Frequently Asked Questions
About the ACT 199 – Local Services Tax
- Effective January 1, 2014 municipalities that are under ACT 47 programs have the ability to raise their Local Services Tax (LST) to a maximum rate of $156.00 per year.
- The new tax remains a weekly payroll deduction. The tax will be withheld from the employee each time they are paid on a prorated basis determined by the number of payroll periods in a calendar year.
- The employee will only be required to pay the tax for the period in which they are employed within a political subdivision which imposes the tax.
- If the total LST rate enacted exceeds $52.00, the Act requires that all jurisdictions exempt individuals with incomes within their jurisdictions of less than $15,600 per year. An area may enact an exemption greater than this figure as well.
- If the employee anticipates making less than the exemption amount, they have the right to complete a Local Services Tax Exemption Certificate.
- Please be advised that the same income exemption may not apply to the school district portion of the tax. So, an employee may be exempt from the municipal rate, but still owe the school district’s portions ($10.00 or less).
- A person who served in any war or armed conflict in which the United States was engaged, received an honorable discharge and as a result of such service was left blind, a paraplegic, a double or quadruple amputee or has a service connected disability declared by the United States Veterans Administration (or its successor) to be a total one hundred percent permanent disability is exempt from the LST. Likewise, any person who serves as a member of a reserve component of the armed forces and is called to active duty during the tax year is exempt from the tax.