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.

10. Payment?
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.


Annual Employer LST Filing Specs
There are two LST magnetic file formats accepted by the Local Income Tax.

2.1 Social Security MMREF-1 format
The most current MMREF-1 format for Earned Income Tax reporting will be accepted by the Local Income Tax system. Employer may include all record types in the file by the LI system will only process RE (employer) and RS (state) records. Multiple employers are acceptable per MMREF coding rules.

2.2 Standard Format file with CR/LF record delimiters
Only one employer per file is allowed.

Use one of the following formats. The first format is preferred.

Note Tax and gross fields are numeric, dollars and cents. Right justify and zero fill. Do not include decimal point.

Option 2A – new format with expanded fields (preferred format). Using this format, you can report EIT or EMS or both.

SS number 9
Last Name, optional Suffix (Jr., Sr., etc.) 20
First Name 20
Street Address 30
City 22
State 2
Zip 5
Zip extension (if known) 4
EIN number 9
PSD Code 4
Taxable Gross 11
Local Tax withheld 9
LST Tax withheld 5

Option 2B – same format as last year for EIT reporting

SS number 9
Name 25
Street Address 35
City 20
State 2
Zip 5
EIN number 9
City ID 5
PSD Code 4
Taxable Gross 9
Local Tax withheld 7

EIN number: employer FedID
PSD Code: four-digit town code (You must have the correct code to file magnetically)
City ID: optional

Real Estate FAQ

1. How Can I Change My Name or Address?
Address change requests must be made to the Lackawanna County Assessors Office (phone: 570-963-6728).
Name change requests should be made to the Lackawanna County Recorder of Deeds.

2. Can I Pay in Installments?
Real estate taxes for the City of Scranton and Scranton School District can be paid in four installments; use the coupons provided at the bottom of your real estate bill. Installments are not accepted for the Lackawanna County portion of your property tax bill; this portion must be paid in full.

City of Scranton and Scranton School District installment payment deadlines are:

First payment due by last working day of March; second payment due by last working day of June; third payment due by last working day of August; fourth payment due by last working day of October.

3. Where Can I Pay?
Payments can be made at the Scranton Single Tax office. Payments can also be made with a credit or debit card online. See “Make a Payment” tab above.

Delinquent Taxes for County/Scranton School District must be made to Tax Claim 570-963-6734.

2017 Delinquent Taxes for the City of Scranton are payable at our office. 2016 and prior year delinquents must be paid to Northeast Revenue Service 570-207-3861.

Earned Income Tax FAQ (2011 and prior)

Earned Income Tax:

1. Who must file a return?
Every person who is employed on a salary, wage, commission or other compensation, which is subject to tax regardless of earnings or wage; every person engaged in any business, profession or other activity, the Net Profits of which are subject to tax regardless of earnings or age.

2. Do I have to pay interest and penalty?
Every individual who does not file and pay their total amount due in full by April 15 (each year) owes 1% (0.5 percent interest and 0.5 percent penalty) per month on the unpaid balance.

3. Where do I get copies of my W2s?
You can obtain copies of your W2s from your employer (previous or current). You may obtain print outs of your federal tax returns from the IRS (a charge may apply). You may also obtain print outs of your Pennsylvania state returns from the state of Pennsylvania (a charge may apply). If a tax preparer processed your tax returns you may obtain a copy from them.

4. I can’t afford to pay my taxes in full; can I have a payment plan?
Yes, however, payment plans are a one time option and there is a $35.00 processing fee, which must be paid prior to receiving one.  Taxpayer’s must request their payment plan in writing and submit a separate check or money order in the amount of $35.00.  Payment plans are only approved when all tax years are filed.  Interest and penalty continues to accrue while on a payment plan.

5. I am on an extension with the Federal government; can I have an extension with the Single Tax Office? 
If you are not going to file and pay your taxes in full on April 15, because you have an extension with the IRS, you must send a copy of your approved federal extension.

6. Do I have to pay interest and penalty on my taxes if I am on an approved federal extension?
Yes, your tax payment is due on April 15; your extension is for your paperwork only.

7. What do I do if I disagree with my bill?
You may request an administrator’s ruling. But it must be received in our office within thirty (30) days of the date on your invoice or bill.

8. What do I do if I need more time to get my W2s or other requested information?
You may request a reasonable extension for good cause.  However, it must be requested within thirty (30) days of the date our request.

9. What do I do if I was a part time resident or not a resident of Scranton, but I received a bill or request to file a tax return?
You must prove you were not a resident of Scranton with legal documentation. Refer to the tax office employee who sent you a request on the letter you received.