WHEREAS, the Supervisors of Loyalsock Township have determined that rules and regulations are desirable of the proper administration and collection of the Business Privilege Tax; and
WHEREAS, Section 9, Subsection B, of the Resolution providing for the assessment, levy and collection of the Business Privilege Tax empowers the Tax Administrator, with the approval of the Supervisors to prescribe and promulgate such rules and regulations.
NOW, THEREFORE, It is hereby resolved as follows:
That the Loyalsock Township Supervisors approve the Rules and
Regulations for the administration and collection of the Business
Privilege Tax, as prescribed and promulgated by the Tax Administrator and transmitted under Draft dated the 12day of April, 1988.
ENACTED as a Resolution this 24th day of May, 1988.
LOYALSOCK TOWNSHIP SUPERVISOR
BUSINESS PRIVILEGE TAX RULES AND REGULATIONS
WHEREAS, the Board of Loyalsock Township School District has determined that rules and regulations are desirable of the proper administration and collection of the Business Privilege Tax; and
WHEREAS, Section 9, Subsection B, of the Resolution providing for the assessment, levy and collection of the Business Privilege Tax empowers the Tax Administrator, with the approval of the School Board, to prescribe and promulgate such rules and regulations.
NOW, THEREFORE, It is hereby resolved as follows:
That the Loyalsock Township School District approves the Rules and Regulations for the administration and collection of the Business Privilege Tax, as prescribed and promulgated by the Tax Administrator and transmitted under Draft dated the 13 day of April, 1988.
ENACTED as a Resolution this 25th day of May, 1988.
LOYALSOCK TOWNSHIP SCHOOL DISTRICT
1. Purpose. These rules and regulations are promulgated for the purpose of administering the Business Privilege Tax Ordinance.
2. Definitions. (See Appropriate Section of Resolution)
3. What Constitutes “Doing Business in the Township of Loyalsock?”
A. Whether or not a person carries on a taxable activity within the meaning of the Business Privilege Tax Resolution is essentially a question of fact. In general, taxable activity included any trade, business, profession, vocation or commercial activity that is carried on for gain or profit in the Township of Loyalsock. The tax is imposed on any person who exercises the privilege of carrying on the aforementioned activities in the Township of Loyalsock and it is measured by the gross receipts received in or allocable to the Township.
(1) Intra-And Interstate Business. Doing business includes any trade, business, profession, vocation or commercial activity of an intrastate or interstate character, except as specifically exempted or excluded by the Business Privilege Tax Resolution or these regulations.
(2) Residence or Domicile. A person who engages in taxable activity in the Township of Loyalsock is subject to the tax, whether or not he is a resident and whether or not he has a permanent place of business in the Township.
(3) Foreign Corporations. A foreign corporation is subject to the tax if it carries on taxable activity in the Township of Loyalsock, whether or not it is licensed to do business in Pennsylvania.
(4) Allocation of Business Done and Gross Volume of Business.
A) General. Receipts from any transaction shall be attributable to the Township of Loyalsock if any event forming a part of the transaction occurs within the Township.
B) Persons Rendering Professional, Commercial, Industrial or Personal Services. If a person engaged in a profession or vocation or in rendering personal services maintains a place of business only in the Township of Loyalsock, the entire receipts from such personal services must be included in the measure of tax, whether or not the services are performed in the Township. Receipts will be deemed attributable to the Township if they result from the efforts of employees who work in, from or are attached to the taxpayer’s Township place of business.
C) Lessors of Tangible Personal Property. Persons doing business within the Township of Loyalsock who own and hold title to tangible personal property which is leased to others are required to report the gross receipts from the rental of or license to use such property, according to the following regulations:
(1) Where the original situs of the property is within the Township of Loyalsock, the receipts from tangible personal property leased to others are deemed to be:
a) Wholly taxable receipts, if the property is delivered to lessees within Pennsylvania.
b) Non-taxable receipts, if the property is delivered to lessees outside Pennsylvania.
(2) Where the original situs of the property is outside the Township of Loyalsock but within Pennsylvania, the receipts from tangible personal property leased to others are deemed to be:
a) Allocable and taxable receipts, if the property is
delivered to lessees within the Township of Loyalsock.
b) Nonallocable and non-taxable receipts, if the property is delivered to lessees outside the Township of Loyalsock whether within or outside Pennsylvania.
The term “original situs” as used herein, means the place at which the property is warehoused when not leased to others and to which place the property is returned upon termination of the lease. Where there is no such established place, the term “original situs” shall mean the principal office of the taxpayer. This subsection does not apply to conditional sales of tangible personal property.
