Act 32 Glossary

These terms are used solely for the purposes of this website. For the full statutory definitions of these terms, please click here. (NOTE: This link provides access to the text of Act 32, as finally passed by the Pennsylvania General Assembly. The original text of the law may no longer be current. Jordan Tax Service, Inc. does not warrant any content linked to this page. Users should seek legal assistance to verify the current status of the law.)

DCED – Pennsylvania Department of Community and Economic Development.

EARNED INCOME TAX (EIT) – EIT is the tax levied by a political subdivision on earned income, such as wages, salaries, or other compensation.

EMPLOYEE – An employee is a person who works for any Employer(s) for a wage, salary, or other compensation.

EMPLOYER – An employer is a person, business or entity employing one or more persons for wages, salary, commission, or other compensation.

JORDAN TAX SERVICE, INC. (JTS) – JTS has been appointed the Tax Officer for the Allegheny County Central Tax Collection District and Southwest Allegheny County Tax Collection District.

NET PROFITS – Net profits are the net income from the operation of a business other than a corporation, subject to the exclusions listed under Act 32. For the text of the Act, click here – LINK..

NET PROFITS TAX (NPT) – NPT is the tax levied by a political subdivision on Net Profits.

NON-RESIDENT EIT RATE – The non-resident EIT rate is the earned income tax rate imposed on an Employee by the municipality in which he or she works. Under Act 32, an Employer is generally required to withhold at the higher of the Employee’s resident or non-resident rate. To view the non-resident EIT rates for municipalities in Pennsylvania, please click here.

POLITICAL SUBDIVISION (PSD) – PSDs include cities, boroughs, towns, townships, school districts, and municipal authorities.

RESIDENT EIT RATE – The resident EIT rate is the earned income tax rate imposed on an Employee by the municipality and/or school district where he or she lives. Under Act 32, an Employer is generally required to withhold at the higher of the Employee’s resident or non-resident rate. To view the resident EIT rates for municipalities and school districts in Pennsylvania, please click here.

TAX COLLECTION COMMITTEE (TCC) – A TCC is the committee established to govern each TCD for the purpose of collecting EIT. A TCC can represent a single TCD, or can be a joint TCC, representing more than one TCD.

TAX COLLECTION DISTRICT (TCD) – A TCD is an area outlined and designated by statute for the purpose of collecting income taxes for the PSDs within its borders. Most TCD borders are coterminous with county borders, except for within Allegheny County and Philadelphia City/County.

TAX or TAXES – EIT and NPT are sometimes collectively referred to by JTS as Tax or Taxes.

TAX OFFICER – A Tax Officer is the tax collector appointed by the Tax Collection District (TCD) to collect EIT.

TAXPAYER – A taxpayer is a person or a business required to file a Tax return or pay Taxes.

 


 

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