Table of Contents
General Local Tax Guidelines .......................................................................................................... 1
How Are Local Taxes Calculated? ...................................................................................................... 2
Balance to Wage Locals ................................................................................................................... 3
ADP Local Tax Locator ..................................................................................................................... 4
Pennsylvania Earned Income Tax ................................................................................................... 7
Tax Rates ............................................................................................................................................ 7
Tax Collection Districts (TCDs) ........................................................................................................... 7
A Map of the Tax Collection Districts .................................................................................................. 8
Withholding and Reporting .................................................................................................................. 9
Political Subdivision (PSD) Codes .................................................................................................... 10
Residency Certification Form ............................................................................................................ 11
Pennsylvania Municipality Web Site ................................................................................................. 12
Finding the ADP Local Code ............................................................................................................. 15
Nonresident Rates ............................................................................................................................ 17
Pittsburgh .......................................................................................................................................... 18
Philadelphia ....................................................................................................................................... 19
Tax Collectors and Districts .............................................................................................................. 20
Pennsylvania Local Services Tax ..................................................................................................... 22
Ohio .................................................................................................................................................. 24
Primary Codes and Alternate Codes in Ohio .................................................................................... 28
Cincinnati .......................................................................................................................................... 29
Ohio Website..................................................................................................................................... 30
Ohio School District Taxes ................................................................................................................ 33
Michigan........................................................................................................................................... 36
Michigan Cities with an Income Tax ................................................................................................. 37
Indiana .............................................................................................................................................. 38
Kentucky .......................................................................................................................................... 40
Louisville/Jefferson County ............................................................................................................... 41
Boone County ................................................................................................................................... 43
Florence ............................................................................................................................................ 44
Walton or Verona .............................................................................................................................. 44
Erlanger ............................................................................................................................................. 44
Georgetown/Scott County ................................................................................................................. 46
Lexington/Fayette County ................................................................................................................. 47
Alabama ........................................................................................................................................... 48
Colorado .......................................................................................................................................... 49
Delaware .......................................................................................................................................... 50
Missouri ........................................................................................................................................... 51
St. Louis Payroll Expense Tax .......................................................................................................... 51
New York .......................................................................................................................................... 52
Metropolitan Commuter Transportation Mobility Tax ........................................................................ 53
Oregon ............................................................................................................................................. 54
Additional Taxes ............................................................................................................................. 55
U.S. Census Bureau Website ......................................................................................................... 57
Local Tax Quick Reference ............................................................................................................ 59
1
i
Revised 9/2/2016
Local Tax Overview
General Local Tax Guidelines
Local payroll taxes can take many different forms and can have varying
requirements. Most are withheld from the employee, but there are some taxes that
are paid by employers. In this workbook, we’ll review the various requirements for
locals in each state, but here is some general information about local payroll taxes.
Who imposes local taxes?
While many local taxes are imposed by cities, there are other types of local tax
jurisdiction. Here are some of the common types:





City
County
School District
Political Subdivision
Transportation District
Who pays local taxes?
Most local taxes are paid by employees through payroll tax withholding. Generally,
employers are required to withhold taxes based on where an employee is working.
There are also localities that impose taxes on residents of their jurisdiction,
regardless of where the employee works. In many cases, the withholding of resident
taxes where no work is being performed is not a required withholding. If an
employer chooses to withhold resident taxes as a courtesy, then they may obtain an
Employer Identification Number (EIN) from the employee’s resident locality and
withhold those taxes.
If employers do not withhold the resident taxes, it is the employee's responsibility
to pay those taxes to their resident locality.
There are some exceptions to these guidelines and those are referenced
throughout this book.
The information contained herein constitutes proprietary and confidential information and must not be distributed
without the express written permission of ADP. Copyright © 2015-2016 ADP, LLC. All rights reserved
1
Local Tax Overview
How Are Local Taxes Calculated?
Method 1
Local taxes are most often calculated as a percent of an
employee's taxable wages. There are usually no limits
on the amount to be withheld for local taxes as there are
for Social Security or FUTA\SUI\SDI (Kentucky is an
exception, with 9 locals that have limits).
Method 2
Some localities, such as New York City, use the same
factors as federal and many states to calculate local tax.
These factors can be:




Gross Pay
Marital Status
Number of Exemptions
Pay Frequency
Method 3
Localities, such as Greenwood Village, Colorado,
require both employer and employee to pay a flat dollar
amount per month, after an employee earns a minimum
amount in any given month. This is an example of a flat
dollar amount tax.
Method 4
Many localities in Pennsylvania impose a Local Services
Tax (LST), This tax is calculated at a fixed dollar amount
per year withheld from each payroll period throughout
the year and applies only in the municipality where the
employee works.
2
Local Tax Overview
Balance to Wage Locals
“Balance to Wage” is the program ADP will use for some localities to balance the
local taxable wages to the local tax withheld. This helps to ensure that the correct
amount of tax is deposited with the agency.
EXAMPLE:
Wages x Rate = Balance to Wages
$1,000 x 2% = $20.00 Tax Due
$15.00 Tax Withheld From Employee.
ADP would balance the tax to the taxable and charge the client an additional $5.00
on deposit day. This situation may occur when manual checks are issued and the
local tax was not reported.
Below are the invoice comments that will appear as a result of these adjustments.
Balance to Wages Invoice Comment Codes
An adjustment to local tax due is
necessary, as the agency requires tax to
be paid in strict accordance with their tax
rate. A review of your taxable wages in
this jurisdiction revealed either an
underpayment or an overpayment of the
associated tax.
H1: Bal-TO-Wages/CIT
A8: Bal-To-Loc-Wages
(Used for Manual Adjustments)
H3: ANR Bal-To-Wage
An adjustment to local tax due is
necessary, as the agency requires tax to
be paid in strict accordance with their tax
rate. A review of your annual taxable
wages in this jurisdiction revealed either
an underpayment or an overpayment of
the associated tax.
Not all localities are set up to balance to wage. To determine whether a locality is
set up to balance to wage, contact your ADP Payroll Representative.
3
Local Tax Overview
ADP Local Tax Locator
The Local Tax Locator is an internet based resource to assist in the identification of
ADP tax local codes. This can be accessed from the Insights & Resources section
of the ADP web site. The address for this site is: www.adp.com
From the page shown above, hover your cursor over “Insights & Resources.” When
the window below appears, click “Tax Tools.”
4
Local Tax Overview
From the page shown below, click “Learn More” under Local Tax Locator
5
Local Tax Overview
To find a particular local, follow the steps below.
