Frequently Asked Questions

 

What is the Local Services Tax?

The Local Services Tax is a local tax payable by all individuals who hold a job or profession within a taxing jurisdiction imposing the tax. It is due quarterly on a prorated basis determined by the number of pay periods for a calendar year.

How to Withhold for Your Employees:

If the total LST rate enacted exceeds $10, the tax must be assessed and collected on a prorated basis determined by the number of payroll periods established by an employer for a calendar year. The tax assessed on each employee for a payroll period is calculated by dividing the total rate of the LST by the number of payroll periods established by the employer for the calendar year. When calculating the prorated share, employers are required to round down to the nearest one-hundredth of a dollar. For instance, a $52 tax would be collected at $1 per week for employees paid weekly or at $4.33 per month for taxpayers paid monthly. A $36 tax would be collected at 69 cents a week for employees paid weekly, or at $3 a month for employees that are paid monthly.

If the total LST rate enacted is $10 or less, the tax may be collected in a lump sum.

You are required to include a list of individual employees and their social security numbers with your quarterly return.

Reporting for Self-Employed Individuals and Employers:

If you report your business earnings as a profit or loss on a Schedule with the Federal or State Governments (i.e. Schedule C or E), the form LST-3 should be filed quarterly if the enacted rate is greater than $10.00. If the enacted rate is $10 or less, the tax may be remitted in a lump sum during the first quarter of employment. Submit the LST-3 for yourself, in addition to the LST-1 for your employees. If you have no employees, indicate “No Employees” on the first quarter form, and submit along with the LST-3. If you are issued a W-2 for business earnings, you should not file the LST-3. In this case, report the Local Services Tax for yourself along with your employees on the LST-1 form.

Low Income Exemption:

Employers located in areas with a combined tax rate exceeding $10 are required to exempt employees whose total earned income and net profits from all sources is less than $12,000 for the calendar year. Employees must file an annual exemption certificate to receive the exemption request. Employers located in areas not exceeding $10 may or may not have a low income exemption. If an employee exceeds the low income exemption, employers are required to withhold a “catch-up” lump sum tax equal to the amount of tax that was not withheld from the employee as a result of the exemption and continue withholding the same amount per pay period that is withheld for other employees. Please be advised that the school district portion may not have an earnings exemption, or may be less than the municipal exemption in which this portion of the tax may still be due. If no exemption request is submitted and the employee does not meet the exemption amount by the end of the year, a refund request may be submitted by the taxpayer. The refund form and exemption certificate are available on our website.

How can an employer set up an account?

The employer can set up an account 3 ways.

  1. Electronically Employer Registration Form
  2. Download Employer Registration Form (PDF) & Fax (610) 588-5765 Attn: TAXROLL
  3. Call a customer care representative at (610) 599-3139 or Contact Us

The information needed to set up an account is:

  • Company name
  • Physical address of business location
  • Mailing address if different
  • Phone #
  • Fax #
  • E-mail address
  • Federal ID
Where can I locate the tax rate for a specific jurisdiction?

If you need information on Local Service Tax rates please go to the DCED Website ** Please note this is not a Berkheimer website and we are not responsible for any such third party content that may be accessed via this link.**

How can I find out what Municipality my business is located in?

If you need to locate what jurisdiction you are residing in please go to the DCED Website ** Please note this is not a Berkheimer website and we are not responsible for any such third party content that may be accessed via this link.**

How often is a return filed?

You are required to file a return quarterly. However some areas may differ from the chart below. Please check the jurisdiction you are filing for and their due dates.

Quarter Months Due On or Before:
1st Quarter January, February, March April 30th
2nd Quarter April, May, June July 31st
3rd Quarter July, August, September October 31st
4th Quarter October, November, December January 31st
How can I file a return?

There are 3 ways you can file your quarterly return.

1. Electronic Upload – You can use our format and upload your file using our online service 

2. Data entry – You can file using our online service

3. You can download an LST-1 form from our website by clicking here.

Mail Returns to:

HAB-LST
Berkheimer
PO Box 25156
Lehigh Valley, PA 18002 

Employer Electronic File Upload Questions:

You can obtain a copy of our formats below. If you have any questions, please feel free to call our Customer Care Department at (610) 599-3139 or Contact Us

Employer Local Services Tax File Formats

How should payments be submitted?
  1. You can mail your payment with your LST-1 form to the address listed below.
  2. If you are filing on line you will be required to pay on line at no extra costs

Mail payments to:

HAB-LST
Berkheimer
PO Box 25156
Lehigh Valley, PA 18002