NORTH PENN SCHOOL DISTRICT TAX INFORMATION

Pennsylvania's system of property tax collection utilizes elected Tax Collectors to act as the receiving agent for the various taxing entities. These entities include the Local Municipality (Hatfield Borough), the County Government (Montgomery), and the School District (North Penn). Each entity has its own Property Tax rate, known as "Millage", that is set year to year. The Borough of Hatfield has a (1/2%) local earned income tax, which is collected by Berkheimer Associates and not the local Tax Collector.  Residents also have a (1/2%) local earned income tax collected by Berkheimer Associates for the North Penn School District.  Property assessments are set by the Montgomery County Board of Assessments, and not by the Borough.

The County/Borough tax bill will be mailed on or before March 1st, 2012.

 The North Penn School District Real Estate Tax bill will be mailed on or before July 1st, 2012.

 If you have a question regarding your property in Hatfield Borough or require a Tax Certification, please provide your tax parcel id number that begins with "09".  This is the 12 digit number found on the top right hand corner of your tax bill.  Please leave a message then fax your request to 215-855-2075, attention Nancy DeFinis.  The certification fee is $30 and should be made payable to Nancy DeFinis.  Your certification will be faxed back upon receipt of payment.  Should you require an original certification, include with your payment a self addressed stamped envelope.  If you are calling regarding delinquent taxes for 2010, please contact XSPAND at 866-267-4811.

2012 Borough/County Real Estate Tax

Payments by Mail:

Nancy DeFinis
Hatfield Borough Tax Collector
PO Box 190
Hatfield, PA 19440

Phone:  215-855-0781 ext. 7
Fax:      215-855-2075

Payments in Person:

Hatfield Borough office Conference Room (401) South Main Street)

April 4, 2012                                           (11:00 am to 2:00 pm)     

April 18th, 19th, 20th, 23rd, 24th & 25th   (10:00 am to 4:30pm)

                       (closed from 12:00 pm to 1:00 pm)

Last collection date June 29, 2012             (11:00 am to 2:00 pm)

Borough Office Closed Friday April 6, 2012

Checks should be made out to "Nancy DeFinis Tax Collector"

 **Please note that no personal checks will be accepted after December 15** CASH, CERTIFIED CHECK OR MONEY ORDER ONLY!

(Special needs call for an appointment)
For appointments and/or information, contact Tax Collector at 215-855-0781 ext. 7

SCHEDULE OF BILLS AND DUE DATES FOR TAXES:

• County and Borough tax mailed March 1.
• 2% discount is given if paid by April 30.
• Face rate if paid by June 30.
• 10% penalty thereafter June 30.

County and Borough taxes are based on the calendar year.

• School tax mailed July 1.
• 2% discount is given if paid by August 31.
• Face rate if paid by October 31.
• 10 % penalty thereafter October 31.
• Only cash, certified check or money orders will be accepted after December 15th.
         -No personal checks accepted after that date.

School taxes are based on the fiscal year.

HATFIELD BOROUGH TAX RATES

2012 Real Estate Tax Rates:

• Borough.......................... 1.00 mills
  (Borough Fund- 0.7976   ~   Fire Protection Fund - 0.2024)
• Montgomery County.......... 2.6950 mills
• North Penn School District... 21.9564 mills
• Real Estate Transfer........... 1 percent

Delinquent Real Estate Tax Collector

• XSPAND

Phone:  1-866-267-4811

From the Desk of Nancy DeFinis:

Thank you for a wonderful 2011. I look forward to working with you in 2012. The County Borough tax bill will be mailed as of March 1, 2012. If you have any questions regarding delinquent tax payments, please contact the Montgomery County Tax Claim Bureau at 610-278-1216 in mid February.

With respect to your tax bill you will receive a 2% discount on your payment if your taxes are paid by April 30, 2012. The Face payment period is until June 30, 2012. After June 30, 2012 you will pay a 10% penalty if your taxes remain unpaid.

It is my pleasure serving the residents of Hatfield Borough.

