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VILLAGE OF MALTA INCOME TAX RULES AND REGULATIONS (Page 4) |
ARTICLE IV: EFFECTIVE PERIOD OF TAX
A. The tax imposed by Section 3, paragraphs A-l, and A-2 of the ordinance shall be levied, collected and paid with respect to salaries, wages, bonuses, incentive payments, commissions, fees, and other compensation earned on and after January 1, 1976.
B. The tax imposed by Section 3, paragraphs A-3, A-4 and A-5 of the ordinance, with respect to net profits of trades, businesses, professions, enterprises, undertakings and other activities is on the net profits earned on and after January 1, 1976.
ARTICLE V: RETURN AND PAYMENT OF THE TAX
A. Date and Requirement For Filing:
1. On or before April 15 of the year following the effective date of the ordinance and each year thereafter, every person subject to the provisions of Section 3, paragraphs A-1 to A-5, inclusive, of the ordinance shall, except as hereinafter provided, make and file with the Commissioner, a return on a form prescribed by and obtainable upon request from the Commissioner, whether or not a tax is due.
2. If the return is made for a fiscal year or any period less than a year, said return shall be made within three and one half (3-1/2) months from the end of each fiscal year or other period.
3. Every person subject to the provisions of Section 3 of the ordinance shall, except as hereinafter provided, file a return setting forth the aggregate amount of salaries, wages, commissions and other personal service compensation, net profits from business or other activities, including the rental from use of real and personal property, and other income taxable under the ordinance, received for the period covered by the return and such other pertinent facts and information in detail as the Commissioner may require.
4 Where an employee's entire earnings for the tax period are paid by an employer or employers, and the one (1%) percent tax thereon has in each instance been withheld and deducted by the employer or employers from the gross amount of the entire earnings of such employee-taxpayer, and where the employer of such employee has filed a return or return in which such employee's entire and only earnings are reported to the Commissioner, and where such employee has no taxable income other than such earnings and the tax so withheld has been paid to the Commissioner. The Commissioner is hereby authorized to accept such report or returns provided by the employer, unless otherwise specified, as the return required of any such employee.
5. An employee who is permitted to deduct business expenses from gross wages, salaries, or commissions must file a return in order to claim such deductions even though all or part of such wages, salaries, or commissions are subject to withholding.
6. Any taxpayer who received taxable income not subject to withholding tinder the ordinance must file a return.
7. Any taxpayer having income, wages, or other compensation for which a return must be filed, and also having net profits from a business covering the same or a different period, is required to file only one return.
8. Trustees of active trusts are required to file returns and pay the tax on the taxable income thereof.
9. Except as provided for herein, the tax is on the partnership or association as an entity whether resident or non-resident and a return is required disclosing the net profits allocable to this municipality and the tax paid thereon. However, any resident partner or resident member of the unincorporated entity is required to make a return and pay the tax in accordance with Article III-A-3b.2 of these regulations.
10. A husband and wife may, in any tax year, elect to file separate or joint returns.
11. Operating losses from business or professional activities, the profits of which would be taxable under the ordinance, may be offset against salaries, wages, commissions and other personal service compensation or against net profits from other business or professional activities. To the extent that such losses are offset they shall not be allowable as an operating loss carry forward under Section 3c of the ordinance or Article III-C of the regulations.
B. Information Required and Reconciliation With Federal Returns.
1. In returns filed hereunder, there shall be set forth the aggregate amount of salaries, wages, bonuses, incentive payments, commissions, fees and other compensation less reasonable allowable expenses incurred subject to the tax earned from each employer, taxable net profits and other pertinent information as the Commissioner may require.
2. Where figures of total income, total deductions, and net profits are included as shown by a federal return, any items of income as are not subject to this municipality's tax and unallowable expenses shall be eliminated in determining net income subject to this municipality's tax. In the absence of records showing the actual unallowable expenses, such expenses shall be determined in accordance with Article III A-6.c.1.08 of these regulations. The fact that nay taxpayer is not required to file a federal tax return does not relieve him from filing this municipality's tax return.
3. If a change in federal income tax liability, made by the Federal Internal Revenue Service, or by a judicial decision, results in an additional amount of tax payable to this municipality, a report of such change shall be filed by the taxpayer within three (3) months after receipt of the final notice from the Federal Internal Revenue Service or final Court decision, see Article XI-B-2.
4. If a change in federal income tax liability results in a reduction of taxes owned and paid to this municipality a claim for refund shall be filed with the Commissioner as prescribed in Section II of the ordinance and Article XI-C of these regulations.
