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Chambersburg board exempts some from services tax

November 30, 2007|By DON AINES

CHAMBERSBURG, Pa. - Faced with the choice of collecting pennies a week from some of its less well-off taxpayers, or losing about $40,000 in revenue, the Chambersburg School Board Wednesday voted unanimously to exempt people making less than $12,000 from the $5-a-year occupational privilege tax.

The occupational privilege tax was once $10 a year, split evenly between the school district and municipality. A couple of years ago, however, it was changed by the Pennsylvania General Assembly to the Emergency and Municipal Services Tax, which allowed municipalities to up their share of the tax to $47.

Now the tax has "morphed" again, to become the Local Services Tax, Business Manager Rick Vensel told the board. The LST requires municipalities to exempt anyone from paying it who earns less than $12,000 a year, but the district could still collect its $5.

"We must collect the $5 in 52 increments, or 9 cents a week," Vensel told the board. He called the legislation that requires it be deducted from payroll checks, "a little bit silly."

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By exonerating those making less than $12,000 a year from the tax, it somewhat reduces the bureaucratic headache of collecting the money, Vensel said. Individuals will have some red tape to wade through to keep from paying the tax, he said.

"The new legislation, to put it bluntly, is ugly," said James Clapper, the executive director of the Chambersburg Area Wage Tax Bureau. "A uniform exemption would definitely be a step in the right direction."

Businesses will have to provide forms for employees to fill out to be exonerated, he said. The tricky part is that people are hired, fired, laid off or changing jobs throughout the year, he said.

People expecting to make considerably more than $12,000 could find themselves laid off, making them eligible to apply for a refund, Clapper said. On the other hand, someone who applies for exoneration could end up making above the limit.

Board member William Tolleson agreed with Vensel and Clapper that the law is a bit confusing.

"When you read the text of this thing, it's like 'Who's on First?'" he said, referring to an old Abbott & Costello vaudeville routine.

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