Respectfully, Nancy DeFinis               

Senator Stewart Greenleaf, 12th District 711 North York Road, Suite 1 Willow Grove, PA  19090-2124 215-657-7700, 800-924-3300 sgreenleaf@pasen.gov www.senatorgreenleaf.com

Robert W. Godshall, State Rep. 53rd District 1702 Cowpath Road Hatfield, PA  19440-3106 215-368-3500 rgodshall@pahousegop.com www.bobgodshall.com

Local Earned Income Tax

Hatfield Borough

• Earned Income Tax............ 1/2 of 1 percent
• Name: Berkheimer Assoc
  Phone: 215-257-4190, 1-800-360-8989
  Address: 1028 Ridge Road, Sellersville, PA
  
  

North Penn School District

• Earned Income Tax............ 1/2 of 1 percent
• Name: Berkheimer Assoc
  Phone: 215-257-4190,  1-800-360-8989
  Address: 1028 Ridge Road
  Sellersville, PA
  
  *Please do not submit your income tax bills to Hatfield Borough.

EARNED INCOME TAX

1. The tax is imposed on all income or net profits earned by residents of the District, regardless of the place where the income is earned.
2. Where the municipality levies the tax, the tax is also imposed on all earned income and net profits earned by all non-residents employed in the municipality.
3. Earning of Employees. Salaries, wages, commissions and other compensation as imposed by the resolution or ordinance have the following meaning.
   1. COMPENSATION is taxable whether received or constructively received directly or through an agent, whether received in cash or in property, and generally is identical with similar definitions in the United States Internal Revenue Code. NON-CASH FRINGE BENEFITS are considered to be taxable for federal income tax purposes. Employers and employees must report the fair market value of non-cash fringe benefits, such as company cars in a manner similar to the federal tax administration rules established by the IRS, which may be used to determine the value for withholding and payment.
   2. DRAWING ACCOUNTS AND SIMILAR ADVANCES to salesmen and other employees shall be taxed on the same basis as reportable for Federal Income Tax purposes.
   3. DISTRIBUTIONS FROM PROFIT SHARING PLANS made prior to retirement would constitute earned income and are considered taxable.
   4. Other compensation shall include, bonuses, incentive payments, tips, fees, non-cash fringe benefits, and similar earned income.
   5. Vacation, holiday and separation payments, taxes assumed by the employer, and similar compensation are taxable on the same basis as reportable for Federal Income Tax purposes.
   6. All employees are presumed to be on a cash basis and taxed accordingly.
   7. Housing allowances constitute part of a salary and/or other compensation received by a person for services rendered and are subject to the earned income tax.
4. Employee deductions for normal and necessary expenses directly connected with employment. Where employees incur and pay normal and necessary expenses directly connected with the performance of their duties or services, such expenses may be deducted in computing taxable earned income, provided:
   1. No reimbursement or partial reimbursement is made by the employer.
   2. The expenses are actually incurred and are reasonable.
   3. The expenses are recognized as deductions by the Commonwealth authorities for income tax purposes on the UE Form (Employee Business Expenses). Illustrations of expenses which may be deducted are
      1. Travel expenses while away at least overnight from the municipality of regular employment on business for the employer. These include the cost of commercial transportation, meals, lodging, tips, business telephone calls and automobile expenses.
      2. Education expenses are deductible if the education which is undertaken (a) maintains or improves a skill required of the individual in his employment or other trade or business, or (b) meets the express requirements of law or regulations, imposed as a condition to the retention by the individual of an established employment relationship, status, or rate of compensation. HOWEVER, EXPENSES FOR EDUCATION WHICH ARE OF A PERSONAL OR SELF-IMPROVEMENT NATURE ARE NOT DEDUCTIBLE EVEN THOUGH THEY MAINTAIN OR IMPROVE
   4. SKILLS RELATED TO THE INDIVIDUAL'S PRESENT EMPLOYMENT OR QUALIFY THE INDIVIDUAL FOR A NEW TRADE OR BUSINESS.
5. Federal deductible retirement plans. The federal income tax deduction permissible for payments to qualified retirement plans (Keogh, IRA, Section 403 (b) or Section 401 (k) are NOT permitted as a deduction for the district's earned income tax. PA Act 511 specifically excludes retirement income from taxation; therefore, a deduction for payments to a retirement plan are NOT permissible.
6. Person and Activities subject to tax on net profits.
   1. PERSONS.
      1. INDIVIDUALS ENGAGED in a business, trade, profession or other activity, either as a proprietor or partner, carried on for profit, shall pay a tax on the net profits received.
      2. PARTNERSHIP, joint ventures and other similar associations that file Federal Income Tax returns on the same basis as partnerships, are not subject to the tax as such, and accordingly are not required to file Net Profit returns. THE TAX IS LEVIED ON THE PARTNERS AS INDIVIDUALS, WHO WILL INCLUDE THEIR SHARE OF THE PARTNERSHIP INCOME IN THEIR INDIVIDUAL RETURNS. Salaries paid to the partners and treated as such on the partnership Federal Income Tax return are treated as a share partnership income for the purpose of this tax.
   2. ACTIVITIES.
      1. RENTAL INCOME. Rental income is taxable when construed to be "earned income" and non-taxable when considered to be "unearned income." Rental income received from the operation of real estate by persons, trust companies or real estate agents, acting for or on behalf of persons or estates, is considered earned income, if the owner, either himself or through agents or servants, actively manages and supervises the real estate by providing labor and services in connection therewith. "Labor" is intended to apply to janitors, or supervisory service, whether performed by the owner, his agents or employees.
