Local Services Tax Regulations Sheet 2008 Page 8
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14As to employees who present official receipts evidencing prior payment of the tax either
directly or by collection through other employers in Pennsylvania, the employer shall not
deduct the tax but shall maintain adequate records concerning the employees.
f.
The employer must list on the employee’s pay stub how much was withheld and list the
municipality it was paid to. List PITTSBURGH as “PGH”.
g.
Upfront Exemption. Employers are required to discontinue withholding the LST if an
employee provides an exemption certificate showing that he has earned income and/or
net profits of less than $12,000. The exemption certificate must verify that the employee
reasonably expects to receive earned income and/or net profits of less than $12,000 from
all sources within the City for the calendar year for which the exemption certificate is filed.
A copy of the employee’s final pay stubs or W-2 forms from employment within Pittsburgh
for the year prior to the calendar year for which the employee is requesting an exemption
must be attached to the exemption certificate. Employers must make upfront exemption
forms readily available to employees at all times and provide new employees with the
forms at the time of hiring. Employers are relieved of liability due to incorrect information
on the exemption certificate completed by the employee.
Employers are only required to withhold the LST on a payroll period basis for those
payroll periods in which the taxpayer is employed. However, when two or more
employers employ a taxpayer in a payroll period, an employer is not required to withhold
the LST if the taxpayer provides a pay stub from his/her principal employer accompanied
by an employee statement of principal employment that the pay stub is from the
taxpayer’s principal employer and that the taxpayer will notify the employer of any change
in employment. Employers are relieved of liability for the tax if they fail to withhold the tax
due to incorrect information provided by the taxpayer regarding the taxpayer’s principal
employer.
h.
Military Exemption. Employers must exempt from the LST: (1) members of a reserve
component of the armed forces called to active duty and (2) honorably discharged
veterans who served in any war or armed conflict who are blind, paraplegic, or a double
or quadruple amputee as a result of military service or who are 100% disabled from a
service-connected disability.
i.
Restoration of Withholding. Employers must “restart” withholding the LST from an
employee who files an exemption certificate in the following circumstances:
• If instructed to do so by the political subdivision levying the LST;
• If notified by the employee that he is no longer eligible for the exemption; or
• If the employer pays the employee $12,000 or more for the calendar year.
Employers “restart” withholding of the LST by withholding (1) a “catch-up” lump sum
equal to the amount of tax that was not withheld from the employee as a result of the
exemption; and (2) the same amount per payroll period that is withheld from other
employees.
j.
The employer must attach a summary on a CD or hard copy with the fourth quarter
payment listing the following information:
• Employer’s name, address in Pittsburgh, Federal ID number, and the employer’s City
account number.
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