from the person due to the exemption certificate filed by the person, plus the per payroll amount due for that first payroll period.
(G) 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.
(H) In the event the employment of a person subject to withholding of the local services tax under this exception is severed in that calendar year, the person shall be liable for any outstanding balance of tax due and the political subdivision levying the tax may pursue collection under this Act.
(I) Employers shall not be responsible for investigating exemption certificates, monitoring tax exemption eligibility or exempting any employee from a local services tax.
(J) (1) Employers shall be responsible for retaining a copy of all exemption certificates filed by employees within a given calendar year for a minimum of three years.
(2) Employers who have failed to withhold the local services tax from an employee or employees, and do not have copies of the employee exemption certificate or certificates, will be held responsible for the payment of the local services tax as if the tax had been originally levied against the employer.
(Ord. 2-2014, passed 6-3-2014)