Changes required for the withholding and collection of the Local Services Tax for 2008 are summarized as follows:

NOTE: these changes were mandated by Act 7 of 2007.

1.                   Who is subject to tax?  All persons whose employment is located in the City of Meadville, whether employed by a business or person or whether self-employed.

2.                   How to collect the tax.  The tax, $52.00 for 2008, is to be withheld in proportional amounts based on the number of payroll periods in the calendar year.  That is - divide the $52.00 tax by the number of payroll periods in the year and withhold that amount for each payroll period.

Example:  if 52 payroll periods - withhold $1.00 each payroll period ($52.00 divided by 52 payroll periods)

Example:  if 26 payroll periods - withhold $2.00 each payroll period ($52.00 divided by 26 payroll periods)

Example:  if 12 payroll periods - withhold $4.33 each payroll period ($52.00 divided by 12 payroll periods)

3.                   How to pay the tax.  The taxes collected from each employee are payable to the City within 30 days after the end of each calendar quarter.

A “LST Quarterly Report” form for use is enclosed; please make copies of the original form to file each quarter.  Employers with 50 or more employees must file their quarterly returns electronically, i.e., as Excel files on floppy disks or via email to wagetax@zoominternet.net or contact the City of Meadville, Earned Income Tax Office for other filing options.

Self-employed persons must pay the full $52.00 by April 30th.

4.                   Multiple employers.  If more than one employer, tax is paid to City if:

A.                 Employee’s principal office is in City

B.                  Employee is principally employed in City

C.                  Employee works and resides in the City and principal place of employment is in a municipality that does not impose the tax.

D.                 Employee works and resides in the City and there is no place of “principal employment”.

5.                   Exemptions/Exceptions.  Employer shall not withhold and return tax to the City under the following circumstances:

NOTE: For exemptions, the employee must complete an Exemption Certificate attached - prepared by the Pennsylvania Department of Community and Economic Development.  The Exemption Certificate and Documentation is to be filed with the Employer and Tax Collector.

A.                 Employee files Exemption Certificate certifying that another employer is his/her “principal employer” together with:

i.                    A recent pay statement from employee’s “principal employer” that includes employer’s name, payroll period and amount of tax withheld; and

ii.                  A statement of employee that employee’s “pay statement is from employee’s principal employer and employee will notify other employers of a change in principal place of employment within 2 weeks of its occurrence.”

B.                  Employee files Exemption Certificate at beginning of calendar year or at beginning of employment certifying:

i.                    That employee expects to receive less than $12,000.00 from all employment in the City in that calendar year;

ii.                  With documentation including copies of all W-2 forms or final pay statements from all employment in the City for the previous year.

C.                  Employee files Exemption Certificate at any time certifying and with documentation that:

·         Employee is member of armed forces and has orders for active duty status in calendar year (not including training).

D.                 Employee files an Exemption Certificate at or before the beginning of the calendar year certifying one of the following military disabilities resulting from military service:

i.                    Blindness;

ii.                  Paraplegia;

iii.                Double or quadruple amputation;

iv.                 100% permanently disabled.

Proof or documentation of the following must be provided:

·                     Honorable discharge

·                     Veterans’ Administration acknowledgement of service-connected disability

6.                   When Income Exemption Ends.  If an employee receiving the income exemption receives income and profits in excess of $12,000.00 in the calendar year, Employer shall, upon notification by the employee or City, or upon its own determination of total income paid, in the first payroll following loss of this exemption, withhold and pay over the amount due for all prior payroll periods for which the tax had not been withheld and thereafter collect the tax per payroll period as other employees.

7.                   Refunds.  Employers may refund the LST if an employee files a certificate of exemption within the quarter before the tax is reported and received by the city.  If the LST withheld has already been reported to the city then the employee can pick up a refund form at the City of Meadville or at http://www.cityofmeadville.org/taxes2.htm.

8.                   Local Services Tax Receipts.  Employers are not required to issue a receipt to their employees for the LST withheld.  The employee may use their pay stub as a receipt or request a receipt from the City of Meadville, Earned Income Tax Office.

9.                   Questions.  Please contact:  City of Meadville, Earned Income Tax Office, 984 Water Street, Meadville, PA 16335 or phone 814-333-3338.