D. Lessors of Real Property. Persons doing business within the Township of Loyalsock who own and hold title to real property which is leased to others are required to report the gross receipts from the rental of all such property which is situated in the Township.
E. Location of Vendee. Receipts from the sale of goods, wares and merchandise delivered to a vendee located outside the Township of Loyalsock by an employee who works in, from or is attached to the taxpayer’s Township place of business, are fully taxable if the vendee is located within Pennsylvania and nontaxable if the vendee and place of delivery is located outside Pennsylvania.
5. Interstate Commerce.
A. General. Receipts from transactions involving more than one state are not exempt from tax, but are to be included in the tax base in their entirety or excluded in their entirety, as provided in these regulations. Transactions defined below as interstate commerce are exempt from the tax. Those which do not constitute interstate commerce are taxable in full.
B. What Constitutes “Interstate Commerce?”
Transactions will be deemed to involve interstate commerce only when they directly involve the sale, exchange or transportation of commodities between the states, the transportation of passengers between the states, or the transmission of intelligence or communications between the states. The citizenship or residence of the parties to the transaction is of no significance. Where a sales transaction is involved, it is of no importance in which the state title to the goods passes, or whether the goods are shipped f.o.b. one state or another.
C. Sale and Delivery in Pennsylvania. Interstate commerce is not deemed to be involved in sales made by the Township of Loyalsock seller to customers located outside Pennsylvania where the property is delivered directly to the purchaser of his agent within Pennsylvania, notwithstanding the fact that the purchaser of his agent intends to, and later does, transport the property to a point outside Pennsylvania.
D. Shipment From Township of Loyalsock by Seller. Sales will be considered as having been made in interstate commerce when the seller, as a necessary incident to the contract of sale, agrees to, and does deliver the property to the purchaser at a point outside Pennsylvania, or delivers the property to a common carrier consigned to the purchaser at a point outside Pennsylvania.
E. Delivery to “Packing Company” In Pennsylvania. Whenever property is sold by the seller to a purchaser located outside Pennsylvania and, pursuant to the terms of the contract of sale, delivery is made from the seller’s place of business in the Township of Loyalsock to a packaging and delivery to the purchaser at a point outside Pennsylvania, said transaction constitutes interstate commerce.
F. Delivery to Buyer’s Pennsylvania Place of Business.
Where a purchaser maintains an office, warehouse or receiving station in Pennsylvania for the purpose of receiving, inspecting, assembling, routing, or combining shipments destined for points outside Pennsylvania, interstate commerce is not deemed to be involved with respect to deliveries made to such premises by the Township of Loyalsock seller, notwithstanding the fact that the purchaser intends to, and later does, transport the property received at such premises to a point outside Pennsylvania.
G. Shipments Into the Township of Loyalsock from Seller’s Out-of-State Place of Business. With respect to sales made by a Township of Loyalsock seller, the transaction will be considered to be one in interstate commerce if, by the express terms of the contract of sale or the established practice of doing business, the seller is required to deliver by transporting or shipping the property from his place of business situated outside Pennsylvania directly to the purchaser located within the Township of Loyalsock.
H. Shipments Into Pennsylvania From a Third Party’s Out-of-State Place of Business. Interstate commerce is not deemed to be involved if the Township of Loyalsock seller causes direct delivery to be made to the purchaser at a point in Pennsylvania from an out-of-state source of supply owned or operated by a third party (one from whom the seller buys).
I. Delivery From Seller’s Out-of-State Place of Business Via His Office. Interstate commerce is not deemed to be involved with respect to sales made to a Pennsylvania purchaser if the property is shipped from the seller’s place of business located outside Pennsylvania to the seller’s place of business located in the Township of Loyalsock from which point the goods are delivered to the purchaser.
6. Contractors Performing Building Or Construction Work Outside the Township of Loyalsock. (See appropriate section of Resolution.)
7. Brokers and Agents With Out-of-Township Branch Offices. (See appropriate section of Resolution.)
8. Businesses With Out-of-Township Branch Offices, Stores, Etc. (See appropriate section of Resolution.)
9. Tax Rate. (See appropriate section of Resolution.)
10. Persons in Business During the Entire Prior Calendar Year. (See appropriate section of Resolution.)
11. Persons Who Commenced Business Before the Beginning of the Tax Year But After the Beginning of the Prior Full Calendar Year. (See appropriate section of Resolution.)