C. Extensions.
1. Upon written request of the taxpayer made on or before the date for filing the return, and for good cause shown, or upon receipt of a copy of the Federal Internal Revenue Service extension granted the Taxpayer, the Commissioner may extend the time for filing such return for a period of not to exceed six (6) months, or to one (1) month beyond any extension requested of or granted by the Federal Internal Revenue Service. Whenever he deems such necessary, the Commissioner may require a tentative return accompanied by payment of the estimated tax. No penalty will be assessed in those cases in which the return is filed and the final tax paid within the period as extended provided all other filing and payment requirements of the ordinance have been met.
2. Information returns, schedules and statements needed to support tax returns are to be filed within the time limits set forth for filing the tax returns.
D. Payment With Return.
1. The taxpayer making a return shall, at the time of the filing thereof, pay to the Commissioner the amount of taxes shown as due thereon; provided however, that where any portion of the tax so due shall have been deducted at the source pursuant to the provisions of Section 6 of the ordinance, or where any portion of said tax shall have been paid by the taxpayer pursuant to the provisions of Section 7 of the ordinance, or where an income tax has been paid to another municipality, credit for the amount so paid in accordance with Section 15 hereof, shall be deducted from the amount shown to be due and only the balance, if any, shall be due and payable at the time of filing said return.
2. A taxpayer who has overpaid the amount of tax to which this municipality is entitled under the provisions of the ordinance may have such overpayment applied against any subsequent liability hereunder or, at his election indicated on the return, such overpayment (or part thereof) shall be refunded, provided that no additional taxes or refunds of less than on dollar ($1.00) shall be collected or refunded.
E. Amended Returns.
1. Where necessary an amended return must be filed in order to report additional income and pay any additional tax due, or claim a refund of tax overpaid, subject to the requirements and/or limitations contained in Section 11 and 12. Such amended return shall be on a form obtainable on request from the Commissioner. A taxpayer may not change the method of accounting or apportionment of net profits after the due date for filing the original return.
2. Within three (3) months from the final determination of any federal tax liability affecting the taxpayer's (name of municipality) tax liability, such taxpayer shall make and file an amended (name of municipality) return showing income subject to this municipality's tax bases upon such final determination of federal tax liability, and pay any additional tax shown due thereon or make claim for refund of any overpayment.
ARTICLE VI COLLECTION OF TAX AT THE SOURCE
A. Duty of Withholding.
1. Except as otherwise provided herein, it is the duty of each employer within or doing business within this municipality, who employs one or more persons whether as an employee, officer, director or otherwise, to deduct each time any compensation is paid the tax of one percent (1%) from;
a. The gross amount of all salaries, wages, bonuses, incentive payments, fees, commissions or other forms of compensation paid to residents of this municipality, regardless of the place where the services are rendered; and
b. All compensation paid non-residents for services rendered, work performed or other activities engaged in within this municipality.
2. All employers within or doing business within this municipality are required to make the collections and deductions specified in this article, regardless of the fact that the services on account of which any particular deduction is required, as to residents of this municipality, were performed outside this municipality.
3. Employers who do not maintain a permanent office or place of business in this municipality, but who are subject to tax on net profits attributable to this municipality, under the method of allocation provided for in the ordinance, are considered to be employers within this municipality and subject to the requirement of withholding.
4. The mere fact that the tax is not withheld will not relieve the employee of the responsibility of filing a return and paying the tax on the compensation paid. If the employer has withheld the tax and failed to pay the tax withheld to the Commissioner, the employee is not liable for the tax so withheld.
5. Commissions and fees paid to professional men, brokers and others who are independent contractors, and not employees of the payer, are not subject to withholding or collection of the tax at the source. Such taxpayers must in all instances file a declaration and return and pay the tax pursuant to the provisions of the ordinance and Articles V and VII of the regulations.
6. Where a non-resident receives compensation for personal services rendered or performed partly within and partly without this municipality, the withholding employer shall deduct, withhold and remit the tax on that portion of the compensation which is earned within this municipality in accordance with the following rules of apportionment:
a. If the non-resident is a salesman, agent or other employee whose compensation depends directly on the volume of business transacted or chiefly effected by him, the deducting and withholding shall attach to the portion of the entire compensation which the volume of business transacted or chiefly effected by the employee within this municipality bears to the total volume of business transacted by him within and outside this municipality.
b. The deducting and withholding of personal service compensation of other non-resident employees, including officers of corporation, shall attach to the proportion of the personal service compensation of such employee which the total number of his working hours within this municipality is of the total number of working hours.
c. The fact that non-resident employees-are subject to call at any time does not permit the allocation of pay for time worked within this municipality on a seven-day per week basis. The percentage of time worked in this municipality will be computed on the basis of a forty-hour week unless the employer notifies the Commissioner that a greater or lesser number of hours per week is worked.
