Township Considers Local Service Tax

The Local Service Tax (LST) was discussed at the June 27 Finance and Administrative Committee meeting.

According to John Crawford, assistant township manager, the LST is a tax affecting those who work inside the township, but are not residents.

“This is a tax that the board can implement without much burden to its residents,” Crawford said.

Crawford, who is also the township’s director of finance, informed the committee of 19 local municipalities have already implemented this tax, including Abington, Cheltenham, Lower Moreland, Bryn Athyn, Whitemarsh, Plymouth, Jenkintown, Hatfield and Ambler.

This means that any Upper Moreland resident working in townships with the LST pay this tax.

Currently there is a $10 Occupational Privilege Tax (OPT) for nonresidential individuals earning more than $1,000 in the township. Should LST be implemented, individuals living outside the township and earning over $12,000 will have to pay a $52 tax.

During the meeting, Ward 7 commissioner James McKenna, who sits on the committee, asked whether or not it was feasible to enact the LST. According to McKenna, the matter was also discussed by the board commissioners five years ago.

Crawford explained that the state legislation put the burden on the municipalities to levy the tax, which would have created a signifigant loss of revenue, as the township would have to pay several tax-collecting agencies to set up the collecting system, which must be staggered throughout the year.

Crawford said that the township could now use H.A. Berkheimer Associates, a tax collection services firm that already has a system in place to collect the township’s earned income tax.

H.A. Berkheimer Associates also conducts countywide tax services. According to Crawford, of the 19 local municipalities already implementing the LST, the majority use this firm.

Crawford also pointed out that residents working within the township will get a break, and the township will still able to increase revenue for core services, which include police, fire and roadway maintenance.

He said, after the meeting, if the township did not create the ordinance to enact the LST, the township would have to raise the real estate tax to create the same revenue.

A majority of the commissioners present during the meeting gave positive comments on adopting an ordinance to enact the LST.

“I’m in favor for it. To me, it’s a fair and sensible tax,” Ward 3 commissioner Donna Parsell said, adding, “They do use our roads and emergency services.”

During the meeting, Crawford informed the committee that the LST has to be enacted by Dec. 1, in time to be included for the 2012 budget.