12. Persons Who Commenced Business After the Beginning of a Tax Year. (See appropriate section of Resolution.)
13. Business Temporary, Seasonal or Itinerant by Nature. (See appropriate section of Resolution.)
14. Persons, Businesses and Receipts Exempted/Excluded.
A. Non-profit Corporations or Associations; Religious, Charitable and Educational Institutions. Business Income Not Excluded. The exclusion from taxation of the gross receipts form the operation of non-profit religious, charitable and educational corporations or associations is limited to those receipts derived from activities which are directly related to the non-commercial purpose of the organization. Commercial activities carried on by such an organization are taxable. All business income of nonprofit religious, charitable and educational organizations is taxable.
B. Receipts From Sales to Governmental Agencies and Non-Profit Organizations. Sales to Institutions. Receipts from sales made or services rendered to governmental agencies and to non-profit religious, charitable and educational corporations or associations shall not be excluded from the tax base. The resolution does not grant an exclusion to taxpayers transacting business with such agencies, corporations or associations.
C. Commonwealth Tax or License/Local Tax or License.
(1) Nominal or Registration Fees. The fact that a taxpayer receives a certificate or other document which is designated a “license” by the Commonwealth of Pennsylvania for which the taxpayer pays a sum of money does not exempt the taxpayer from the tax. Flat annual fees, fees which are not related to gross income or amount of production, or fees that are nominal in nature are not considered true license fees and, hence, payment of such fees will not exempt the taxpayer from the tax.
(2) Local License or Permits. Payment to the Township of Loyalsock for license and permits, as required by Township resolutions, will not exempt the taxpayer from the tax.
(3) Non–Licensed Functions Taxable. The receipts of any person who falls within the Commonwealth tax or license fee exemption, which are derived from any activity which if conducted separate and apart from other business activities would not be subject to the Commonwealth tax or license fee, shall not be excluded from the tax base.
(4) Local Tax Under Commonwealth Authority. Local taxes levied by political subdivisions though authorized by Acts of Assembly, are not considered Commonwealth taxes or license fees.
(5) Monies Returned to Municipalities by the Commonwealth. Any tax which is collected by the Commonwealth by which, with the exception of administrative costs, is returned to the political subdivisions, is not considered a Commonwealth tax or license fee. Such taxes include, but are not limited to:
(a) Gross receipts taxes of foreign Fire and Casualty Insurance Companies.
(b) License fees for hotel, restaurant and club liquor licenses.
(6) Exempted Receipts. State license fees which exempt receipts earned thereunder include, but are not limited to, those fees levied under the following Acts:
(a) Small Loan Companies, Act of June 17, 1915, P.L. 1012 as amended (7 P.S. Sec. 6151, et seq.)
(b) Consumer Discount Companies, Act of April 8, 1937, P.L. 262, as amended (7 P. S. Sec. 6201, et seq.)
D. Utilities. The receipts of any public utility operating under the regulation of the Pennsylvania Public Utility Commission or the jurisdiction of the Interstate Commerce Commission, derived from supplying services at rates specified in their tariffs shall be exempted from the tax base. Public utilities shall not exclude from their tax base receipts derived from sales of appliances, equipment, advertising, etc. A contract carrier is not a public utility.
E. Banks. The gross receipts of any bank regulated by Act of Assembly shall be excluded from the tax base.
F. Insurance Companies. Receipts from the premiums of stock and mutual insurance companies, whether domestic or foreign, regulated by Acts of Assembly shall be excluded from the tax base.
G. Manufacturers. The gross receipts of any manufacturer, attributable to the business of manufacturing, shall be excluded from the tax base. The business of manufacturing consists of giving new shapes, qualities or combinations to material which has already gone through some other artificial process, creating a new and different article with a distinctive name, character, and use. Whether or not an article is a manufactured product depends on whether or not it has gone through a substantial transformation in form, qualities and adaptability in use from the original material, so that a new article or creation has emerged. If there is merely a superficial change in the original materials without any substantial and well signalized transformation in form, qualities and adaptability in use, it is not a new article or new production.
H. Distributors of Malt or Brewed Beverages. The receipts of any master or importing distributor of malt or brewed beverages operating under license and regulation of the Pennsylvania Liquor Control Board shall be excluded from the tax base to the extent that such receipts are attributable to the wholesale and retail sales of malt or brewed beverages. Wholesale and retail sales of non-alcoholic beverages, food, ice, etc., and other business of such distributors shall be included in the tax base.
I. Intrastate Transportation of Persons and Commodities. The receipts of any business, operating under the regulation of the Pennsylvania Public Utility Commission, derived from the intrastate transportation of persons and commodities at rates specified in its tariffs shall be excluded from the tax base.
