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Senate Bill 218 signed into law on June 21, 2007 amends the Local Tax Enabling Act to make changes to the Emergency & Municipal Service Tax effective January 1, 2008.

The name of the tax will change to "LOCAL SERVICES TAX." The rate, determined by the Pennsylvania municipality, ranges from $10 - $52. If the Local Services Tax is more than $10, there is an "Income Exemption" for employees earning a total of less than $12,000 during the calendar year. Employers must make upfront exemption forms readily available to employees at all times and provide new employees with the forms at the time they are hired. A "Military Exemption" is also available for disabled veterans and members of the Armed Forces Reserves on active duty during the tax year.

If the rate of Local Services Tax is over $10, employers will be required to withhold the tax pro-rated over the number of pay periods. ($52 / 26 pay periods = $2 per pay). The employer is only liable for the proportionate amount withheld during the period of time employed.

If you have questions about the tax law and its ramifications, please contact Tax Specialist Crystal Martin at 717-757-6999 or 800-745-8233, or send her an email by using the form below.


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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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