Instructions For Form Lst-1 - Local Services Tax

I1406-2 11/07

Dear Employer:

This letter is being sent to inform you of the changes that will be taking effect on January 1, 2008, tax

year 2008 and forward, to the way that this tax will be collected. The changes were mandated by the

bill enacting Act 7, which was signed into law by the governor earlier this year. The following is an

outline of the changes which you should be aware of:

THE FOLLOWING CHANGE APPLIES TO ALL EMPLOYERS:

1. Effective January 1, 2008, the name of the tax will change to the Local Services Tax.

THE FOLLOWING CHANGES APPLY ONLY TO EMPLOYERS WITH A TAX RATE GREATER

THAN $10:

2. The tax, for tax year 2008 forward, becomes a weekly payroll deduction. The tax will now be

withheld from the employee each time they are paid. To calculate the amount to be withheld from each

employees pay you should take the tax rate in effect and divide it by the number of pay periods in the

coming year. You are required to withhold the tax from all employees in your employ unless they meet

the criteria stated in # 5, 6 and/or 7 below.

3. You will now remit the taxes withheld to the municipality’s collector on a quarterly basis.

4. The employee will only be required to pay the tax for the period in which they are employed within

this jurisdiction

5. The act requires that all jurisdictions exempt individuals with incomes within their jurisdiction of

$12,000. Employees will have the right to complete a copy of form (LST Exemption 10-07). You will be

required to retain a copy of the form. We request that the employer submit the original, with all

attachments to us with your quarterly filings.

6. The act also requires that taxing bodies also exempt all individuals who are on active military duty

or have been called to active military duty at any time within the taxing year from payment of the tax.

Also to be exempted from payment of the tax are any former/current member of the military who is a

paraplegic, double and/or quadruple amputee or has any service related disability, as declared by the

United States Veterans Administration or its successor.

7. Employers shall refrain from withholding the tax from any employee who provides proof that they

are already having the tax withheld by another employer. The other employer must be their place of

primary employment.

Additional Information, including Rules & Regulations outlining your requirements, forms, additional

exemption certificates, and refund request forms, is available on our website at

Respectfully,

Berkheimer Tax Administrator

Instructions For Form Lst-1 - Local Services Tax - 2007 Page 2