J. Property Subject to Commonwealth Tax. (See appropriate section of Resolution.)
15. Determination Subject to Commonwealth Tax. (See appropriate section of Resolution.)
(1) Gross consideration shall mean gross receipts received in, from or by reason of, any sale made, rental, or service rendered or commercial or business transaction occurring in or attributable to the Township of Loyalsock, including cash, credits and property of any kind or nature, without deduction on account of the cost of materials, labor, services or other costs, interest or discount paid, or any other expenses whatsoever.
(2) The word “sale” as used in the definition of the term “gross receipts” includes, but is not limited to, any transfer of title for a consideration. It included exchange, barter and bailments.
B. Real Estate Brokers.
(1) Generally, real estate brokers and agents are required to report as taxable receipts, the commissions and fees received for services rendered as agent in promoting the purchase and sale of real property for others. Brokers and agents not having an office in the Township of Loyalsock shall report as taxable receipts commissions received on the sale of properties within the Township. Such amount does not include the gross selling price of the property, except as set forth in subparagraph 3.
(2) Deduction of Shared Fee. A real estate broker or agent may exclude from his tax base, any commission paid by him to another broker or agent on account of a contract of purchase or sale initiated, executed or cleared in conjunction with the broker, salesman or agent to whom the commission or part of the commission is paid. Commissions paid to a salesman by a broker or agent, when the salesman is affiliated with the broker or agent, are not excluded from the broker’s or agent’s tax base.
(3) Broker’s Sale of Owned Property. If a person is in the business of taking title to real property and selling the property, he is required to include the gross selling price of the property as taxable receipts. The same person may be taxed both as a broker and as a seller, depending on the nature of the transaction. If he acts as a broker, salesman, or agent, his tax is based on commissions received. If he buys and sells real estate, wither in his own name or in the name of a straw party, he is taxed on the gross selling price of real estate.
C. Traveling Expenses.
(1) Reimbursement of traveling expenses may be excluded from gross receipts only if the taxpayer actually incurred such traveling expenses as agent for another from whom the taxpayer receives reimbursement in the exact amount he expended.
D. Trade Discounts.
(1) Deductions Allowed. Trade discounts allowed to customers may be deducted from the gross amount charged in determining the amount to be reported as receipts from sales. Trade discounts include:
(a) discounts deducted from the face amount of the bill as a method of adjusting the list price.
(b) discounts unconditionally deducted by customers at settlement of their bills and allowed as a matter of established custom of the trade without regard to the due date of such bills or the form or terms in which such bills or the form or terms which such discounts are described or stated on bills.
E. Other Discounts.
(1) Deductions Allowed. Discounts allowed to customers as cash discounts for prompt payment of their bills may be deducted from gross receipts.
F. Freight, Delivery or Other Transportation Charges.
(1) If Seller Contracts to Deliver. If the seller contracts to deliver the property sold to some designated point, or is obligated under the terms of the contract to pay transportation charges to some designated point, the transportation services are rendered to the seller and the freight, delivery or other transportation charges so incurred by the seller may not be deducted from gross receipts.
(2) If Buyer Deducts Cost of Delivery From Payment. If property is sold on terms requiring the seller to deliver such property to a designated point but the purchaser pays the amount of freight, delivery or other transportation charges in the first instance, and deducts such charges from the invoice price in making remittance to the seller, no deduction from gross receipts may be taken therefore by the seller.
(3) If Seller Advances Charges. Where the seller advances the freight, delivery or other transportation charges for the account of the purchaser in accordance with the terms of the contract of sale, such charges may be excluded from the gross receipts of the seller provided:
(a) that such charges are the actual charges incurred and are billed as such to the purchaser, and
(b) that the books and records of the taxpayer clearly indicate such facts.
G. Principal and Agent.
(1) General. Receipts from sales made, rentals or services rendered by an agent for the account of his principal are to be reported by the principal. It is immaterial in such cases whether the customer or client remits directly to the principal, or to the agent for transmittal to the principal. The agent is required to report, as gross receipts, only the commission withheld by him as compensation for his services before remitting to his principal, and any commission paid to him after remitting to his principal. No deduction from gross receipts may be taken by the principal from commission paid to, or withheld by, the agent. A manufacturer’s representative is taxable on his gross commissions unless his relationship to his principal is that of employer and employee. This relationship of employer and employee exists if the principal pays Social Security and Unemployment Compensation taxes on behalf of the person claiming exemption and if, in the event of an accident during the course of employment, the manufacturer’s representative would become entitled to Worker’s Compensation benefits.