STEP 1:
Click on the “down arrow” and a drop-down menu will appear.
From this menu, choose which state you are looking for.
STEP 2:
Type the name of the locality that you are searching for. If you only have part of the
name, this will be acceptable as the system will search, and provide as many
matches as possible. If you know the ADP local code, that can be typed in the
“Local Code” box in place of the name. The state will still need to be specified as
referenced in Step 1.
STEP 3:
Click GO. That’s it! The database will bring up all possible matches, and allow you
access to the most current rates, codes, resident / non-resident indicators, and any
additional jurisdictional information you might need.
6
Local Tax Overview
Pennsylvania Earned Income Tax
Quick Tips
Type of tax: Political Subdivision or Municipality
Based on: Where an employee works and lives
Paid by: Employees
The Earned Income Taxes (EIT) in Pennsylvania are local income taxes imposed
by the employee’s resident municipality.
In 2012, legislation called Act 32 provided for a restructuring of the Earned Income
Tax Collection System for Pennsylvania local governments and school districts.
This collection system has greatly reduced the number of tax collectors. Employers
will be required to withhold from all employees working in a collection district and
send the deposit and filing to that central collector who will then be responsible for
forwarding the tax to the employees’ respective resident jurisdictions.
Tax Rates
If the tax rate for the employee’s resident municipality is different than the nonresident rate for their worked-in municipality, employers will be required to withhold
the higher of the two rates.
Tax Collection Districts (TCDs)
Under Act 32, the current earned income tax collection process has been
restructured to create county-wide Tax Collection Districts. These new districts have
boundaries that are congruent geographically with current county lines, unless there
is a school district that overlaps county boundaries. If a school district crosses a
county line, the school district and its component municipalities are kept whole and
are included in the county where the affected municipalities have the greatest
population.
There is no longer the possibility of different collectors for a school district and
municipality (previously referred to as a split collector) and there is longer the
possibility of a resident-only collector or courtesy withholding.
Act 32 provides for one EIT tax office (collector) for each county, other than
Philadelphia. It has resulted in a reduction of local EIT collectors from 560 to 19.
7
Local Tax Overview
A Map of the Tax Collection Districts
Source: www.censusfinder.com, 2014
The map above shows the 69 counties or Tax Collection Districts in Pennsylvania.
Berks County, also known as the Berks Tax Collection District, has been
highlighted.
Below is Berks County. Within this county are several townships and boroughs, also
known as Political Subdivisions (PSD). Among them is Tilden Township, highlighted
below.
Source: www.co.berks.pa.us, 2014
8
Local Tax Overview
Withholding and Reporting
Once it’s been determined where employees are working and living, the withholding
and remitting is based upon the higher of those two rates. The table below displays
how withholding and remitting might look, along with the Political Subdivision (PSD)
codes for three employees who work in Tilden Township
Employee
Work PSD
John
Tilden Twp
060905
Mary
Tilden Twp
060905
Joe
Tilden Twp
060905
Work
Rates
Res –
1.00%
NonRes –
1.00%
Res –
1.00%
NonRes –
1.00%
Res –
1.00%
NonRes –
1.00%
Resident
PSD
Tilden
Twp
060905
Resident
Rates
1.00%
East
1.50%
Union
Twp
400513
Bern Twp 1.00%
061401
Withholding Remitted
Rate
to:
1.00%
Tilden Twp
(Berks)
1.50%
Tilden Twp
(Berks)
1.00%
Tilden Twp
(Berks)
While John, Mary, and Joe all work in Tilden Township, Mary and Joe live in
different municipalities and Mary’s resident rate is higher than Tilden Township’s
nonresident rate. Therefore, the employer would be required to withhold 1.5% from
Mary and remit it to the collector for Tilden Township.
9
Local Tax Overview
Political Subdivision (PSD) Codes
These six-digit numeric codes have been formulated to designate each of the 69 tax
collection districts, along with the school districts and municipalities therein. Act 32
requires that employers and tax officers utilize PSD codes prescribed by the
Department of Community and Economic Development (DCED). PSD Codes have
been designed to identify the municipalities and school districts for each tax
collection district and aid in ensuring that employee Earned Income Tax
withholdings are remitted and distributed to the proper taxing authority.
The first two digits of these six-digit codes represent the tax collection district, the
next two digits represent the school district and the last two digits represent the
political subdivision. For example, the PSD code for the example we’ll be looking at
in the Pennsylvania website for Tilden Township is 060905.
06
Berks County
09
Hamburg S.D.
05
Tilden Township
When quarterly filings are remitted to the worked-in tax collector, employee wage
detail will be included which should provide the PSD code of the work location and
the PSD code for each employee’s home location.
A list of these codes is available on www.newpa.com and that link is:
http://dced.pa.gov/local-government/local-income-tax-information/psd-codes-andeit-rates/
These can also be found on the Pennsylvania Municipal Statistics Website
http://munstats.pa.gov/Public/FindLocalTax.aspx/
The work location PSD code will be reported based on the ADP local tax code that
is set up for you. The resident PSD code will come from your quarter file and that
process will be reviewed later in this handout.
10
Local Tax Overview
Residency Certification Form
Employers are required to obtain a completed Certificate of Residency form from
each of their employees. This form is provided by the Pennsylvania Department of
Community and Economic Development. This form can be downloaded from:
http://www.hab-inc.com/wp-content/uploads/Residency-Certification-Form-DCEDCLGS-32-6-8-11.pdf
If an employee is not indicating their actual home address on the form, the
employer should still use the employee’s home PSD code when filing.
Tax collectors may reject or suspend money for employees with missing information
such as social security numbers or addresses.
11
Local Tax Overview
Pennsylvania Municipality Web Site
This website can assist an employer with locating a PSD and the tax collector by
using an employee’s home address, the work location address, or both.
This site can be access from the Local Tax Locator home page on at
http://www.adp.com/tools-and-resources/compliance-connection/compliance-localtax-locator.aspx as shown below.
It can also be accessed directly at http://munstats.pa.gov/Public/FindLocalTax.aspx/
12
Local Tax Overview
From the window below, type the employee’s home and work addresses in the
sections marked accordingly and click the “View Information” button.
13
Local Tax Overview
The window below will open, displaying the employee’s resident earned income tax
rate, their work location nonresident rate, and the PSD codes for each. Also
displayed at the bottom are the collectors for the Earned Income Tax and the Local
Services Tax.
In this example, the employee lives in Bern Township and has a resident earned
income tax rate of 1.00%. They work in Tilden Township which has a nonresident
earned income tax rate of 1.00%. The employer in this situation would be required
to withhold 1.00% from this employee and remit it to the tax collector for Tilden
Township, which in this case is Berks Earned Income Tax Bureau.
