Local Services Tax (LST)
Formerly Emergency & Municipal Services Tax
Effective January 1, 2008, the Local Services Tax (LST) replaces the Emergency & Municipal Services Tax (EMST). Like the EMST, the new tax is assessed on each employed individual by the political subdivision of the individual's place of employment.
The Local Services Tax remains a flat $52.00 tax levied annually on all persons engaging in an occupation within the geographic boundaries of the Township, including self-employed persons. This amount applies regardless of the amount of earnings over $12,000.
The tax applies to all persons working in the Township of Upper St. Clair regardless of residence. A persons earning less than $12,000 per year is exempt from the tax.
A person subject to the Local Services Tax shall pay a pro rata share of the tax each payroll period. The pro rata share of the tax to be paid each payroll period shall be determined by dividing $52.00, the rate of the Local Services Tax, by the number of payroll periods established by the employer for the calendar year. For example, if an employer has 26 pay periods in a year, $2.00 ($52.00/26 periods) shall be deducted from each pay.
How the Tax is Paid
All employers in the Township (except the federal government) are required to deduct the $52.00 tax from employee wages based on the above-mentioned withholding procedures. Federal employees are required to pay the tax directly.
Employer Remittance of Collected Tax and Reporting of Collection Detail
Employers are required to remit the Local Services Tax withheld from employees, and file a Local Services Tax Quarterly Return within thirty days after the end of each quarter of a calendar year. The Local Services Tax Quarterly Return to be filed for each physical location in the area shall list the name, address, social security number, number of payroll periods for which the Local Services Tax was withheld, and the amount of Local Services Tax being remitted for each employee. In addition, the quarterly report shall list all employees that are deemed exempt.
Exemptions to the Local Services Tax
Each person shall pay no more than $52.00 in Local Services Tax in a calendar year, irrespective of the number of political subdivisions within which a person may be employed.
The law requires municipalities and school districts levying the Local Services Tax, to exempt any person from the Local Services Tax whose total earned income and net profits from all sources within the Township are less than $12,000 for a calendar year.
An annual exemption certificate must be completed by the employee, and submitted to the employer and the Tax Office. A copy of the exemption certificate is included, and may be obtained at the Tax Office. The certificate is also available on the web site www.newPA.com. Upon receipt of the exemption certificate, the employer shall not withhold the tax from the person during a calendar year, or the remainder of a calendar year for which the exemption certificate applies.
With respect to a person claiming an exemption from the Local Services Tax, upon notification to an employer by the person that the person has received earned income and net profits from all sources equal to, or in excess of $12,000 in a calendar year, or upon an employer's payment to the person of earned income in an amount equal to, or in excess of $12,000 in a calendar year, an employer shall withhold the Local Services Tax from the person as follows:
The employer shall withhold from the person for the first payroll period after receipt of the notification under the above paragraph, a lump sum equal to the amount of the tax that was not withheld from the person due to the exemption certificate filed by the person, plus the per payroll amount due for that first payroll period.
In the event the employment of the person subject to withholding of the Local Services Tax under this exception is severed in a calendar year, the person shall be liable for any outstanding balance of tax due, and the political subdivision levying the tax may pursue collection under the act.
Employers shall be responsible for retaining a copy of all exemption certificates filed by employees within a given calendar year, for a minimum of three years. Employers failing to withhold the Local Services Tax from an employee or employees, and do not have copies of the employee exemption certificate or certificates, will be held responsible for the payment of the Local Services Tax, as if the tax had originally been levied against the employer.
Employees are entitled to refunds, if the Local Services Tax (LST) is deducted and the total earnings are less than $12,000, or if the Local Services Tax (LST) was paid to another jurisdiction prior to working and paying the tax in the Township of Upper St. Clair.
The Request for the Township of Upper St. Clair Local Services Tax (LST) Refund form is available here.