Business Privilege and Mercantile Tax FAQ
1. Definition of “Business”?
Carrying on or exercising within the City of Scranton or attributable thereto any trade, business financial business or commercial activity, whether for profit or otherwise.
2. Definition of “Person”?
Any natural person, partnership, limited partnership, joint venture, unincorporated association, corporation or other entity engaged in business. Whenever used in any provision prescribing a fine or penalty, the word “Person” as applied to the partnerships, shall mean the partners thereof, and as applied to corporations and unincorporated associations, shall mean the officers thereof.
3. Who Must File a Return?
a. Every person, as defined herein, and every receiver, trustee, assignee or other person acting in a fiduciary or representative capacity, and any other combination of persons carrying on or exercising, within the City of Scranton or attributable thereto, any business or financial business must file a Business Privilege and/or Mercantile Tax return.
b. Every person subject to the tax imposed by the Resolution shall forthwith register with the City, upon a form furnished by the Collector of Taxes, and set forth name, address, business address, the nature of the business activity in which engaged, and such other information as may be required by the Collector of Taxes.
4. When to File a Return and Where?
Business Privilege and/or Mercantile Tax return is due annually on April 15, based on prior calendar year gross volume of business transacted. All tax returns are filed with the Collector of Taxes office:
PO Box 1338
Scranton, PA 18501
5. Do I have an Account with the Collector of Taxes?
All taxpayers filing Business Privilege and/or Mercantile Tax return must have an account with Collector of Taxes office. If taxpayer does not have an account, one can be established by submitting a completed “questionnaire” form with the Collector of Taxes. The form can be obtained on our website or by calling the Collector of Taxes at (570)963-6756. Tax returns cannot be processed without an account with the Collector of Taxes.
6. Which Classifications do I pay under?
There are (3) three classifications under the Business Privilege and/or Mercantile Tax to file:
a. RETAIL – The sale of a tangible item directly to the consumer.
b. WHOLESALE – The sale of a tangible item to another person who will then resell directly to the consumer.
c. SERVICE – Diversified activities other than retail or wholesale vending of goods, wares or merchandise, including but not limited to repairs, consultation, rentals, commission sales, professional treatment, preparation of forms, training, designing, installation, supplying personnel or material, building, engineering and planning. Taxpayer might file return under more than one classification depending how diverse the business gross receipts are generated.
8. Proof of Gross Receipts When Filing?
All taxpayers when filing the Business Privilege and/or Mercantile Tax form must attach proof of gross receipts to return. Proof of gross receipts is to verify or substantiate the tax filing.
9. Deductions from Gross Receipts?
The only deduction permitted from gross receipts is a return of capital. Capital does not include inventory, stock-in-trade or other assets held for sale in the ordinary course of business.
Payment of the Business Privilege and/or Mercantile Tax return is due in full on April 15. Any partial payment or non-payment of tax liability will result in interest and penalty charges of 1% per month on unpaid balance.