7. An employer shall withhold the tax on the full amount of any advances made to an employee on account of commissions.
8. An employer required to withhold the tax on compensation paid to an employee shall, in determining the amount on which the tax is to be withheld, ignore any amount allowed and paid to the employee for expenses necessarily and actually incurred by the employee in the actual performance of his services, provided such expenses are incurred in earning compensation, including commissions, and are not deducted as a business expense by the employee under Article III of these regulations.
9. An employer whose records show that an employee is a non-resident of this municipality and has no knowledge to the contrary, shall be relieved of the responsibility of withholding the tax on personal service compensation paid to such employee for services rendered or work done outside this municipality by such employee, provided, however, that such employer must withhold the tax on all personal service compensation paid such employee after the Commissioner notifies said employer in writing that such employee is a resident of this municipality. All employees are required to notify the employer of any change" of residence and the date thereof.
10. A Malta employer required to withhold the tax from a Malta Resident for work done or services performed in another-municipality, and who does so withhold and remit to such other municipality, shall be relieved from the requirement of withholding the Malta tax from such Malta resident, except where the rate of tax for such other municipality is less than the-rate of tax imposed by this ordinance. In such case the employer shall withhold and remit the difference to this municipality.
11. No person shall be required to withhold the tax on the wages or other compensation paid domestic servants employed exclusively in or about such person's residence, but such employee shall be subject to all of the requirements of the ordinance.
B. Return and Payment of Tax Withheld and Status of Employers.
1.The deductions from salaries, wages, and other compensation required to be made by employers are to begin with the compensation earned on and after the effective date of the ordinance.
The employer (in addition to any return required to be filed with respect to his own earnings or net profits) shall, on or before the last day of the month next following each quarterly period, make a return and pay' to the Commissioner the full amount of the tax so deducted or withheld with respect to compensation paid all of his employees subject to the tax under the ordinance. Provided, however, the Commissioner may require an employer to remit withholding taxes at more frequent intervals.
The return required to be filed under this article shall be made on a form furnished by or obtainable on-request from the Commissioner.
2. If more than the amount of tax required to be deducted by the ordinance is withheld from an employee's pay, such excess may be refunded by the employer or the Commissioner, depending upon the circumstances and the time when the over-withholding is determined as follows:
a. Current employees:
.1 If the over-withholding is discovered in the same period the employer shall make the necessary adjustment directly with the employee and the amount to be reported on the return as withheld shall be the corrected amount;
.2 If the over-withholding is discovered in a subsequent period of the same calendar year the employer may make proper adjustment with the employee. In such case the return for the period in which the adjustment is made shall indicate the total amount actually withheld, the amount of the adjustment deducted therefrom, and the corrected-amount reported on the return;
.3 If the over-withholding is discovered in the following year, the employer should notify the Commissioner of such over-withholding and the circumstances thereof. Upon proper verification the Commissioner shall refund to the employee the amount of such excess withholding;
b. Former employees:
.1 In case too much has been withheld from an employee who is no longer employed by the employer, the employer shall notify the Commissioner of the amount and circumstances of such over-withholding and the Commissioner shall then refund to the employee the amount of such excess withholding; or
.2 If the error is discovered by the employee such employee shall file a claim with the Commissioner and, upon verification thereof by the employer, the Commissioner shall refund to the employee the amount of such excess withholding;
c. Insufficient Withholding:
.1 If less that the amount of tax required to be deducted is withheld from an employee, such deficiency shall be withheld from subsequent wages. However, if the employee-employer relationship has terminated, the employer shall notify the Commissioner of such deficiency and the reason therefor and be liable for said deficiency himself.
3. Every employer is deemed to be a trustee for this municipality in collecting and holding the tax required under the ordinance to be withheld and the funds so collected by such withholding are deemed to be trust funds.
4. Every such employer required to deduct and withhold the tax at the source is liable directly to this municipality for payment of such tax whether actually collected from such employee or not.
5. On or before the 31st day of January, following any calendar year in which such deductions have been made by an employer, such employer shall file with the Commissioner, in the form prescribed by the Commissioner, an information return for each employee from whom this municipality's income tax has been withheld, showing the name, address and social security number of the employee, the total amount of compensation paid during the year and the amount of this municipality's income tax withheld from such employee.
6. The gross compensation to be reported for each employee shall be for the full twelve (12) calendar months of the year or such portion thereof as the employee reported on was employed.
7. All payments not subject to withholding shall be reported on forms as required by the Commissioner.
8. In addition to such information returns, and at the time the same are filed, such employer shall file with the Commissioner a form to enable the Commissioner to reconcile the sum total of compensation paid and taxes withheld as disclosed by information return W-2, or list of employees, and prior returns and remittances made pursuant to the ordinance.
C. Fractional parts of Cent: In deducting and withholding the tax at the source and in payment of any tax due under the ordinance, a fractional part of a cent shall be disregarded.