         "Service" shall include elevator, heat, light, power, and the like.
         GENERAL RULE: If a business derives net profits in the nature of rental receipts, the net profits are taxable, City of Philadelphia Tax Review Board vs. Adams Avenue Associates, 25 Pennsylvania Commonwealth Court 379, 360 A.2d. 817. The Commonwealth Court held in Oseroff vs. The City of Pittsburgh,
         70 Pennsylvania Commonwealth Court 294, 453 A.2d 40 (1982), under the authority granted, liability for rent receipts existed even though the purpose of purchasing the property was not primarily income producing. Rental receipts are considered income for local taxing purposes. Rent income from apartments, hotels, hotel buildings, office buildings, and similar structures is presumed to be earned income.
         WHEN RENTAL INCOME DOES NOT FIT THE DESCRIPTION OF EARNED INCOME, IT IS UNEARNED INCOME. THE MANNER OF ACQUISITION OF THE PROPERTY IS IMMATERIAL IN DETERMINING WHETHER THE RENTS ARE EARNED OR UNEARNED.
         In determining whether rent income is "earned income," the determination will not be limited to the characteristics shown above. Berkheimer reserves the right to make a determination in each case, based on the facts. Rents subject to the tax are the "net rents." That is, deductions are permitted for depreciation, repairs, and maintenance and all other expenses allowable as deductions to arrive at net rental income for Federal Income Tax purposes.
      2. MONEY MAKING SIDELINES - HOBBY OR BUSINESS? Expenses from moneymaking sidelines or extra income avocations, such as handicrafts, antiques, farming, photography, and so on, are deductible from other sources of taxable income ONLY when the activity is operated as a business. In order for an individual to substantiate that his activities are performed for income purposes instead of for pleasure, The ACTIVITY MUST SHOW A PROFIT, ONE OUT OF EACH THREE YEARS. Note: See Section K of Article Two.
7. Royalties.
   Income received as royalty is taxable whether the income consists of monies received by the owner of a patent or private formula for the use of it, or the right to act under it, or by the author of a book, but does not include royalties received by reason of ownership of a mine, well, or similar property.
8. Persons engaged in professions.
   Where an individual is self-employed in the conduct of a profession, his income is subject to the net profits tax. Where this individual, in addition to his self-employment, is also employed on a fixed salary by an institution, such compensation is also subject to the tax.
9. Securities.
   Where a person engages in the buying and selling of stocks, bonds, and other types of securities, and such transactions are not isolated, but are extended so as to constitute an activity, business, or earned income, the net profits are subject to the tax.
10. Independent Contractors.
    An independent contractor for purposes of the ordinance will file returns and be bound by the regulations and sections of the ordinance applicable to net profit taxpayers.
11. Computation of Net Profits.
    The net profits of a business, trade, profession or other activity shall be computed on the same basis as for state income tax purposes. Generally, the net income to be reported shall be identical with that reported to the Pennsylvania Personal Income Tax. The "INVESTMENT CREDIT' allowable for Federal Income Tax purposes in NOT DEDUCTIBLE for the district earned income tax nor is the deduction permissible for self-employed KEOUGH PLANS as allowed for Federal Income Tax purposes.
12. Offsetting Losses Against Gains.
    1. The net profits of the business are to be determined with reference only to the gross income and expenses of each specific business, without combining the income of one enterprise with the expenses of another to determine the gross income of business.
       Persons owning two (2) or more businesses may not offset a loss of one separate business against the profit earned in another. If you experience a net loss, you must enter a zero (0) in the appropriate line of the Final Earned Income Tax Return.
    2. The business losses suffered by a taxpayer may be deducted against the total earned income (salary and wages) in computing local income tax liability. Accordingly, an individual is permitted to offset losses in a business against wages or salary.
13. Sub-Chapter S Income. The pass through income from an S Corporation to an individual shareholder is not taxable. The compensation paid by an S Corporation to an individual shareholder for services rendered to the corporation is taxable.
    The losses incurred by an S Corporation cannot be offset against gains or wages.
14. Taxable Gains from the Sale of Business Property.
    The gain shall be reported for earned income tax purposes in the year of sale to the extent that they were created by depreciation deductions (tax benefit) previously deducted to determine net profits.
15. Limited Partnership.
    The net profits of a limited partnership shall not be included in the computation base, where the shareholders interest are not sufficient to establish demonstrate control of the entity.
16. Cafeteria Style Compensation Programs.
    Compensation for local tax purposes includes amounts which are constructively received. Therefore, if an employee has the option to direct his compensation be paid or to ensure to his benefit in the form of "fringe benefits," such amounts are includable on taxable income. Where an employee directs the employer to make payments from his earnings on his benefit to the following, such amounts are subject to tax:
    1. Bank or thrift institutions
    2. Contributions to group insurance plans for "extra" coverage
    3. Credit unions
    4. Deferred compensation programs
    5. Other payments for life, auto, health and/or home insurance
    6. Savings bonds programs and other similar payments
    7. United Way or other charitable contributions
    8. Other

