LOCAL SERVICES TAX
Effective January 1, 2008, the Commonwealth of Pennsylvania replaced the Emergency and Municipal Services Tax (EMST) with the Local Services Tax (LST). Like the EMST, the LST is assessed on each individual employed within CENTER TOWNSHIP. When the initial Occupation Privilege Tax (OPT) was authorized by the Commonwealth of Pennsylvania, CENTER TOWNSHIP did not levy the tax. At their regular meeting, the Board of Supervisors adopted Ordinance No. 2009-11-04 levying the Local Services Tax effective January 1, 2010.
The combined rate for CENTER TOWNSHIP and the BUTLER AREA SCHOOL DISTRICT is $52.00 annually. The BUTLER AREA SCHOOL DISTRICT will continue receiving $5.00. CENTER TOWNSHIP will receive the remaining $47.00, which twenty-five percent (25%) will be provided for emergency response services.
LOCAL SERVICES TAX EMPLOYER WITHHOLDING
A person subject to the CENTER TOWNSHIP Local Services Tax shall be assessed a pro rata share of the tax for each payroll 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 combined rate of the Local Services Tax levied for the calendar year by the number of payroll periods established by the employer 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 (1/100) of a dollar.
Employer collection of the Local Services Tax shall be made on a payroll period basis for each payroll period, beginning with the first payroll period in which the person is engaging in an occupation.
EMPLOYER REMITTANCE OF COLLECTED TAX AND REPORTING OF COLLECTION DETAIL
Employers are required to remit the Local Services Tax withheld from their employees and file a Local Services Tax Quarterly Return, to BUTLER AREA SCHOOL DISTRICT WAGE TAX OFFICE, thirty (30) days after the end of the quarter of a calendar year. The Local Services Tax Quarterly Return shall list the name, address, social security number, physical address of the place of employment, number of payroll periods for which the Local Services Tax was withheld, and the amount of the Local Services Tax being remitted for each employee.
EXEMPTIONS TO THE LOCAL SERVICES TAX
The Local Services 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 may be employed.
The law requires municipalities and school districts who levy the Local Services Tax at a rate exceeding $10.00 to exempt any person from the Local Services Tax whose total earned income and net profits from all sources within CENTER TOWNSHIP is less than $12,000 for the calendar year in which the Local Services Tax is levied.
An annual upfront exemption certificate must be completed by the employee and submitted to their employer and to the BUTLER AREA SCHOOL DISTRICT WAGE TAX OFFICE. Upon receipt of the exemption certificate 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 the exemption from the Local Services Tax, upon notification to an employer by the person that the person has received earned income and net profits from all sources equal to or in excess of $12,000 in that calendar year or upon an employer’s payment to the person of earned income 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:
The employer shall withhold from the person, for the first payroll period after receipt of notification under the above paragraph, 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.
CENTER TOWNSHIP shall exempt the following persons from the Local Services Tax:
1. Any person who is an honorably discharged veteran with one hundred percent (100%) service-connected disability.
2. Any person on active duty
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 (3) years. 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 responsible for the payment of the Local Services Tax as if the tax had been originally levies against the employer.