For the earned income tax, there is a registration form that employers must
complete for all work locations. The form can be located at www.newpa.com and
here’s a link to that form: http://www.hab-inc.com/wpcontent/uploads/EmployersRegistrationFormCLGS32-48-11.pdf
14
Local Tax Overview
Finding the ADP Local Code
As we saw in the example used for the Pennsylvania Municipality web site, the
employer’s business was in Tilden Township. The employee lives in Bern
Township.
From the ADP Local Tax Code Locator shown below, (1) select Pennsylvania from
the State dropdown menu, (2) type the name of the locality in the Local box, then
(3) click Go. Below we located the worked-in locality from our previous example.
The PSD code is also displayed in the comments to confirm that this is the same
locality found in Pennsylvania’s website.
The screen below displays the lived-in local, Bern Township, from our previous
example.
15
Local Tax Overview
16
Local Tax Overview
Nonresident Rates
There are municipalities which impose a different rate for nonresidents working
there. For example, the City of Reading has a 3.6% for residents and a 1.3% rate
for nonresidents. If an employee works in Reading, but lives outside of Reading, the
employer would withhold either the 1.3% Reading nonresident rate or the
employee’s resident rate, whichever is higher. The nonresident employee would not
be subject to the 3.6% rate, which is only for residents. In the example below, the
employee is a resident and would be subject to the full 3.6% resident rate.
When local codes like this are viewed on the ADP Local Tax Code Locator, the
nonresident rate will not display. However, for ADP payroll systems utilizing these
codes to set up employee deductions, the nonresident rate is programmed so that
the correct rate will be deducted when compared to the employee’s resident local
rate. So any employees working in Reading should be set up with a work location
local code of 5281.
17
Local Tax Overview
Pittsburgh
Pittsburgh Earned Income Tax
The Pittsburgh Earned Income Tax became part of Act 32 was effective January 1,
2012 and is collected by Jordan Tax Services. Residents of Pittsburgh are subject
to a 3.0% earned income tax (1.0% for the city and 2.0% for the school district).
Nonresidents of Pittsburgh are subject to either the 1.0% nonresident rate, or the
rate for the municipality in which they live, whichever is higher. The 2.0% school
district portion of the Pittsburgh Earned Income Tax does not apply to nonresidents
working there.
Pittsburgh Payroll Expense Tax
The Pittsburgh Payroll Expense Tax is a quarterly tax that is levied on employers
and is separate from the Pittsburgh Earned Income Tax referenced above. It is
levied at .55% of the gross payroll of a business located in the city or a business
that has income producing activities within the city.
Depending on which Pittsburgh earned income taxes are being withheld from
employees, ADP has local tax service codes which combine the earned income tax
and the payroll expense tax. For ADP payroll systems utilizing the ADP Local Tax
codes to set up employee deductions, the codes below are to be used for the
worked-in local.
PSD
Local Tax
Code(s) Code(s)
Taxes Calculated
Appropriate Use
700102
5839
Employee
withholding and
Employer Expense
For employees who live and work in
Pittsburgh and are residents of the
Pittsburgh School District
730105
5837
Employee
withholding and
Employer Expense
For employees who live and work in
Pittsburgh and are residents of the
Baldwin Whitehall School District
700102
5838
Employee
withholding and
Employer Expense
For employees working in Pittsburgh
but living in a state other than PA
For more information: http://pittsburghpa.gov/finance/info
http://apps.pittsburghpa.gov/finance/2016_ET-1.pdf
or:
http://jordantax.com/
18
Local Tax Overview
Philadelphia
Philadelphia is the only jurisdiction in Pennsylvania which is not part of the Act 32
requirements.
Philadelphia is a worked-in and lived-in local tax city. Employees that work in
Philadelphia are subject to Philadelphia local tax. Residents of Philadelphia are also
subject to this tax.
For ADP payroll systems utilizing the ADP Local Tax codes to set up employee
deductions, the codes below are to be used.
Local Tax Code(s)
3912 – worked in
local
Appropriate Use
For employees who work and live in
Philadelphia
3901 – lived in local
3912 – worked in
local
For employees who work in Philadelphia and
live in another Pennsylvania local
n/a – lived in local
3912 – worked in
local
For employees who work in Philadelphia and
live in another state
n/a – lived in local
Worked jurisdiction
code – worked in
local
For employees who work in another
Pennsylvania local and live in Philadelphia
3901 – lived in local
Employer is not
required to withhold
and remit to
Philadelphia*
For employees who work out of state and live in
Philadelphia
Note: if your company has a presence in PA, you
will be required to withhold for any residents.
*Note, even though the resident employee may work out of state, if an employer
has other employees working in Pennsylvania, Philadelphia will hold that employer
responsible for withholding their tax from any residents, regardless of where they
work.
Zip codes that begin with “191” are Philadelphia zip codes and the city will look at
any zip codes that begin with those numbers that do not have any withholding.
For more information: http://www.phila.gov/revenue/
19
Local Tax Overview
Tax Collectors and Districts
District
PSD
Code
03
04
08
10
11
13
19
20
24
25
32
33
35
37
39
40
42
43
45
46
49
52
53
54
57
58
55
60
61
62
64
65
66
Tax Collection District
Armstrong Tax Collection District
Beaver Tax Collection District
Bradford Tax Collection District
Butler Tax Collection District
Cambria Tax Collection District
Carbon Tax Collection District
Columbia Tax Collection District
Crawford Tax Collection District
Elk Tax Collection District
Erie Tax Collection District
Indiana Tax Collection District
Jefferson Tax Collection District
Lackawanna Tax Collection District
Lawrence Tax Collection District
Lehigh Tax Collection District
Luzerne Tax Collection District
McKean Tax Collection District
Mercer Tax Collection District
Monroe Tax Collection District
Montgomery Tax Collection District
Northumberland Tax Collection District
Pike Tax Collection District
Potter Tax Collection District
Schuylkill Tax Collection District
Sullivan Tax Collection District
Susquehanna Tax Collection District
Snyder Tax Collection District
Union Tax Collection District
Venango Tax Collection District
Warren Tax Collection District
Wayne Tax Collection District
Westmoreland Tax Collection District
Wyoming Tax Collection District
Tax Collection Agency,
Bureau, or Office
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
Berkheimer
20
Local Tax Overview
District
PSD
Code
06
07
12
29
31
34
50
56
21
47
27
28
70
73
18
71
72
05
09
15
16
17
22
23
30
38
48
59
63
36
44
26
14
41
01
67
Tax Collection District
Tax Collection Agency,
Bureau, or Office
Berks Tax Collection District
Blair Tax Collection District
Cameron Tax Collection District
Fulton Tax Collection District
Huntingdon Tax Collection District
Juniata Tax Collection District
Perry Tax Collection District
Somerset Tax Collection District
Cumberland Tax Collection District
Montour Tax Collection District
Forest Tax Collection District
Franklin Tax Collection District
Allegheny Central Tax Collection Dist.