(2) Undisclosed Principal. A person selling or renting property, including real property or rendering services for an unknown or undisclosed principal, is subject to tax as a principal unless there is disclosed in the agent’s return the identity of the principal and the amount of the sale made on his behalf.
(3) Condition as to Recognition of Agency. A person will be regarded as acting as an agent or broker in promoting or soliciting sales and rentals or rendering services for the account of a principal when it appears:
(a) that the contract of agreement between such persons clearly establishes the relationship of principal and agent, and
(b) that the books and records of the agent or broker show the name of the actual owner of the property on whose behalf the sale is made, and
(c) that the books and records of the agent or broker show the amount of gross sales and the amounts of commission due thereon.
(4) Collection by Agent. Money or property received by a taxpayer as agent for transmittal to a third party, is not to be reported by such taxpayer as gross receipts, but any commission received by him for his services, as agent, must be included in gross receipts.
H. Conditional and Installment Sales.
(1) Reported as Cash Sales. A person making conditional sales or other installment sales of property is required to report the total selling price of such sales as gross receipts for the tax year in which the contracts of sale are entered into, without regard to the fact that the seller may arrange to receive payment from the purchaser on an installment basis or that such contracts may be discounted, pledged with, or sold to, a finance company.
(2) Property Repossessed. Where tangible personal property, sold under a conditional or other installment sales contract, is repossessed by the seller, and the repossessed property is subsequently sold, the receipts from such sales are to be included in the measure of the tax only to the extent that the amount of the sale exceeds the balance due on the original sale at the time of repossession. No deduction from gross receipts may be taken for any unpaid balance due as the time of repossession. Such a deduction shall be allowed upon resale, if the resale price is less than the unpaid balance.
Example: “A” sells personal property to “B” for $10,000.00 under a conditional agreement of sale. “B” makes several installment payments to “A” totaling $6,000.00. “B” subsequently defaults and the property is repossessed by “A.” “A” is required to report gross receipts of $10,000.00. He may not deduct from gross receipts the unpaid balance of $4,000.00 due from “B” at the time of repossession. If the property repossessed by “A” is subsequently sold, the receipts from the sale thereof are to be reported only to the extent which the amount of the sale exceeds the unpaid balance of $4,000.00. Thus, if the repossessed property is sold for $5,000.00, “A” is required to report only $1,000.00 as additional receipts; if the property is sold for $3,000.00, “A” is required to report any portion of such receipts and is entitled to $1,000.00 deduction from his current year’s gross receipts.
I. Exchanges Between Dealers in Similar Lines.
Unless boot exceeds $2,000.00 per transaction then only the boot on $2,000.00.
(1) Where the dealers engaged in similar lines of business exchange articles of tangible personal property and one of them makes payment to the other in addition to the property exchanged by him, the transactions constitute sales to each other. The receipt of each dealer is measured by the gross value of the consideration received by him. Where a dealer transfers property, such as an automobile, to another dealer with the understanding that property of identical description will be returned at a subsequent date, such transaction does not constitute a sale and the value of the property exchanged need not be included in the gross receipts of either dealer. Receipts by dealers from sales to other dealers in the same line where the dealer transfers title or possession at the same price for which he acquired the merchandise may be excluded from gross receipts.
J. Consignment Transactions.
(1) The tax status of a person accounting for receipts from consignment transactions will depend on the terms and conditions expressly set forth in the form of the relationship between the parties shall be the determining factor. Where the contract does not clearly set forth the status of the parties thereto, the following principals shall apply:
(a) Township of Loyalsock Consignor. If a person located in the Township of Loyalsock ships goods on consignment to a person located outside the Township for subsequent sale by such consignee, the consignor is not deemed to be doing business at the location of the consignee, nor will such location be recognized as a branch of the consignor. When the consignee makes a sale of the consignor’s goods, the consignee will be deemed to have purchased the goods from the consignor at such time for resale to the consignee’s customer. Such transactions are deemed to result in either wholly taxable or wholly excludable receipts to the consignor at the time the consignee consummates the sale with the consignee’s customer. If the consignee is located within Pennsylvania, the receipts will be considered wholly taxable or excludable, according to Section 5 of these Regulations, as if the consignee is considered the buyer.
