It could become costlier to work in Hatboro if the governing body moves forward with implementing an annual Local Services Tax.
The tax, which can be levied at up to $52 per year for those employed within the borough, would replace the existing $10 Occupational Privilege Tax, Hatboro Council President John Zygmont said.
“It’s where you work,” Zygmont said of who would be responsible for paying the tax. “It was put in that way so that towns, employment centers …. had a source of revenue … as opposed to passing on all of our municipal costs.”
Zygmont said he is awaiting information from Berkheimer Tax Administrator to determine the amount of revenue that could be realized with the higher wage tax, as well as how many Hatboro residents versus non-residents would be impacted. Zygmont told Patch that he expects to have that data in time for the council’s Oct. 8 committee meeting.
If enacted, he said the council would need to take action at the Oct. 22 meeting so it could be put in place for January, when the tax would begin to be deducted. Zygmont said the tax would be deducted throughout the course of the year. For weekly employees at $1 per week and $2 per week for those paid bi-weekly.
Horsham Township Manager Bill Walker said Horsham switched from the $10 Occupational Privilege Tax to a $52 Local Services Tax about two years ago. He said the extra $42 generated per every one of the 30,000 to 35,000 Horsham employees was a "help" in building up the township's capital improvement account and allowing the municipality to have a surplus.
Previously called the Emergency and Municipal Service Tax, the Local Services Tax is deducted at the beginning of each year from the paychecks of workers with annual incomes above $12,000.
The state mandates that 25 percent of the revenues generated from the levy be used toward emergency services. In addition, “municipalities, but not school districts, are specifically permitted to use (Local Services Tax) revenues to reduce property taxes through a homestead or farmstead exclusion,” according to the state’s Web site.
Towns that enact a homestead or farmstead exclusion are required to put an ordinance in place prior to December 1 in order for it to take effect the following year.