Allegheny Southwest Tax Collection D
Clinton Tax Collection District
Allegheny North Tax Collection Dist.
Allegheny Southeast Tax Collection D
Bedford Tax Collection District
Bucks Tax Collection District
Chester Tax Collection District
Clarion Tax Collection District
Clearfield Tax Collection District
Dauphin Tax Collection District
Delaware Tax Collection District
Greene Tax Collection District
Lebanon Tax Collection District
Northampton Tax Collection District
Tioga Tax Collection District
Washington Tax Collection District
Lancaster Tax Collection District
Mifflin Tax Collection District
Fayette Tax Collection District
Centre Tax Collection District
Lycoming Tax Collection District
Adams Tax Collection District
York Tax Collection District
Berks Earned Income Tax
Blair County Tax Bureau
Cameron County Tax Bureau
Capital Tax Collection Bureau
Cumberland County Tax Bureau
Danville Area EIT Office
Forest County Tax Assess. Ofc.
Franklin County Area Tax Bureau
Jordan Tax Service
Jordan Tax Service
Keystone Central SD Tax Office
Keystone Collections Group
Lancaster County Tax Bureau
Miffco Tax Service, Inc.
Southwest Regional Tax Bureau
State College Borough
Williamsport Area SD Tax Ofc
York Adams Tax Bureau
York Adams Tax Bureau
21
Local Tax Overview
Pennsylvania Local Services Tax
Quick Tips
Type of tax: Political Subdivision or Municipality
Based on: Where an employee works
Paid by: Employees
In addition to the Earned Income Tax (EIT), many Pennsylvania localities also
impose a Local Services Tax (LST), formerly known as the Occupational Privilege
Tax (OPT) or Emergency Municipal Services Tax (EMST). All employers with work
sites within the taxing jurisdiction are required to deduct the LST from their
employees at the site of employment. The total LST paid by any taxpayer in a
calendar year remains limited to $52, regardless of the number of political
subdivisions in which an individual works during the year. Employees who earn less
than $12,000 are exempt from the tax in jurisdictions that levy an LST at a rate that
exceeds $10.
If the LST exceeds $10, the tax must be assessed and collected on a pro-rata basis
determined by the number of payroll periods established by an employer for a
calendar year. The pro-rata share of the tax assessed on each taxpayer for a
payroll period is calculated by dividing the combined rate of the LST by the number
of payroll periods established by the employer for the calendar year. For instance, a
$52 tax would be collected at $1 per week for taxpayers paid weekly. Employers
are only required to withhold the LST on a payroll period basis for those payroll
periods in which the taxpayer is employed.
Employers must remit withheld taxes to the designated tax collector 30 days after
the end of each calendar quarter.
22
Local Tax Overview
For more information on this and other Pennsylvania taxes, go to www.newpa.com.
Click the search icon near the top right of the home page, type “LST” in the search
box, and click Go.
Below you will find information on this tax, as well as links to related resources.
23
Local Tax Overview
Ohio
Quick Tips
Type of tax: City
Paid by: Employees
The local taxes for Ohio localities are worked-in and lived-in taxes. The primary
obligation of employers is to withhold and remit the taxes to the cities in which
employees work. There are also cities that require resident taxes. In most cases,
the employer is not obligated to withhold those (except for Ohio School District
taxes). For an online directory of Ohio localities, see
http://columbus.gov/IncomeTaxDivision/TaxMunicipalities/
If an employee works and lives in the same city, then they are only subject to that
city’s tax at the full rate and the employer would be required to withhold that tax.
If an employee lives in a jurisdiction other than the one in which they work and if
that jurisdiction also imposes a local tax, the employer can choose to withhold that
tax as a courtesy to the employee or choose not to withhold that tax, making the
employee responsible for paying that resident tax.
If the employer chooses to withhold the lived-in tax, then many resident cities allow
a credit based on what is being withheld for the worked-in city. There are three
possibilities:



Full Credit (allowing the full worked-in rate to be applied to the resident rate)
Partial Credit (allowing only a portion of the worked-in rate to be applied to
the resident rate)
No Credit (the resident city requires its full rate from their residents,
regardless of what they may pay to where they work
On the next few pages, examples of each of these possibilities will be reviewed. In
each of these scenarios, it’s important to note that the proper use of ADP Local Tax
codes is very important. For each Ohio local, you will see one Primary local code
and at least one Alternate or Alt code. When mapping your employees, the rule to
follow for Ohio locals is:
Primary Code = Worked-in; Alternate Code = Lived-In
24
Local Tax Overview
Full Credit Allowed – most cities in Ohio allow full credit to their residents who
work and pay a tax in a different city.
Work-in Local Code
Lived-in Local Code
Notice that the
Comments section
under this local code
does not reference any
credit. This means that
this jurisdiction allows
full credit.
So if an employee works in Wauseon and lives in Holland, the calculation and local
codes would work like this:
Worked-in City
Wauseon (6323)
Rate
1.50%
Resident City
Holland (6677)
Apply full worked-in credit
Total Resident Rate
Rate
2.25%
-1.50%
.75%
Total for Both Cities
2.25%
25
Local Tax Overview
No Credit Allowed – Some cities in Ohio do not allow any credit to be taken. This
means that the employee will have to pay the full rate to their lived-in city,
regardless of what they pay to where they work. The comment below will be
displayed on the Local Tax Locator.
So if the employee works in Stryker (Local Code 6295) and lives in South
Bloomfield, the calculation would work like this:
Worked-in City
Stryker (6295)
Rate
1.50%
Resident City
South Bloomfield (4183)
Total Resident Rate
Rate
1.00%
-0.00%
1.00%
2.50%
On the Local Tax Locator, the alternate (alt) code displayed for South Bloomfield is
4183. The rate reflected for that code is 0.25% as shown above. While that rate
appears to be incorrect, the alternate code should still be set up for the resident or
lived-in tax if they exist. For ADP payroll systems utilizing the ADP Local Tax codes
for employee deductions the correct rate will be calculated regardless of what is
displayed here. So this employee would be coded to 6295 for their worked-in tax
and 4183 for their resident tax.
