EMPLOYER REPORTING
INSTRUCTIONS FOR NEWVILLE BOROUGH’S, SOUTH NEWTON TOWNSHIP’S,
& BIG SPRING SCHOOL DISTRICT’S
EMERGENCY AND MUNICIPAL
SERVICES TAX (EMST)
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DIRECT PAYMENTS TO: CAPITAL TAX COLLECTION
BUREAU CARLISLE DIVISION PO BOX 400 CARLISLE PA 17013-0400 |
DIRECT NON-PAYMENTS TO:
CAPITAL TAX COLLECTION BUREAUCARLISLE DIVISION 19 S
HANOVER ST STE 102
CARLISLE PA 17013-3336 |
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PHONE (717) 243-3725 FAX (717) 243-9224 |
WEBSITE
– WWW.CAPTAX.COM E-MAIL
– CAPTAX@CAPTAX.COM |
VERY IMPORTANT – South Newton
Township increased their EMST to $30.00 for 2006 (municipal and school rate
combined). This mailing contains EMST
information and forms for both the 2006 and 2005 tax years. The EMST-4 Forms enclosed are for the 2006
tax year. The EMST-5 and ND-1 Forms
enclosed are for the 2005 tax year.
These instructions contain information for both the 2006 and 2005 tax
years.
The Emergency and Municipal Services Tax (EMST) replaced the Occupational Privilege Tax (OPT) in the 2005 tax year. Like the OPT, the new tax is assessed by political subdivisions on individuals with occupations within their jurisdiction. For the 2005 and later tax years, wherever you see the words or acronym of “Occupational Privilege Tax” or “OPT” used, they are synonymous with “Emergency and Municipal Services Tax,” or “EMST”.
SECTION 2.
TYPE AND AMOUNT OF TAX
The EMST for Newville Borough/Big Spring S. D. combined is an annual, flat $10.00 tax; South Newton
Township/Big Spring S. D. combined is an annual, flat $30.00 tax
and Big Spring S. D. is an annual, flat $10.00 tax levied on
individuals with an occupation within any of the named municipalities and/or
school district.
SECTION 3.
DUTY OF EMPLOYERS
(A) AUTHORITY &
REQUIREMENT TO WITHHOLD THE EMST - Each employer within any of these taxing
jurisdictions, as well as those employers situated outside these taxing
jurisdictions but who engage in business within any of the taxing
jurisdictions, is hereby charged with the duty of collecting from each of his
employees engaged by him and performing for him within the such taxing
jurisdiction the EMS tax and making a return and payment thereof to the Tax
Collector (Capital Tax Collection
Bureau). Further, each employer is
hereby authorized to deduct this tax from each employee performing services in
these taxing jurisdictions whether such employee is paid by salary, wage, or
commission. However, the Supreme Court of Pa. found that the occupation of clergy
is exempt from the EMST. Therefore,
religious organizations should not withhold the EMST from clergy employees.
(B) WHICH EMPLOYEES SHOULD HAVE THE TAX WITHHELD - A person is subject to
the EMST at his/her “place of employment,” which means the actual location
where the individual works. Therefore,
the headquarters of the employer, and/or where the payroll checks are prepared,
do not determine what EMST is due unless the employee actually works at those
locations.
(C) EMPLOYEES WITH MULTIPLE
WORK LOCATIONS
– Where, for a single employer, an employee works at multiple work
locations located in different taxing jurisdictions, such employee is subject
to the EMST levied by the taxing jurisdiction of his “principle” work location. Common sense fact and circumstances should
be used to determine the principle work location, such as time spent in each
taxing jurisdiction and where the employee’s primary duties are performed. These factors should be grouped by each
taxing jurisdiction where work is performed.
For example, a mail carrier would be subject to the tax where the
majority of his regular route is located – not necessarily the taxing
jurisdiction where he picks up his mail in the morning. Likewise a temporary assignment of a short
duration in a certain taxing jurisdiction would not subject that employee to
that jurisdiction’s EMST if the employee clearly had a principle work location
in another jurisdiction. An employee
can have only one principle work location at a single time, but an employee can
have multiple principle work locations during a calendar year. In a case where an employee changes
principle work locations during a calendar year, the proper EMST amount must be
withheld for each taxing jurisdiction, up to a combined maximum of $52 in any
one calendar year.
(D) AMOUNT AND TIMING OF
WITHHOLDINGS FROM SUBJECT EMPLOYEES – The employer is required to withhold the taxing
jurisdiction’s entire amount of EMST from subject employees, with the only
exceptions listed below in subsections (E) & (F). Failure to do so makes the employer liable for the tax as if it
had been levied against the employer.
