City of Scranton Reminds Businesses to Submit 4th Quarter Payroll Preparation Tax Businesses Reminded that the Deadline for Submitting the 2024 Fourth Quarter Payroll Preparation Tax Return is February 28, 2025 Entities conducting business within the City of Scranton are reminded that the due date to submit their fourth quarter tax return for the 2024 Payroll Preparation Tax is February 28, 2025. A person shall be deemed to be conducting business within the City if they engage, hire, employ, or contract with one or more individuals as employees, partners, or is self-employed and, in addition, does at least one of the following: Maintains a fixed place of business within the City; Owns or leases real property within the City for profit; Maintains a stock of tangible, personal property in the City for sale in the ordinary course of business; Conducts continuous solicitation within the City related to such business; or Utilizes the streets of the City in connection with the operation of such business (other than for the mere transportation from a site outside the City, through the City, to a destination outside the City.) Institutions who are exempt from the Payroll Preparation Tax as a result of their status as a nonprofit are required to file quarterly returns claiming their exemption. Returns submitted after February 28, 2025, will be subject to penalty and interest on the balances due. The Payroll Preparation Tax is a tax levied separately by both the Scranton School District and the City of Scranton. The 2024 Payroll Preparation Tax rate for the Scranton School District is 0.7553 percent and the 2024 Payroll Preparation Tax rate for the City of Scranton is 0.2787 percent. The combined 2024 Payroll Preparation Tax rate is 1.034 percent. The City of Scranton and the Scranton School District have both appointed Berkheimer Tax Innovations, Inc. to administer the Payroll Preparation Tax on their behalf. Tax forms are available on Berkheimer’s website at hab-inc.com/pptforms. Additional information, including Frequently Asked Questions, can be found at scrantonpa.gov/payroll-prep-tax-information, https://www.scrsd.org/departments/business-office and www.hab-inc.com/ppt-faq. Please direct all questions regarding the Payroll Preparation Tax to Berkheimer by emailing ebpt@goberk.com or by calling (610) 599-3140.
Payroll Prep Tax Information When the City of Scranton was declared a financially distressed municipality pursuant to the Municipalities Financial Recovery Act, Act 47 of 1987, as amended, (Act 47) it was authorized to levy a payroll preparation tax in lieu of the City’s business privilege tax and mercantile tax. On December 14, 2021, Scranton City Council adopted ordinance File of the Council No. 95 repealing the City of Scranton’s business privilege tax and mercantile tax and authorizing the levy of a payroll preparation tax to begin on January 1, 2022. WAIVER OF INTEREST AND PENALTIES THROUGH JUNE 30, 2022In the interest of assisting City’s businesses as they prepare their initial Payroll Preparation Tax return, on May 24, 2022, Scranton City Council approved Resolution No. 79 which provides a one-time waiver of the interest and penalties that would otherwise be due from June 1, 2022, through June 30, 2022. This, in practical terms, extends the due date from May 31, 2022, to June 30, 2022, of a business’s initial Payroll Preparation Tax return. Read more about the Payroll Prep Tax on the City’s website. Read More
Payroll Preparation Tax Calculator The City of Scranton and Scranton School District have taken steps to eliminate the Business Privilege and Mercantile (BPM) taxes for 2022, in favor of a Payroll Preparation Tax (PPT). While only select businesses are subject to the BPM taxes, the PPT will be applied more broadly to entities doing business in the City of Scranton. By law, this transition must be revenue neutral – which means neither taxing body can generate more total revenue than what is collected under the BPM from the previous year. For some businesses this will result in a decrease in tax liability, while others will see an increase. If fully approved, beginning in January 2022, the PPT will be imposed on a percentage of a business’s total payroll—at a rate of 0.002786775 by the City and 0.008064 by the School District. Likewise, all BPM liabilities will be eliminated. Learn more about the details of this proposed action here. To estimate your anticipated PPT liability, use the calculator below.* PPT Tax Calculator *Please note, calculator is for estimation purposes only.