In some cases, alternate codes are no longer available for jurisdictions that do not
allow a credit. Therefore, if no alternate code appears, a primary code would be
used for the employee’s lived-in local.
26
Local Tax Overview
Partial Credit Allowed – Some cities in Ohio allow partial credit based on what is
withheld for the worked-in city. The comment below indicates this scenario.
So if the employee works in Gates Mills (Local Code 6110) with a rate of 1.00% and
lives in Mayfield Heights, the calculation would work like this:
Worked-in City
Gates Mills (6110)
Rate
1.00%
Resident City
Mayfield Heights (6633)
Total Resident Rate
Rate
1.00%
-0.50%
0.50%
1.50%
So local code 6110 would be used for the worked-in city and local code 6633 would
be used for the resident city.
If a situation arises in which multiple alternate codes display on the Local Tax
Locator, contact your ADP Payroll Representative. They’ll be able to verify which of
these local codes is available for you to use in your payroll system.
27
Local Tax Overview
Primary Codes and Alternate Codes in Ohio
In the previous pages, we have discussed the use of Primary local tax codes and
Alternate local tax codes in ADP’s system. Now, let’s review why the use of the
appropriate codes is important.
The rule to follow when setting up ADP local codes is:
Primary Code = Worked-in; Alternate Code = Lived-In
The filing forms for many Ohio localities have sections to report employment or
worked-in wages and sections to report resident or courtesy withholding. ADP’s
primary codes are programmed so that any wages coded to a primary code will be
reported in the employment wage fields and wages coded to an alternate code will
be reported in the resident withholding fields.
Below is an example of how an Ohio local tax return might look. The wages for
employees coded to a primary code would display in the “Workplace Wages” field.
The full rate would also display in the “Workplace Tax Rate” field and the tax
withheld would display in the “Workplace Tax Withheld” field. For employees coded
to an alternate code, only the tax withheld would display in the “Residence Tax
Withheld” field. This would make it clear to the tax collector that resident tax is being
withheld as a courtesy. And if a credit is being taken, the agency would not expect
the full tax rate to be withheld.
If resident wages get reported under a primary code, the filing would incorrectly
reflect those wages as Workplace Wages and the agency would then expect the full
tax rate to be withheld. This is why the correct use of Primary and Alternate codes
is so important.
28
Local Tax Overview
Cincinnati
While the guidelines we just reviewed for primary and alternate codes apply to most
cities in Ohio, Cincinnati is an exception to this.
Cincinnati not only requires that all employees working in their city have the full rate
withheld and remitted to that city, they also require that employers make a
distinction between resident and nonresident employees who work there.
As a result, an alternate code would be used for employees working in Cincinnati
who live outside of the city.
Local code 3602 is the code to use for employees who both work and live in
Cincinnati.
And although local code 0672 is an alternate code, it is the code to use for
employees who work in Cincinnati and live outside of Cincinnati. Having this
separate “worked-in” code indicates that nonresident employees working in the city
will be distinguishable from other employees on the filing.
A separate Cincinnati Alt code will be available in your payroll system for any
resident courtesy withholding you may have for employees who work in other cities
and live in Cincinnati and your ADP Payroll Representative can assist you with
selecting the correct code.
Residents Working in Cincinnati
Nonresidents Working in Cincinnati
29
Local Tax Overview
Ohio Website
This website can assist an employer with locating the correct municipality based on
the employee’s work or home address. It also contains information on the school
district tax, which will be discussed in more detail on page 33.
This site can be accessed from the Local Tax Locator home page by clicking on the
link Ohio Tax Finder (shown below). This site can also be accessed directly at:
http://www.tax.ohio.gov/online_services/thefinder.aspx
30
Local Tax Overview
From the screen below, click Municipal Tax.
From the screen below, click Address.
31
Local Tax Overview
From the screen below, type in the desired address, then click Lookup.
The screen below will display the address that was input, the address that was
found, and the municipal tax which applies. In this example, a Cincinnati address
was used, but the municipal income tax is for Fairfax.
32
Local Tax Overview
Ohio School District Taxes
Quick Tips
Type of tax: School District
Based on: Where an employee lives
Paid by: Employees
Many school districts in Ohio have taxes. The Ohio State Income Tax Department
collects these taxes, but they are not filed with the state income tax. These are
based on where the employee lives. However, unlike other resident taxes in Ohio,
employers are required to withhold any applicable school district taxes from their
employees. Also, school districts do not allow credits based on the tax rate where
the employee works. Therefore, the full rate must always be paid.
To determine which school districts your employees live in, they should complete a
Form IT-4 Employee’s Withholding Exemption Certificate.
http://www.tax.ohio.gov/portals/0/forms/employer_withholding/Generic/WTH_IT4.pdf
Not every school district has a tax. Elections are held twice a year (May and
November), and in these elections, voters decide on enacting any new school
district taxes or repealing any existing school district taxes. Any new taxes or
repeals would not go into effect until January 1 of the following year. To verify, the
Ohio website referenced on the prior pages can be used.
From the screen above, click School District Income Tax.
33
Local Tax Overview
To search for a specific address, click Address from the screen below. A complete
list of all school district taxes can also be accessed by clicking the link County and
School District.
Type in the employee’s address as shown below and click Lookup.
34
Local Tax Overview
The screen below will display the address that was input, the address that was
found, and the municipal tax which applies. In the example below, the employee
would be subject to the Dalton Local School District (LSD) tax of 0.75%.
Here is how this school district would appear on the ADP Local Tax Locator. The
local tax code is 4397.
35
Local Tax Overview
Michigan
Quick Tips
Type of tax: City
Paid by: Employees
The local taxes in Michigan are both worked-in and lived-in. An employer who has a
location or is doing business in a city with a tax is required to withhold that tax from
all employees working there and in some cases, may also be required to withhold
from any employees who are residents, regardless of where they are working. If an
employee lives in a jurisdiction that also imposes a local tax, and the employer has
no business in that city, the employer may choose to withhold that tax as a courtesy
to the employee or choose not to withhold that tax, making the employee
responsible for paying that resident tax.
If an employee works and lives in different localities and if both impose a tax, then
both jurisdictions will allow a credit. Also, most cities impose a lower rate on
nonresidents working in their city, regardless of where the employee works.
The following table further describes employer responsibility in Michigan:
If an
employee
the employee
will pay
Example
Using Local
Code(s)
Lives and works in
the same city
the full rate to the
lived-in city.