Because of this possibility for employer liability, it is prudent for
the employer to withhold the entire amount of the tax levy as soon as possible
in each calendar year.
(E) OPTIONAL MINIMUM 10% WITHHOLDING REQUIREMENT - Current EMST enabling
legislation only permits taxing jurisdictions to require a “one-time”
withholding of the tax. However,
acknowledging that employees may be part-time, and/or that they may be hired
near the end of a calendar quarter, an optional minimum withholding
schedule has been established, that if followed, will relieve an employer of
any liabilities for under-withholding the EMST. Where the entire EMST tax liability is not withheld, but an
employer withholds EMST equal to at least of 10% of an employee’s gross wages,
the employer will be considered as having met the withholding
requirements. However, if you are
issuing a final paycheck to a departing employee, you must deduct as much of
the employee’s remaining EMST liability as possible, even if such deduction
would result in netting the paycheck to $0.00.
Note that this does not relieve the employee from the liability of any
remaining balance due. Employers who
make no deduction or deduct less than 10% of an employee’s gross pay (when pay
is insufficient) are responsible for the difference between what was deducted
and the employee’s full EMST liability.
(F) EMPLOYEES WITH MULTIPLE EMPLOYERS/OCCUPATIONS – In cases where an
employee is subject to more than one EMST in a tax year due to having more than
one occupation (employer or self-employment), all EMST taxes should be
withheld/paid if the total of all EMST’s does not exceed $52. If the withholding of any subsequent full
EMST amount would exceed $52 when added to prior EMST payments, a withholding
adjustment of one of the EMST’s of the taxing jurisdictions named herein may be
necessary. Any adjustment is based on 2
factors: 1) the employee must provide proof of deduction/payment
of the EMST claimed to have been previously paid (see the last paragraph in
this subsection (F) for more information); and 2) which taxing jurisdiction has
“priority” to the EMST. Per law, the
priority of claim to collect an EMST is based on the following 4 factors with
such priority going from highest (1), to lowest (4):
1. The employer where the individual first became employed in the calendar year. For the purposes of this rule, if the individual was employed with each employer on January 1 of the tax year, or initially employed on the same day at both employers, this would be a tie, so it proceeds to factor no. 2.
2. The political subdivision in which a person maintains his principal office or is principally employed. A person’s principle employment would be the one in which he earns the most.
3. The political subdivision in which a person resides & works, if such a tax is levied by that political subdivision.
4. The political subdivision in which a person is employed and which imposes the tax nearest in miles to the person’s home.
Only previously paid EMST having priority over the herein named taxing jurisdictions’ levy should be used to reduce such EMST. For example, assuming an employee provided an employer with a receipt of $52 showing a same year EMST tax paid previously, if the taxing jurisdiction of the receipt does not have priority over the EMST of the herein named taxing jurisdiction, then the herein named taxing jurisdiction’s full amount of EMST should be withheld. To receive a refund of the EMST overpayment, the employee should contact the taxing jurisdiction to which it had the $52 withheld and paid. Where the claim priority of a receipt is undeterminable, it is assumed the receipt has priority claim over any “yet to be paid” EMST levy.
An employee must provide proof of a previously paid EMST for it to be even considered as an offset to withholding of another EMST. Such proof may consist of a receipted tax bill paying the tax directly to the tax collector, a “Certificate of Deduction” showing a tax withheld by another employer, or a pay stub showing an EMST has been withheld providing it shows the tax year and taxing jurisdiction, along with the amount withheld. Where an employer is offsetting an EMST due to proof of a previously paid EMST, the employer should make a copy of such proof and retain it with his payroll records for possible verification by the tax collector.
(G) DATES FOR DETERMINING TAX LIABILITY AND
TRANSMITTAL OF WITHHELD EMST - Each employer shall use his
employment records for each calendar quarter to determine the number of
employees from whom said tax shall be deducted and paid to the Tax Collector
per the following schedule:
QUARTER TRANSMITTAL
DUE
1ST (January 1 thru March 31) April 30 of the current year
2ND
(April 1 thru June 30) July 31 of the current year
3RD
(July 1 thru September 30) October 31 of the current year
4TH
(October 1 thru December 31) January
31 of the following year
(H) EFFECT OF LOW INCOME EXPEMPTION TO EMPLOYERS REQUIREMENT TO
WITHHOLD THE EMST – The Big Spring School District’s EMST ordinance provides that a
taxpayer may be exempted from the EMST if he/she derives, in the aggregate,
less than $1,000 per occupation within the corporate limits of the Big Spring
School District. The South Newton
Township EMST Ordinance applies to only those whose total annual income from
all sources is greater than $12,000 per calendar year. Newville Borough has no exemption for their
EMS tax. Since these exemptions are
based on information impossible to be known by the employer or employee at the
time the tax is required to be deducted, it never alleviates the
employer from the withholding requirement. If your employee eventually meets
this requirement, they must apply for a refund and provide appropriate earnings
information to the tax collector after the close of the tax year.
