The single most important question you must answer to determine your employee local tax withholding requirements is as follows: Does or will your business maintain a work site within College Township? Maintaining a work site means you have a physical presence in the Township via a branch office, factory, retail outlet, distribution center, warehouse operation, and so on. Normally, the work site must be either owned or leased by your company. If you are self employed and work from your home in College Township, your business has a work site in College Township.
If you answered yes to the above question, you are required to withhold two local taxes from every employee (i.e. residents: those who live in College Township and nonresidents: those who live elsewhere) who is deemed to work at your business's College Township work site. The taxes are as follows: 1) Earned Income Tax (EIT) and 2) Local Services Tax (LST).
All businesses withholding local taxes from their employees must register their business by completing an Employer Registration form.
The withheld taxes are reported and remitted to the Centre Tax Agency (aka State College Borough). The Centre Tax Agency is the collector appointed by College Township for both the Earned Income Tax and the Local Services tax.
The Centre Tax Agency then distributes the remitted EIT and LST to the proper taxing jurisdiction (municipality). The distribution is based on the employee's permanent home address and also their work location address reported by you for the employee on the monthly or quarterly return that accompanies your remittance. It is extremely critical that you provide accurate residence and work locations to the Centre Tax Agency. A certificate of residence should be used to obtain this information.
Nonresident and resident employers must withhold the LST from employees working out of their residence in College Township.
View the Centre Tax Agency's Website where you can obtain forms and information on filing and remitting taxes to their office. They provide electronic filing and remittance options that will save you both time and money in meeting your employer tax withholding responsibilities.