(b) Out of Township Consignor. If a person located outside the Township of Loyalsock ships goods on consignment to a person located in the Township for subsequent sale by such consignee, the consignor will be deemed to have sold the goods to the consignee at the time the consignee sells the goods to his (the consignee’s) customer. Such transactions are deemed to result in wither wholly taxable or wholly excludable receipts to the consignor, depending upon the location of such consignor. If the consignor is located within Pennsylvania, the receipts will be considered wholly taxable receipts; if the consignor is located outside Pennsylvania, the receipts will be considered wholly excludable receipts.
K. Leased Departments.
(1) Return by Lessor. Where a person leases a department of his business to another, such person may include in his return the gross receipts from business done and sales made by the lessee. When the business of such leased department is included in the return made by the lessor, a schedule must be attached to the return containing the name of the lessee, and description of the department operated, and a statement verifying that the lessor assumes liability for reporting the gross receipts and paying the tax accruing against the lessee of such department. The lessee, however, is not relieved from his liability for the tax if the lessor fails to make a proper return or fails to pay the tax due. Should a change occur in the ownership or status of any leased department, the lessor shall notify the Tax Administrator within fifteen (15) days.
(2) Return by Lessee. If the lessee wishes to file returns independently, such lessee is required to include in his return the entire gross receipts of said lessee, whether collected by the lessor or the lessee, without deducting any expenses or commissions charged to him by the lessor. To expedite the examination of returns filed by such lessee, the Tax Administrator may require the lessor to furnish a statement of the entire gross receipts collected on behalf of the lessee.
L. Persons Erecting Buildings or Otherwise Altering, Repairing or Improving Real Property.
(1) General. A contractor or subcontractor, resident or nonresident, engaged in the Township of Loyalsock in the business of erecting buildings or otherwise altering, repairing or improving real property, is required to report, as gross receipts, all receipts derived from the performance of such contracts. Contractors may exclude from gross receipts the amounts of subcontract let as part of the general contract provided a written list detailing the number and amount of such subcontracts and the names and complete mailing address of the subcontractors are furnished to the Tax Administrator. The amount of receipts to be included in the tax base shall be the contract price, that is, the total amount received or receivable by way of a fixed or determinable amount under the terms of the contract. The contract price will be considered to include all charges made by a contractor or subcontractor for materials, labor or other obligations for which the contractor becomes liable in the performance of the contract. No deduction may be made with respect to amounts paid to materialmen.
(2) Cost-Plus Contracts. A general contractor performing contracts on the basis of “cost-plus-a-fixed-fee” or “cost-plus-a-percentage” is required to report, as gross receipts, the full contract price, as explained above, unless he has no connection whatsoever with the purchase of material and/or the hiring of labor. In cases where the owner of the property buys the materials and hires all labor in his own name and pays the general contractor a fixed fee or a percentage of the total cost to supervise and direct the construction project, the general contractor will be required to report only the gross amount of the fee or percentage received, Where the owner authorizes the general contractor to make for him such purchases of tangible personal property, or hire such labor or engage such subcontractors as are necessary for the performance of the contract and (1) pledges his credit and is liable in the first instance to the materialmen, suppliers, laborers or subcontractors, as distinguished from merely guaranteeing payment to them or undertaking to reimburse the general contractor for the cost of such materials, services or subcontractors, and (2) agrees to make payment directly to the materialmen, supplies, laborers or subcontractors, such sales or services will be regarded as made directly to the owner, and the general contractor will not be required to include such items in his gross receipts.
(3) Government Contracts. Receipts from the performance of contracts entered into with the Township of Loyalsock of the Commonwealth of Pennsylvania, or the United States of America or any subdivision or such governments are to be included in the measure of the tax.
M. Contractors Who Repair, Alter and Improve Tangible Personal Property.
(1) Persons engaged in business in the Township of Loyalsock as contractors who repair, alter and improve tangible personal property for the account of others are subject to tax under the provisions of the Business Privilege Tax Resolution. When contractors perform labor or services on articles of tangible personal property furnished by the other party to the contract, such contractors are required to report only the amount due them for labor or services rendered.
N. Buildings, Hotels, Motels, Apartment Houses, Boarding Houses, Nursing Homes, Etc.
(1) Persons operating hotels, motels, apartment houses, boarding houses, nursing homes, rooming houses, bed and breakfast establishments and all other such businesses are taxable on receipts from renting of rooms, furnishing of meals and any other services rendered.
(2) Depreciation, Maintenance, Etc. Any person carrying on the business of renting buildings, apartments, office, space, stores, rooms, dwelling houses, etc., shall include gross rentals received in the tax base. No deductions may be made for depreciation, cost of maintenance, repairs, etc.
