Post by mikekerstetter on Mar 12, 2011 7:55:29 GMT -5
www.sungazette.com/page/content.detail/id/561414/Non-resident-tax-recommended.html?nav=5011
Non-resident tax recommended
March 12, 2011 - By AMANDA ALEXANDER - aalexander@sungazette.com
Loyalsock Township this week became the first local municipality to enact an earned income tax for non-residents, and the local tax office is recommending all Lycoming County municipalities follow suit.
Mark Hess, tax examiner for the Williamsport Area School District Municipal and School Earned Income Tax Office - the taxing authority for all local municipalities - said the earned income tax for non-residents will be fixed at .5 percent. The tax will be imposed not just on out-of-state workers but on workers from neighboring municipalities as well.
"It's anyone who works in a jurisdiction that they don't live in," he said.
Hess said that without an imposed earned income tax for non-resident workers, many employers opt to tax residents only.
"There's no requirement for them to withhold any tax at all (from non-residents)," Hess said. "It becomes a hardship and burden on (the township) to pay their taxes."
He added that taxing non-residents can become a burden for employers because the tax rate is different for each school district.
"That makes it very difficult ... for employers to know what rate to withhold," he said.
Hess said the tax office is recommending the move in order to bolster the tax bases of local municipalities. While he couldn't say for sure whether the idea was prompted by the influx of out-of-state workers in the gas industry, he said that impact is a consideration.
"We have non-resident workers coming in here in the gas field ... who wouldn't pay any tax at all if they didn't pay a non-resident tax," he said.
The earned income tax for non-residents is collected by the tax collector in the jurisdiction where the taxpayer works and then forwarded to the tax collector in the jurisdiction where the taxpayer lives.
Municipalities with ordinances in place imposing the earned income tax on non-residents will require employers to withhold from all employees, regardless of their place of residence.
Hess said the new ordinance will not double non-resident workers' taxes; rather, it will remove a portion of the taxes they pay, with the majority of the earned income tax going to the workers' place of residence and .5 percent going to the municipality in which they work.
While .5 percent isn't much, Hess said, for the municipalities, "it's better than nothing."
Non-resident tax recommended
March 12, 2011 - By AMANDA ALEXANDER - aalexander@sungazette.com
Loyalsock Township this week became the first local municipality to enact an earned income tax for non-residents, and the local tax office is recommending all Lycoming County municipalities follow suit.
Mark Hess, tax examiner for the Williamsport Area School District Municipal and School Earned Income Tax Office - the taxing authority for all local municipalities - said the earned income tax for non-residents will be fixed at .5 percent. The tax will be imposed not just on out-of-state workers but on workers from neighboring municipalities as well.
"It's anyone who works in a jurisdiction that they don't live in," he said.
Hess said that without an imposed earned income tax for non-resident workers, many employers opt to tax residents only.
"There's no requirement for them to withhold any tax at all (from non-residents)," Hess said. "It becomes a hardship and burden on (the township) to pay their taxes."
He added that taxing non-residents can become a burden for employers because the tax rate is different for each school district.
"That makes it very difficult ... for employers to know what rate to withhold," he said.
Hess said the tax office is recommending the move in order to bolster the tax bases of local municipalities. While he couldn't say for sure whether the idea was prompted by the influx of out-of-state workers in the gas industry, he said that impact is a consideration.
"We have non-resident workers coming in here in the gas field ... who wouldn't pay any tax at all if they didn't pay a non-resident tax," he said.
The earned income tax for non-residents is collected by the tax collector in the jurisdiction where the taxpayer works and then forwarded to the tax collector in the jurisdiction where the taxpayer lives.
Municipalities with ordinances in place imposing the earned income tax on non-residents will require employers to withhold from all employees, regardless of their place of residence.
Hess said the new ordinance will not double non-resident workers' taxes; rather, it will remove a portion of the taxes they pay, with the majority of the earned income tax going to the workers' place of residence and .5 percent going to the municipality in which they work.
While .5 percent isn't much, Hess said, for the municipalities, "it's better than nothing."
