Emergency & Municipal Services Tax: Administration Bill No 29-2004

Effective January 1, 2005 the City of Lancaster has renamed the Occupational Privilege Tax the Emergency & Municipal Services Tax (EMST). The tax, increased from $10 to $52, is levied against individuals who are employed within the City’s corporate limits during the calendar year. It is intended that no one individual pay more than $52 per year for the Emergency and Municipal Services Tax. Each individual with more than one occupation will pay the tax to his/her principal employer.

Each employer within the City as well as those employers situated outside the City, but engaged in business within the City, is responsible for collecting the $52 tax from each employee. The tax applies to employees working in the City regardless of method of remuneration and to self-employed individuals who perform services of any type or engage in any profession or occupation within the City limits. An individual whose taxable income from all sources is less than $12,000 is exempt from payment of the EMST.

Employers must provide each employee from whom the tax has been deducted with proof of the deduction to be used in the event of an employment change. Said form, upon presentation to any other employer, shall provide proof of payment of the tax and no additional tax may be deducted for the current tax year. LOP2 forms are available at the City Treasurer’s Office or employers may use a form of their own design. The form must include the following information: Emergency and Municipal Services Tax, year, amount deducted, employer’s name, city account number, address, employee’s name, address, and social security number.

Each employer shall file a return showing the tax computation on billing forms provided by the City Treasurer’s Office. Employment records from January 1 to March 31 of the tax year will be used to determine the number of employees from whom the tax was deducted. The tax is payable to the City Treasurer by April 30^{th of} each year. Supplemental payments for new employees hired between April 1 and June 30 must be remitted by July 31; July 1 to September 30 remitted by October 31; and October 1 to December 31 remitted by January 31 of the following year. Supplemental documentation detailing the evidence of deductions must accompany the payment report. Preferably, documentation to be included with payment may be the inclusion of a payroll or computerized printout or electronic file detailing the information as it is listed on the individual LOP2 forms. The City’s copies of the LOP2 form may be included as an acceptable alternative.

Employers will be required to deduct an additional amount for all new employees who have originally paid an EMST of less than $52 while employed outside the City’s corporate limits. Upon presentation of proof of the original deduction the employer must deduct and remit to the City the difference between the $52 EMST and the employee’s original deduction. The City employer shall identify such employee on his return to the City by setting forth his name, address and the name and address of the employer who deducted the EMST in the other municipality, the amount of EMST withheld, and the name of the municipality to whom the EMST was paid. It is the employer’s responsibility to withhold the EMST from all employees regardless of total earnings. If the City determines that an employee earned less than $12,000 in a given calendar year, the City will refund the EMST withholding to the employee.

If payment remains unremitted thirty or more days after the due dates set forth, a penalty of 5% shall be added to the flat rate of such tax for nonpayment and interest on the unpaid balance will be computed at ½% per month. Further, a fine of not less than $100 or more than $1,000 per offense may be levied upon any employer who fails or refuses to comply with withholding and remitting this tax.