Reminder: YATB will no longer be mailing Individual EIT Local Tax Forms
Reminder: YATB will no longer be mailing Individual EIT Local Tax Forms
Local Services Tax (formerly known as Occupational Privilege Tax) is a tax levied on the privilege of engaging in an occupation within a particular taxing district. In 2004, Act 222 amended the Local Tax Enabling Act ("Act") to change the name of the occupational privilege tax to the emergency and municipal services tax ("EMST"), which allowed municipalities and school districts to impose a maximum of $52 EMST per year beginning on or after January 1, 2005.
In 2007, Act 7 amended the Act to change the name of EMST to the Local Services Tax.
Local Services Tax is collected by the subdivision where you work, regardless of where you live. The standard maximum annual rate is $52 per person.
If both a municipality and a school district levy the tax, they must share the $52 maximum. For tax rates exceeding $10, the amount must be collected in pro rata installments based on payroll period withholding.
Under Act 47, municipalities that are declared "distressed" may petition to increase the rate up to $156 per year.
Employers with work sites within the jurisdiction must deduct LST from employees at that site. Employers are required to remit the collected tax within thirty (30) days after the end of each calendar quarter.
To legally require withholding, a taxing district must be listed on the official Register for Local Services Taxes.
An employer must stop withholding for employees who provide a valid exemption form, but must "re-start" if the employee's earnings exceed $12,000 in that calendar year.
Income Exemptions
Jurisdictions with a tax higher than $10 must exempt individuals earning less than $12,000 annually. Employees who expect to earn less than $12,000 may file an annual exemption form to prevent tax withholding.
Military Exemptions
Exemptions are provided for active-duty reserve members and honorably discharged veterans who are 100% disabled due to service-connected injuries.
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