(3) Non-Profit Corporations and Associations. Persons operating private hospitals, nursing homes and sanitariums are subject to the tax. The law exempts such institutions only when they are operated by a non-profit corporation or association organized for religious, charitable or educational purposes, as set forth in Section 14 of these Regulations.
(4) Pennsylvania Room Occupancy Tax. (See Section 14C of these Regulations.)
O. Insurance Agents, Brokers and Underwriters.
(1) General Agents. General agents for insurance companies are required to report, as gross receipts, the entire commissions received as compensation for their own efforts on policies sold by them directly and the overriding commissions received by them upon business produced by brokers or subagents.
(2) Brokers and Subagents. Brokers or subagents are required to report, as gross receipts, the commissions received as compensation for their services.
(3) Employee of Single Company. A person who represents a single company is subject to tax hereunder unless he:
(a) devotes his entire time to the company.
(b) is considered by the company to be its employee and the company pays Social Security and Unemployment Compensation taxes on behalf of the person claiming the exemption and in the event of an accident during the course of employment, said person is entitled to Worker’s Compensation benefits, and
(c) does not employ solicitors, subagents or other persons to whom he pays salaries, commissions or other compensation in connection with insurance business solicited.
P. Undertakers, Morticians, and Funeral Directors.
(1) Persons engaged in business as undertakers, morticians or funeral directors are required to report, as gross receipts, the total charges made to clients, without deducting therefrom any costs or expenses whatsoever. Both the sale of tangible personal property and charges for rendering service must be included in the tax base.
Q. Sale of Capital Assets.
(1) Generally. The profits (not gross proceeds) resulting from the sale of capital assets, such as plant machinery and equipment, furniture, fixtures, delivery equipment, etc., are to be included in the tax base. If a loss is sustained on such sales, it may not be offset against gross receipts from other sources. In computing the profits to be included in the tax base, the cost of the asset, less allowable depreciation, is to be deducted from the gross proceeds of the sale.
(2) Asset Located Outside the Township of Loyalsock. Where the capital asset sold was located at an established place of business of the taxpayer outside the Township of Loyalsock, the profit realized on the sale thereof may be excluded from the tax base.
(3) Bulk Sale or Exchange Merger. Where a corporation realizes a gain as the result of a sale or exchange of substantially all of its assets, or as the result of a merger or consolidation with another corporation, the amount of such gain must be included in the tax base.
R. Deposit on Container.
(1) A person making sales of products in a container on which there is a deposit to insure the return of the container is required to report only the gross selling price of the product in the container.
S. Vending Machines.
(1) The entire gross receipts of vending machines and other mechanical devices which dispense goods, wares and merchandise of render a service are to be included in the gross volume of business of the owner or lessor thereof. No deductions may be made therefrom for splits, rentals, commissions or other renumerations to persons in charge of the machines and/or to the lessees of the premises upon which the machines are located.
T. Inter-Company Transactions.
(1) Receipts from transactions between affiliated companies, other than those of a purely accommodational nature, are subject to inclusion in the gross volume of business.
U. Inter-Department Transaction.
(1) Where one department, branch or division of a corporation or other business entity furnishes goods, wares and merchandise or services to another department, branch or division of the sale corporation or business entity, the amount recorded on the books to reflect such inter-departmental transactions shall not be included in the gross volume of business of the taxpayer.
V. Property Trade-In.
(1) In the case of trade-in transactions in which goods, wares and merchandise are sold and allowances made for other property which is traded in and is accepted by the vendor or dealer in part payment of the property sold, the allowance made for the property traded in shall not be deducted from the selling price of the property sold in computing the gross receipts upon which the tax is based. The vendor or dealer must include in his gross volume of business the full selling price of the property sold without any deduction therefrom for any allowance made or property traded in. Where the property traded is subsequently sold by the vendor or dealer, the latter must include in his gross receipts only the amount by which the sale price of the property exceeds the trade-in allowance.
W. Refunds, Credits or Allowances. Refunds, credits or allowances given by the seller to a purchaser on account of defects in goods, wares or merchandise sold or on account of goods, wares or merchandise returned may be excluded from gross receipts in determining the gross volume of business subject to the tax.
X. Commissions Paid by Broker. Any broker, agent or salesman who splits or otherwise divides a commission with another broker, agent or salesman in the same type of business by reason of the fact that the second broker initiated, executed, cleared or completed a portion of the transaction for which the fee is paid shall be permitted to exclude from his gross receipts that portion of the fee paid to the broker, agent or salesman. This Section does not exempt so-called finders fees, kick-backs, commissions or other renumeration paid by a broker, agent or salesman to another individual not in the sale type of business as the broker, agent or salesman, nor does this Section exempt from the gross receipts of a broker or agent a commission paid by said broker or agent to a salesman affiliated with him.