Works in Albion
and Lives in Albion
Pays 1.00% to Albion
(Local Code 2313)
Lives in a different
city than the
worked-in city
½ of the worked-in
city rate and ½ of the
lived-in city rate to
the lived-in city
(possible exception).
Works in Battle Creek
but Lives in Jackson
(½ of Battle Creek’s
rate and ½ of
Jackson’s rate)
Battle Creek 0.5%
(Local Code 2321)
Jackson
0.5%
(Local Code 2335)
Total = 1.00%
Lived-in city tax
rate is greater
than the worked-in
city tax rate
½ of the worked-in
city rate and the
difference to the
lived-in city to equal
the FULL lived-in city
rate.
Works in Flint but
Lives in Saginaw
(½ of Flint’s rate,
subtract that ½ from
Saginaw’s rate)
Flint
0.5%
(Local Code 2337)
Saginaw
1.0%
(Local Code 2349)
(1.5% - 0.5% paid to
Flint)
Total =1.5%
Worked-in city tax
rate is greater
than the lived-in
tax rate
½ of the worked-in
tax rate to the
worked-in city and at
least ½ to the lived-in
city.
Works in Saginaw but
Lives in Flint
(½ of Saginaw’s rate
and ½ of Flint’s rate)
Saginaw
0.75%
(Local Code 2333)
Flint
0.5%
(Local Code 2337)
Total = 1.25%
36
Local Tax Overview
Michigan Cities with an Income Tax
Albion
Battle Creek
Big Rapids
Detroit
Flint
Grand Rapids
Grayling
Hamtramck
Highland Park
Hudson
Ionia
Jackson
Lansing
Lapeer
Muskegon
Muskegon Heights
Pontiac
Port Huron
Portland
Saginaw
Springfield
Walker
For a listing of local websites in Michigan, visit:
http://www.statelocalgov.net/state-mi.cfm
37
Local Tax Overview
Indiana
Quick Tips
Type of tax: County
Based on: Where an employee lives
Paid by: Employees
Employers in the state of Indiana are required to withhold the Indiana County tax from
any employee living within an adopting county as of January 1. If an employee resides
out of state, but works in an Indiana adopting county, he or she is subject to the
nonresident rate for the county in which they work. Note: As of October 1, 2013, all
counties in Indiana have adopted a tax.
Reporting of wages and taxes to each county has been an agency requirement for
several years. However, until the agency implemented system enhancements in recent
years, notices were generated at the end of the year after annual reconciliations were
received and posted. The agency system now provides visibility of these discrepancies
on a monthly basis; therefore, the agency is issuing notices more frequently.
These county taxes are collected by the state and remitted with the Indiana state
income tax. As a result, the tax identification number assigned to an employer for the
state income tax will be the same number assigned for the county tax.
This tax is withheld based on where the employee lived as of January 1. If an employee
moves to a different county after January 1, the employer should continue to withhold
based on the previous county until January 1 of the following year.
If an employee moves to Indiana from out of state after the 1st of the year, then the
employer is not required to withhold any county tax until Jan. 1 of the next year.
However, if the employee comes from another employer after the 1st of the year and
lived in Indiana from the beginning of the year, the new employer is required to begin
withholding the county tax immediately.
For more information visit: http://www.in.gov/dor/3343.htm
38
Local Tax Overview
To verify which county an employee resides in, all employees must complete Form
WH-4 Employee’s Withholding Exemption and County Status Certificate (shown
below).
This form can be found on Indiana’s website in the Withholding Tax Forms section:
http://www.in.gov/dor/4100.htm
39
Local Tax Overview
Kentucky
Quick Tips
Type of tax: City, County and/or School District
Paid by: Employees
The local taxes in Kentucky are primarily worked-in. Most of the taxes are license
fees for working in the cities and counties of Kentucky. Employers are required to
withhold taxes on wages that are earned in the local taxing jurisdiction There are
some jurisdictions that do require resident taxes, but only if the resident also works
in that jurisdiction.
Many cities in Kentucky fall within counties that have their own tax. As a result, the
City code AND the County code must be established in these situations. Kenton
County in particular collects for many cities within that county. Therefore, they are
particularly sensitive about filings that include city wages and taxes that were not
included as county wages and taxes on their return.
http://www.kentoncounty.org/residentsMain/occupational_license/index.php
An exception to the rule above about city and county taxes is when a county in
Kentucky has enacted a tax after a city tax was already enacted. In that situation,
the employee is only subject to the city tax and not the county. The cities currently
in this situation are:
City
County
Ashland
Berea
Bowling Green
Camargo
Coal Run
Elkhorn City
Frankfort
Jeffersonville
Mayfield
Mt. Sterling
Owensboro
Paducah
Pikeville City
Richmond
Shelbyville
Winchester
Boyd
Madison
Warren
Montgomery
Pike
Pike
Franklin
Montgomery
Graves
Montgomery
Daviess
McCracken
Pike
Madison
Shelby
Clark
To locate additional Kentucky local tax information, go to:
http://app.sos.ky.gov/occupationaltax/
40
Local Tax Overview
Louisville/Jefferson County
Louisville is a city located in Jefferson County. These jurisdictions have been
merged and are now considered the Louisville Metro area.
Residents of Louisville Metro are subject to three taxes:
 Louisville Metro License fee
 Transit Authority tax
 School Boards tax
Total
1.25%
.20%
.75%
2.20%
Non-Residents of Louisville Metro are subject to two taxes:
 Louisville Metro License fee
 Transit Authority tax
Total
1.25%
.20%
1.45%
The following table further describes employers’ responsibility in
Louisville /Jefferson County:
If an employee
works
and lives
then the employer must
withhold
using Local
Code
in Louisville Metro
in Louisville Metro
the tax using the resident
rate.
1801
In Louisville Metro
outside of Louisville
Metro
the tax using the non-resident
rate.
1861
In addition to Louisville, four other cities with Occupational License Fees are also
located in Jefferson County. Therefore, employees performing work in any of these
cities would also be subject to the Louisville Metro taxes. Those cities are:




Jeffersontown
Shively
St. Matthews
West Buechel
41
Local Tax Overview
For more information visit: http://louisvilleky.gov/government/revenuecommission/regulations-and-ordinances
To determine whether or not a business or employee is located within the Louisville
Metro area, click the “Map It” link in the Resource Center section of the website:
Type in the address and click Go. Click the General Information area to view the
city as shown below.
42
Local Tax Overview
Boone County
Boone County includes the cities of Florence, Walton, and Union, and
the unincorporated areas of Boone County which include Hebron, Burlington,
Petersburg, Verona, Richwood, parts of Erlanger, Independence, Crittenden, and
other areas of the county not specifically referenced.
