The Township will continue to collect EMST and/or OPT for any year prior to January 1, 2008. Taxpayers are still required to file the Fourth Quarter EMST return for the quarter ending December 31, 2007. This return is due on or before January 31, 2008.
How will the LST revenue be used by the Township of Lower Merion?
Act 7 requires municipalities to use at least 25 percent of the tax revenue for emergency services, including police, fire and ambulance protection. The remainder may be use for road construction or maintenance, property tax reduction, or property tax relief through the implementation of a homestead or farmstead exemption.
How many people does this affect?
It is estimated that approximately 41,000 people work in Lower Merion Township. Of that number, approximately 20% are Township residents; the remaining 80% are non-resident individuals who come into the Township and enjoy the many services and amenities provided by the Township.
When is payment of the LST due?
The LST is effective January 1, 2008 and provides that employers are responsible for withholding the LST for each individual subject to the tax. Employers are required to withhold the LST for each individual who reaches or is expected to reach the minimum level of $12,000 in annual compensation. Employers and/or self-employed individuals are required to remit the tax collected and file a tax return with the Township’s Department of Finance Business Tax Collections Office on or before the last day of April, July, October and January for the four quarters ending the last day of March, June, September and December. In the case of schedule C filers (self-employed individuals, Sole Proprietors, etc.), the entire $52 LST should be paid in the first quarter. If a self-employed or sole proprietor does not reasonably expect to have gross receipts of more than $12,000 from within the Township then an Exemption Certificate can be filed.
Will employers have to vary withholding amounts to make sure that $52 is collected from every employee?
No, the amount of LST paid for an individual will vary depending on the individuals hire date and/or termination date. Employers are only required to withhold the prorated amount for each per pay period that an employee works. The only situation which would require a lump sum catch up withholding is if an employee has filed an exemption certificate and subsequently exceeds $12,000 in income.
If LST is incorrectly withheld is there a refund process?
The Township will refund any overpayment of LST tax in excess of $1 to individuals that file a Refund Application with required documentation to demonstrate that they were not subject to the tax. In order to be refunded, the Township must have received the withheld funds from the employer.
Is there any way for those eligible for an exemption to avoid having LST withheld?
Yes, employees or individuals who had total earnings and net profits of less than $12,000 within the Township of Lower Merion in the prior calendar year (2007) and reasonably expect that they will not earn more than $12,000 in 2008 can file an Exemption Certificate to prevent LST withholding. Exemption Certificates and instructions are available on the township website. There are substantial penalties for filing fraudulent exemption claims.
Will any person who works in the Township be exempt from paying LST?
The Township’s ordinance provides a low-income exemption to individuals whose total earnings and net profits from all sources within the Township are less than $12,000 per calendar year. The LST also includes a new Active Duty Military Exemption for any individual called into active military service at any time during the tax year. Active military service does not include weekend or summer reservist training.
What differentiates the EMST from the LST?
The major difference between the EMST and LST is the manner in which the tax is withheld and paid. Unlike the EMST which was withheld in a lump sum, LST is withheld over the number of annual pay periods an employer has established for the calendar year. The LST also expands the available exemptions for employees.
What is the Local Services Tax (LST)?
Commonwealth of Pennsylvania Act 7 of 2007 amended the Local Tax Enabling Act, Act 511 of 1965, to make major changes to the Emergency and Municipal Service Tax (EMST) effective January 1, 2008. The EMST is being renamed the Local Services Tax (LST) to better reflect how the funds are used by municipalities. Like the EMST, the LST is a payroll tax in the amount of $52 per year paid by ALL individuals (employed or self-employed) who work in the Township and are not eligible for an exemption.
What are the requirements for a home based business?
All home based businesses must have zoning approval. Contact the Building Regulations Department for a Zoning Application at 610-645-6165. In addition, after zoning approval, you must obtain a business license at 610-645-6142 or email firstname.lastname@example.org.
Are there legal steps to having a going out of business sale?
Yes, for more information please contact the Finance Department at 610-645-6142.
Who do I call about business tax questions?
For general questions about business taxes, processing issues or for information on setting up a new account please the business tax hotline at 610-645-6142. For your convenience, your questions may also be emailed to email@example.com.
Does Lower Merion Township have an Earned Income Tax (EIT)?
Does Lower Merion Township have a Gross Receipts Tax?
Yes, Mercantile Tax is levied on retail stores and restaurants at a rate of 1 mill ($1.00 on each $1,000) of gross receipts. Business Privilege Tax is levied on all service-type businesses at a rate of 1.5 mills ($1.50 on each $1,000) of gross receipts.
Is there any statute of limitation on an unfiled business tax form?
There is no statute of limitation. The Township is required to collect taxes due from the date business started.
Where do I register a fictitious (business) name or tax ID number?
To receive an application or assistance about a fictitious (business) name, call the Fictitious Name Department in Harrisburg at 717-787-1057.You can also visit the Pennsylvania Department of State website.
To receive a federal tax ID number, please call the Philadelphia IRS Service Center Tele-TIN unit at 866-816-2065. You can also visit the Internal Revenue Service website.
What is the due date for Mercantile / Business Privilege License/Tax forms?
The Mercantile/Business Privilege License/Tax return is due April 15th each calendar year.
If a business begins after April 15th, the license/estimated tax is due 40 days after the business opens.
The new Mercantile / Business Privilege license / tax forms are available for download: