WORKERS REMINDED OF NEW TAX EXEMPTION

HARRISBURG, JAN. 25 – State Sen. Connie Williams reminds people who earn less than $12,000 per year that they qualify for an exemption from the Local Services Tax (formerly the Emergency and Municipal Services Tax).

"It is important to understand that employees must file for this exemption – it is not automatic. In many cases, employers may be aware of the change in the law dealing with this tax and may approach eligible employees, but in other cases, it may be up to the worker to speak with his or her boss concerning the withholding of this tax from their paychecks," Williams said. "The LST may range from $10 to $52 depending on the municipality. For someone who counts on every dime of their paycheck to survive, that money is vital to providing for themselves and their family."

In 2007, the General Assembly voted on legislation (S.B. 218) that exempted low-income workers, disabled veterans and activated military reservists from the tax. The new law also requires employers to withhold the LST in equal installments each pay period rather than one lump sum.

Under the law, employees may file an annual "upfront exemption form" with their local municipality levying the LST as well as their employer. The exemption certificate verifies that the employee reasonably expects to make less than $12,000 for that year.

These forms should be available to employees at all times and provided to new hires. Eligible low-income workers can get this tax money refunded to them, but by filing for an exemption should be able to avoid having the tax taken from their pay checks to begin with.

Local governments that assess the tax at $10 or less have the discretion to exempt low-income workers. Governments that assess an LST above $10 are required to exempt eligible low-income seniors.

A downloadable exemption form, refund form and additional information on the LST is available on Williams' Web site at www.senatorconniewilliams.com.