EXCLUSIONS FROM TAXABLE INCOME

1. Sick or Disability Benefits
   Periodic payments received by an individual UNDER A SICKNESS DISABILITY INSURANCE PLAN are not taxable. Where, however, an employee received regular salary from his employer during a period of sickness or disability, by virtue of his contract of employment, such compensation shall be fully taxed.
2. Military Service Pay.
   Compensation paid by the United States to any person for active duty service in the armed forces, in not taxable. The compensation paid to military reservists while on temporary duty, shall be considered as income earned.
3. Death Benefits and Proceeds of Life Insurance Policies.
   Death benefit payments by an employer to the beneficiary of an employee or to his estate are not taxable. Proceeds of life insurance policies payable by reason of the death of an insured to his estate or to a beneficiary are not taxable.
4. Gifts and Bequests
   Cash or property received as a gift or under a will or under statutes of descent and distribution is not taxable.
5. Religious Offerings.
   Goodwill offerings made to the clergymen by individuals for the performance of baptisms, wedding ceremonies, and similar religious ceremonies and fees for services are considered earned income and are taxable.
6. Board and lodging to employees for convenience of employer.
   The value of meals and lodging furnished to domestic or other employees by the employer for the employer's convenience is not considered earned income and is not taxable. Where, however, board and lodging is provided by the employer and the employee is not required to reside on the premises by his employer, the fair market value of the board or lodging shall be included in the employee's earnings. In any event, the interpretation of this paragraph shall be construed in accordance with similar provisions of the Pennsylvania Personal Income Tax Code.
7. Supplemental unemployment benefits, commonly referred to as "sub-pay" or subsistence pay, paid by an employer to an employee in accordance with a plan or contract, taxable for Federal Income Tax purposes but not reportable on Federal Form W-2 is considered "unearned income' and is not subject to the tax.