All employees working in Boone County are required to pay the Ordinance Tax and
the Mental Health Tax. Residents who work in Boone County are also required to
pay the Board of Education Tax.
Boone County Ordinance Tax
.8% of an employee’s gross earnings
up to a maximum wage limit (changes
each year)
Boone County Mental Health
Tax
up to a maximum of $16,666.00.
Boone County Board of
Education tax
with no maximum.
Boone County has two rates; they are:

1.45% for residents which includes all three taxes listed above. The local
code which combines these is 1935.

.95% for non-residents which includes all taxes except the Board of
Education tax. The local code which combines these is 1814.
Note: If an employee lives in Boone County, but does not work there, they are not
subject to any of these taxes.
For more information visit: http://www.boonecountyky.org/finance/ocl.aspx
43
Local Tax Overview
Florence
Florence is a city within Boone County that taxes everyone who works there.
Employees working in Florence must pay a tax of 2.00 %. The local code for this tax
is 1812. For more information, visit: http://www.florence-ky.gov/occupationallicense-information-0
Walton or Verona
Businesses and employees working or living in Walton or Verona are located in
Boone County, and are possibly exempt from the school tax. If the employee school
taxes are paid to the Independent School District, the employee should have the tax
withheld at the non-resident rate using local code 1814.
Erlanger
Most of Erlanger, Kentucky, lies within Kenton County. However, there are several
streets which cross over into Boone County. Employers located in Erlanger should
verify which county their business or employees are in. Boone County has a street
index on their website which can assist employers and employees in determining
which county they are in. http://www.boonecountygis.com/StreetIndex.aspx
44
Local Tax Overview
The table below describes the rules for Boone County and surrounding cities. It
shows only the combined codes for Boone County, but note that the 3 separate
codes referenced on the previous page can be substituted as necessary:
If an employee
lives
and works in
then the employer
should withhold
Using Local
Code
in Boone County
(not including
Florence)
Boone County
Boone County resident tax
1935
in Boone County
(not including
Florence)
Florence
Florence and Boone County
resident tax
1812 & 1935
in Florence
Boone County (not
including
Florence)
Boone County resident tax
1935
in Florence
Florence
resident tax
1812 & 1935
outside of Boone
County
Boone County (not
including
Florence)
Boone County non-resident
tax
1814
outside of Boone
County
Florence
non-resident tax
1812 & 1814
Walton or Verona
(pay school tax to
the Independent
School District
Boone County
Boone County non-resident
tax
1814
45
Local Tax Overview
Georgetown/Scott County
Georgetown is a city located in Scott County. If the business is located in
Georgetown, then the taxes must be withheld accordingly.
Residents of Scott County, working in Georgetown are subject to three taxes:
 Georgetown
 Scott County
 Scott County School District
Total
1.00%
1.00%
.50%
2.50%
Non-Residents of Scott County, working in Georgetown are subject to two
taxes:
 Georgetown
 Scott County
Total
1.00%
1.00%
2.00%
The following table further describes an employers’ responsibility in
Georgetown and Scott County:
If an employee
works
and lives
withhold
using Local
Code(s)
in Georgetown
In Scott County
Georgetown, Scott County,
and Scott County S.D.,
2150
in Georgetown
outside of Scott
County
Georgetown and Scott
County
2149
in Scott County
(not in
Georgetown)
in Scott County
Scott County and Scott
County S.D.
2151
in Scott County
(not in
Georgetown)
outside of Scott
County
Scott County
1873
For more information, visit: http://www.gscrevenue.com/
46
Local Tax Overview
Lexington/Fayette County
Lexington is a city in Fayette County. The Occupational License fee for this
jurisdiction combines both the city and county into one tax. Employers doing
business in Lexington/Fayette must withhold 2.25% from all employees working
there. Also, if an employee lives in Fayette County, the employer must also withhold
the Fayette County Public School District Tax of 0.5%.
Residents of Fayette County, working in Lexington/Fayette are subject to two
taxes:


Lexington/Fayette
Fayette County Public School District
Total
2.25% Local Code 1804
2.75%
Non-Residents of Fayette County, working in Lexington/Fayette are subject to
one tax:

Lexington/Fayette
For more information on the Lexington/Fayette tax, visit:
http://www.lexingtonky.gov/index.aspx?page=169
For more information on the Fayette County Public School Tax, visit:
http://www.fcps.net/tax/
47
Local Tax Overview
Alabama
Quick Tips
Type of tax: City and/or County
Paid by: Employees
The local taxes for Alabama localities are worked-in taxes. The taxes are paid to the
cities in which employees work. A large majority of the local taxes in Alabama are
occupational taxes or occupational license fees.
Employers are required to withhold taxes on wages that are earned in the local
taxing jurisdiction.
Currently there are 30 cities which impose this tax and Macon County and those are
listed below.
For a list of Alabama Municipal Revenue Officers, go to:
http://www.amroa.com/roster.htm
ATTALLA
AUBURN
BEAR CREEK
BEAVERTON TOWN
BESSEMER
BIRMINGHAM
BRILLIANT
FAIRFIELD CITY
GADSDEN
GLENCOE
GOODWATER
GUIN
HACKLEBURG
HALEYVILLE
HAMILTON
LEEDS CITY
LEEDS CITY
LYNN TOWN
MACON COUNTY
MIDFIELD CITY
MOSSES TOWN
NOTASULGA
OPELIKA
RAINBOW CITY
RED BAY CITY
SHORTER TOWN
SOUTHSIDE
SULLIGENT
TARRANT
TOWN OF WADLEY
TUSKEGEE
48
Local Tax Overview
Colorado
Quick Tips
Type of tax: City
Paid by: Employees and Employers
Colorado is a worked-in tax state. The taxes in Colorado are called “head taxes”.
A head tax means a flat amount per employee. There are currently five cities in
Colorado that impose a tax.





Aurora
Greenwood Village
Denver
Glendale
Sheridan
Unlike the taxes in other states, local taxes in Colorado are flat dollar amounts that
become due after an employee has earned a certain amount in a month.
Additionally, both employees and employers in these cities are responsible for
paying the taxes.