(I) EMPLOYER WITHHOLDING
& TRANSMITTAL COMMISSION – An employer, except in Newville Borough, may
retain 1% (.01) of the taxes withheld from their employees as a collection fee,
providing the tax is transmitted when due
Newville Borough employers may retain ½% (.005) of the taxes withheld
from their employees as a collection free, providing the tax is transmitted
when due.
SECTION 4.
FORMS, REPORTINGS & RETURNS
Each employer shall prepare and file
(where required) the following returns (to be supplied by Capital Tax
Collection Bureau).
(A) FORM EMST-2, EVIDENCE OF DEDUCTION (Not contained in this mailing) This form
MUST be completed by an employer for
ONLY those employees who have more than one occupation during the calendar year
and request a "Certificate of
Deduction". In all other cases the
employer has an OPTION of either completing this form or preparing their own
"Certificate of Deduction" for the employee. An employee's pay stub can qualify as the
"Certificate of Deduction" if it clearly shows the amount and a
description of the deduction. As a minimum, an employer's substitute "Certificate of Deduction" must
contain the year and type of the tax, the municipality which is levying the
tax, and the amount deducted (e.g., 2006 EMST, Big Spring S. D. $10.00). An employer must continue to maintain a
record of employees that have had the EMST tax withheld. However a reporting of
individual employees that have had the EMST tax withheld need not be filed with
the Capital Tax Collection Bureau. Where
EMST 2 forms are issued, Copy "A" should be retained by the employer
for his records, and Copy "B" should be given to the employee for
whom the deduction was taken. If you
need a supply of EMST 2 forms contact the EMST Department at Capital Tax
Collection Bureau.
(B) FORM EMST-4, WITHHOLDING TRANSMITTAL - This return is an
employer's summary of tax withheld from his employees for a calendar
quarter. Instructions for filing FORM
EMST 4 are listed on the reverse side of this form. Since the 2005 tax year forms were ordered prior to the EMST
being adopted into law, the calculation on line 2 will not always hold
true. Partial deductions of the tax
are possible either from the “10% Rule” (see Section 3., (E) herein) and/or
offsets against the herein named taxing jurisdictions’ EMST based on previously
paid/deducted, EMST (see Section 3., (F) herein). If this is the case, enter the total of the tax withheld in line
2 and write the word “PARTIAL” boldly over the instructions for this line.
(C) FORM ND-1,
NON-DEDUCTION - An employee subject to
Harrisburg’s EMST who does not have any, or a portion, of the $52.00 tax
withheld by his employer must be listed on this report. The 2005 ND-1(a) & (b) forms are
included in this mailing. They are on a
single sheet of paper with the one side being the ND-1(a) form and the reverse
side being the ND-1(b) form. The
reverse side of the EMST-5 form contains instructions for the both the ND-1 (a)
& (b) forms. Your 2006 tax
year ND-1 forms will be mailed out in late 2006 or early 2007 with your 2007
tax year EMST-4 forms. The 2005 ND-1
form, if applicable, must be filed along with the 2005 annual employer
reconciliation form EMST-5 by March 15, 2006.
(D) FORM EMST-5 – This
is a new form and procedure for tax year 2005.
The 2005 EMST-5 Form (an 8.5 by 11 inch sheet of paper) is included in
this mailing. This EMST-5 form
reconciles the annual total of EMST paid, adjusted by any ND-1 report
totals and any employer commission taken; to the number of same tax year W-2’s
submitted to our Bureau for EIT purposes, multiplied by the appropriate EMST
tax rate. This form must be filed by
March 15 following the tax year.
SECTION 5.
INTEREST AND PENALTIES—OVERDUE TAX
If for any reason this tax is not paid when due, interest at the rate of six per cent (6%) per annum on the amount of said tax shall be due, beginning with the due date of said tax, and a penalty for non-payment thereof, of 5% (.05) shall be added to the flat rate of said tax in addition to any interest. Where suit is brought for the recovery of this tax, the individual liable therefore shall, in addition, be responsible and liable for the costs of collection.
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DISCLOSURE STATEMENT: You are entitled to receive a written
explanation of your rights with regard to the audit, appeal, enforcement,
refund and collection of local taxes by calling Capital Tax Collection
Bureau’s Harrisburg Division at (717) 234-3217 during the hours of 8 a.m. – 4
p.m., Monday through Thursday and 8:30 a.m. – 4 p.m., Friday. |