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Old 04-23-2009, 10:36 AM
 
82 posts, read 190,133 times
Reputation: 25
Default Please explain local taxes to me.

I was looking on a town's website and it had a laundry list of taxes which we may owe, with no links to find out about them.

Earned income tax
Wage tax
Occupation tax (the example given was that school bus drivers pay $25, and attorneys pay $290)
Mercantile tax on retail gross receipts
Local services tax

We are self employed, in both service and retail occupations.

Here in Taxachusetts, we pay state income tax, property tax, and federal income tax -- all the rest of our taxes are hidden in the costs of what we buy.

How do I find out about all these taxes and how much they are and to whom to pay them? The website also stated that the percentages vary with each municipality.

Edited to include: Per capita tax (for adults) *and* business privilege tax.

Thanks,
RC

Last edited by RoughCollie; 04-23-2009 at 11:30 AM..
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Old 04-23-2009, 11:01 AM
 
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You'll need to be more specific. It depends on the municipality and county. Where you live and where you work also play a part.
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Old 04-23-2009, 11:31 AM
 
82 posts, read 190,133 times
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Quote:
Originally Posted by Hopes View Post
You'll need to be more specific. It depends on the municipality and county. Where you live and where you work also play a part.
Okay, I'll wait until I can be more specific.
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Old 04-23-2009, 10:47 PM
 
33 posts, read 73,285 times
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Quote:
Originally Posted by RoughCollie View Post
I was looking on a town's website and it had a laundry list of taxes which we may owe, with no links to find out about them.

Earned income tax
Wage tax
Occupation tax (the example given was that school bus drivers pay $25, and attorneys pay $290)
Mercantile tax on retail gross receipts
Local services tax

We are self employed, in both service and retail occupations.

Here in Taxachusetts, we pay state income tax, property tax, and federal income tax -- all the rest of our taxes are hidden in the costs of what we buy.

How do I find out about all these taxes and how much they are and to whom to pay them? The website also stated that the percentages vary with each municipality.

Edited to include: Per capita tax (for adults) *and* business privilege tax.
Earned income tax - Typically called wage tage - if you are not living in the city of Pgh, typically the Earned Income tax is 1% to 1.2% in most boroughs. Paid quarterly to the wage tax collector. If you do live in the city of Pgh, I believe the rate is currently 3% but I am not sure (I live in a borough)

Occupation tax - Typically this is $52 per year to your borough - my work withholds it an handles it fo rme.

Mercantile tax - If you live in the city of Pgh, the current rate is 1% on gross wages. Most boroughs (i.e. Ross Township) also have this same law. I am not sure as to each borough but I'm sure their website will have this info.

State income tax - 3.07% of your wages / receipts

Taxes for a business a definitely higher if you operate in the city of pgh, operating out of suburb would be your best option for tax purposes.
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Old 04-24-2009, 06:03 AM
 
41,702 posts, read 46,172,177 times
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Quote:
Originally Posted by LAMBSN View Post
Occupation tax - Typically this is $52 per year to your borough - my work withholds it an handles it fo rme.
This only applies if you work in the city but live elsewhere. The occupation tax helps pays for city resources commuters use. It makes sense. We don't live in the city but we use the resources. Some townships might have an occupation tax for people working in their township who don't live there, but not all townships have this tax.
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Old 04-24-2009, 06:13 AM
 
33 posts, read 73,285 times
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Quote:
Originally Posted by Hopes View Post
This only applies if you work in the city but live elsewhere. The occupation tax helps pays for city resources commuters use. It makes sense. We don't live in the city but we use the resources. Some townships might have an occupation tax for people working in their township who don't live there, but not all townships have this tax.
Most townships have this nowadays. We are required to withhold it from several of our employees who work outside the borough and our company is located in Hampton Township. Some boroughs have renamed it the local services tax in order to implement the tax.
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Old 04-24-2009, 06:16 AM
 
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Quote:
Originally Posted by LAMBSN View Post
Most townships have this nowadays. We are required to withhold it from several of our employees who work outside the borough and our company is located in Hampton Township. Some boroughs have renamed it the local services tax in order to implement the tax.
Makes sense. This tax can be avoided by living and working in the same township/city. Since it only applies to residents who don't live within a township/city, then people only pay it once unless they have a second job in a different area, right? I wonder if some townships have income limits for people who only make a few thousand dollars per year working the second job....
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Old 04-24-2009, 06:38 AM
 
Location: Pittsburgh, PA
1,384 posts, read 1,268,464 times
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Quote:
Originally Posted by Hopes View Post
Makes sense. This tax can be avoided by living and working in the same township/city. Since it only applies to residents who don't live within a township/city, then people only pay it once unless they have a second job in a different area, right? I wonder if some townships have income limits for people who only make a few thousand dollars per year working the second job....
No, that's not true. It's a tax paid to the township/borough/city where you work, but it doesn't matter if you live there. I live in the city and work in the city and pay the $52 per year. Here's a website that may help with the multitude of possible local taxes in PA. Below is a description of the tax. The City of Pittsburgh, and Homestead are two areas that I know definitely charge $52 per year. Some other areas may still be doing the $10 we all used to pay. And there is an exemption for low income.

It also talks about the Occupation Tax which is often confused with what is paid most frequently in this area because it used to be called the Occupation Privilege Tax. Centre County used this Occupation Tax when I lived there. You were sent an annual bill for an amount levied based on your job title with no tie to your actual salary. As far as I know, it's not used by municipalities in this area, but someone correct me if I have that wrong.

What Are PA's Local Taxes?

3. Emergency & Municipal Services Tax
Prior to Act 222 of 2004, the Emergency & Municipal Services Tax used to be called the Occupation Privilege tax, and is a tax on the privilege of working in the jurisdiction. All persons employed in the jurisdiction levying this tax must pay, regardless of whether they are legal residents of the jurisdiction. Municipalities and school districts can exempt low-income residents from paying the tax (Act 222 allows these jurisdictions to exempt taxpayers with annual income of less than $12,000 from paying this tax). The maximum levy is $52.
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Old 04-24-2009, 07:15 AM
 
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Thanks for the clarification, Tinare. One way or another, you will pay an occupation tax where you work, regardless of if you live there. God it!

As for the tax based on job title, the OP must have pulled that info from another county. I asked some attorneys I know who work in Allegheny County and none of them pay a higher occupation tax.
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Old 04-24-2009, 08:19 AM
 
Location: Pittsburgh, PA
1,384 posts, read 1,268,464 times
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Quote:
Originally Posted by Hopes View Post
Thanks for the clarification, Tinare. One way or another, you will pay an occupation tax where you work, regardless of if you live there. God it!
Yep, 'cause it's for the privilege of working there. Though, some days, my job doesn't feel so much like a privilege...
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