ADDITIONAL INFORMATION

1. "Association" A partnership, limited partnership, or any other unincorporated group of two or more persons.
2. "Business" An enterprise, activity, profession or any other undertaking of an unincorporated nature conducted for profit or ordinarily conducted for profit whether by a person, partnership, associations, or any other entity.
3. "Corporation" A corporation of joint stock association organized under the laws of the United States, the commonwealth of Pennsylvania, or any other state, territory, foreign country or dependency.
4. "Domicile" The place where one lives and has his permanent home and to which has the intention of returning whenever he is absent. Actual residence is not necessarily domicile, for domicile is the fixed place of abode which, in the intention of the taxpayer, is permanent rather than transitory. Domicile is the voluntary fixed place of habitation of a person, not for a mere special or limited purpose, but with the present intention of making a permanent home, until some event occurs to induce him to adopt some other permanent home. In the case of businesses, or associations, the domicile is that place considered as the center of business affairs and the place where its functions are discharged.
5. "Earned Income" Salaries, wages, commissions, bonuses, incentive payments, fees, tips and other compensation received by a person or his personal representative for services rendered, whether directly or through an agent, and whether in case or in property; not including, however, wages or compensation paid to persons on active military service, disability or retirement or payment arising under Workmen's Compensation Acts, Occupational Disease Acts and similar legislation, or payments commonly recognized as old age benefits, retirement pay or pensions paid to persons retired from service after reaching a specific age or after a stated period of employment or payments commonly known as public assistance, or unemployment compensation payments made by any governmental agency or payments to reimburse expenses or payments made by employers or labor unions for wage and salary supplemental programs, including, but not limited to, programs covering hospitalization, sickness, disability or death, supplemental unemployment benefits, strike benefits, Social Security and retirement.
6. "Employer" A person, partnership, association, corporation, institution, governmental body, unit or agency, or any other entity employing one or more persons for a salary, wage, commission or other compensation.
7. "Employee" Any person who renders service to another for a financial consideration or its equivalent, and who is under the control and direction of the employer. It is immaterial that the service rendered is temporary, part-time, or seasonal. In general, an "employee" is one who corresponds to the definition used to Federal payroll tax purposes and as such is subject to the Federal payroll tax laws.
8. "Net Profits" The net income from the operation of a business, profession, or other activity, except corporation, after provision for all costs and expenses incurred in the conduct thereof, determined either on a cash or accrual basis in accordance with the accounting system used in such business, profession, or other activity but without deduction of taxes based on income.
9. "Independent Contractor" Any person, who while performing service for another, if not under the direction and control of such person so as to be classified as an "employee." In general, an "independent contractor" is one who corresponds to the definition used for federal payroll tax purposes, and as such is not subject to the federal payroll tax laws.
10. "Non-resident" A person, partnership, association or other entity domiciled outside the taxing district."
11. "Resident" A person, partnership, association or other entity domiciled in the taxing district. The person is considered to be a resident for tax purposes if he maintains a place or abode in the municipality and spends an aggregate of more than 183 days of the taxable year in the municipality or if he is domiciled within the municipality, had no other permanent place of abode in Pennsylvania where he pays a similar tax.
12. "Salaries, wages, commissions, and other compensation." Include bonuses, incentive payments, fees, tips and all similar income or compensation received for services rendered that may accrue or be received by an individual for services rendered, directly or through an agent, and whether in cash or property.
13. "Taxpayer" A person, partnership, association, or any other entity, required hereunder to file a return of earned income or net profits, or to pay a tax thereon.
14. "BERKHEIMER" , acting as the duly appointed Income Tax Officer, Collector or Administrator in the taxing district.