Y. Bad Debts. Bad debts arising from transactions subject to the tax may be excluded from the gross volume of business where the deduction is also taken in the same year by the taxpayer of Federal Income Tax purposes.
Z. Taxes Collected as Agent for the United States of America, Commonwealth of Pennsylvania or the Township of Loyalsock. Taxes collected as agent for the United States of America, the Commonwealth of Pennsylvania or Township of Loyalsock, are excludable from taxable receipts.
16. Partial Exemption/Exclusion. (See appropriate section of Resolution.)
17. When Same Tax is Imposed by Two Taxing Bodies. (See appropriate section of Resolution.)
18. Records. (See appropriate section of Resolution.)
19. Returns. Returns for both the Loyalsock Township Business Privilege Tax and the Loyalsock Township School District Business Privilege Tax shall be made on a common form.
(A) Return Forms. Forms may be obtained from the Tax Office of Loyalsock Township School District. Failure to receive the forms will not excuse the taxpayer for failure to file a return.
(B) Who Must File a Return? Every individual, partnership, limited partnership, association and corporation and every receiver, trustee, assignee or other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, and any combination of persons carrying on or exercising for gain or profit any trade, business, profession, vocation or commercial activity in the Township of Loyalsock must file a return.
(C) Partnerships. A partnership is considered to be a taxable entity. The respective partners are not required to file separate returns as individuals but they are jointly and severally liable for payment of the tax due.
(D) Signature. If the taxpayer is an individual or sole proprietor, he shall sign the return. If the taxpayer is a partnership, the return shall be signed by at least one of the general partners. If the taxpayer is a corporation, the return shall be signed by an officer of the corporation.
(E) Multiple Places of Business. If a taxpayer maintains more than one place of business in the Township of Loyalsock, he is required to file only one return and may include therein the receipts from transactions occurring in all of his places of business in the Township.
(F) Lessors and Lessees of Departments Within Other Business. (See Section 15K of these Regulations.)
(G) Time and Place of Filing. (See appropriate section of Resolution.)
(H) Payment of Tax and Penalties for Late Payment. (See appropriate section of Resolution.)
(I) Refund. Any tax payment made under protest, which the Tax Administrator or a court of competent jurisdiction thereafter determines to have been improperly paid, shall be refunded to the taxpayer. Total amounts of less that one dollar ($1.00) will be refunded only upon written request of the taxpayer, accompanied by a stamped, self-addressed envelope.
20. License. (See appropriate section of Resolution.)
(A) To Whom License Applies. (See appropriate section of Resolution.) 21. Posting License.
(1) Generally. The license shall be posted conspicuously at the place of business of the
licensee at all times.
(2) Vending Machine Owners. Persons who sell goods, wares or merchandise or render services by means of vending machines located within the Township of Loyalsock shall procure one license covering all of their vending machines and shall post such license at their principal place of business.
(3) Persons With no Place of Business in the Township of Loyalsock. Persons conducting business within the Township of Loyalsock but having no place of business in the Township shall not be required to post their licenses. Such persons shall maintain their license on file at their principal place of business. If such licensee subsequently establishes a place of business within the Township of Loyalsock, he shall notify the Tax Administrator within fifteen (15) days of the location of such place of business and shall thereafter post his license at that place of business.
(4) Contractors. Contractors, regardless of the number of field offices maintained within the Township of Loyalsock, shall be considered to have one place of business for the purposes of licensing.
(5) Lessors of Real Property. Persons conducting business within the Township of Loyalsock who own and hold title to real property which is leased to others shall not be required to post their license in the rental unit. Such persons shall maintain their license on file at their principal place of business.
21. Penalty. (See appropriate section of Resolution.)
22. Continuing Offense. (See appropriate section of Resolution.)
23. Powers and Duties of the Tax Administrator. (See appropriate section of Resolution.)
24. Confidential Nature of Returns, Etc. (See appropriate section of Resolution.)
25. Suit on Collection and Penalty. (See appropriate section of Resolution.)
26. Requests for Ruling. Any taxpayer desiring a specific ruling concerning the interpretation or application of any provision of the Business Privilege Tax Resolution or these Rules and Regulations shall submit all pertinent facts, in writing, to the Tax Administrator, who shall issue a written ruling.