Aurora (0603)
and
Greenwood Village
(0602)
Denver (0601)
In Aurora and Greenwood Village, both the employee
and employer pay $2.00 per month after the employee
has earned $250.00 in any given month.
http://www.auroragov.org
(departments>finance>taxes &
licenses>taxes>occupational privilege tax)
http://www.greenwoodvillage.com/index.aspx?NID=12
20
In Denver, the employee must pay $5.75 per month
while the employer pays $4.00 per month after the
employee has earned $500.00 in any given month.
http://www.denvergov.org
Glendale (0608)
In Glendale, both the employee and the employer pay
$5.00 per month after the employee has earned
$750.00 in any given month.
http://www.glendale.co.us/
Sheridan (0609)
In Sheridan, both the employee and the employer pay
$3.00 per month after the employee has earned
$500.00 in any given month.
: http://www.ci.sheridan.co.us/index.aspx?NID=288
49
Local Tax Overview
Delaware
Quick Tips
Type of tax: City
Based on: Where an employee works and/or lives
Paid by: Employees
There is currently only one local tax in Delaware for Wilmington, and it is a workedin and lived-in local tax. The local code for this tax is 0801.
Employees that work in Wilmington are subject to Wilmington local tax. Residents of
Wilmington are also subject to this tax.
The table below describes the employer’s responsibility for local taxes in Delaware:
If an employer is
and employees live
located in Wilmington
in Wilmington
outside of Wilmington
outside of Delaware
located in Delaware
other than Wilmington*
in Wilmington
is located outside of
Delaware
in Wilmington
then the employer
must withhold the
Wilmington tax
must withhold the
Wilmington tax
must withhold the
Wilmington tax
must withhold the
Wilmington tax
Can choose to withhold the
tax as a courtesy
*Note, even though the resident employee may work out of state, if an employer
has a business presence anywhere in Delaware, Wilmington will hold that employer
responsible for withholding their tax from any residents, regardless of where they
work.
Helpful Websites
The Wilmington web site has an address coding guide which lists all the addresses
and streets within the corporate limits of the city of Wilmington. The address to this
guide is
http://www.ci.wilmington.de.us/home/showdocument?id=452
For more information on Wilmington visit:
http://www.ci.wilmington.de.us/residents/earned-income-tax-and-net-profits-tax
Regulations:
http://www.ci.wilmington.de.us/home/showdocument?id=462
50
Local Tax Overview
Missouri
Quick Tips
Type of tax: City
Based on: Where an employee works and/or lives
Paid by: Employees
The local taxes in Missouri are primarily worked-in taxes. Employers must withhold
taxes for wages earned in the local taxing jurisdictions. St. Louis (2602) and Kansas
City (2601) are the only two cities in Missouri that impose a local tax.
If employees are performing work in either city, the employer is required to withhold
the earnings tax.
Employers are required to withhold the tax for non-resident employees of St. Louis
or Kansas City for the percentage of time they work in the city. If an employer has a
business presence in either city, then they are required to withhold for all resident
employees of that city, regardless of whether those residents actually work in the
city.
St. Louis Payroll Expense Tax
Quick Tips
Type of tax: City
Paid by: Employers
In addition to the earnings tax, St. Louis has an employer-paid tax called the Payroll
Expense Tax. If any work is being performed in St. Louis, the employer is required
to pay this tax. The ADP local code for this is 2604.
Helpful Websites
For more information on St. Louis visit
http://dynamic.stlouis-mo.gov/collector/earnings-tax-home.cfm
For more information on Kansas City visit
http://kcmo.gov/tax/tax-home/
51
Local Tax Overview
New York
Quick Tips
Type of tax: City
Paid by: Employees
The local taxes in New York are both worked-in and lived-in. There are only two
cities that have taxes, New York City and Yonkers, and these taxes are remitted
with the State Income Tax.
The following table describes employer responsibility for New York and Yonkers
taxes:
If an employee lives
and works
In New York City
anywhere
In Yonkers
anywhere
In New York City
Yonkers
Anywhere
Yonkers
withhold
New York City resident tax.
(3301)
Yonkers resident tax
(3302)
New York City resident tax
(3301) and Yonkers nonresident tax (3304)
Yonkers non-resident tax
(3304)
These rules apply to Yonkers as well as any of the five boroughs of New York
City, which are:





Manhattan
Brooklyn
Queens
Staten Island
Bronx
Note: ADP’s Local Tax Locator reflects rates for New York City Yonkers. These
rates only apply to supplemental wages. All other wages are calculated based on
the employee’s W4 information. For more information on New York’s tax rates visit:
http://www.tax.ny.gov/bus/wt/wtidx.htm
For more information visit: http://www.tax.ny.gov/
The Withholding Tax Jurisdiction Lookup site can also be used to determine if an
address falls within New York City or Yonkers:
http://www8.tax.ny.gov/WTLR/wtlrHome
52
Local Tax Overview
Metropolitan Commuter Transportation Mobility Tax
Quick Tips
Type of tax: Transportation District
Paid by: Employers
The metropolitan commuter transportation mobility tax (MCTMT) is a tax imposed
on certain employers and self-employed individuals engaging in business within the
metropolitan commuter transportation district (MCTD). This department administers
the tax for the Metropolitan Transportation Authority. (The MCTD includes the
counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond
(Staten Island), Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and
Westchester.) The ADP local code for this tax is 3305 and on the Local Tax
Locator, it is listed as “NY Metro Commuter Trans Mobili, New York.”
The tax applies to you if:

you are located within the counties listed above

and
you are required to withhold New York State Income Tax from wages
and

if your payroll expense for the quarter:
o Is $312,500 or less, you're not subject to the MCTMT for that quarter.
o Exceeds $312,500, use the appropriate rate shown below.
Payroll expense
Over $312,500 but not over $375,000
Over $375,000 but not over $437,500
Over $437,500
MCTMT Rate
.11% (.0011)
.23% (.0023)
.34% (.0034)
Helpful Websites
http://www.tax.ny.gov/bus/mctmt/default.htm
http://www.tax.ny.gov/bus/mctmt/mctmt_changes.htm
53
Local Tax Overview
Oregon
Quick Tips
Type of tax: Transportation District
Paid by: Employers
The local taxes in Oregon are all worked-in and are employer paid. Employees are
not required to pay these taxes. They are based on a specified rate on the wages
paid for services performed within the district.
These are transportation taxes. Two of them are collected by the state and four of
them are collected separately. While these appear to be few in number, the nature
of these taxes is such that most employers will be subject to one or more of them.
They are:






Canby Transit
Lane Mass Transit (collected by the State of Oregon)
Sandy Transit
South Clackamas Transit
Tri-Met Transit (collected by the State of Oregon)
Wilsonville Transit
Helpful Websites
Canby: http://www.ci.canby.or.us/transportation/transittax.htm
Lane Mass Transit and Tri-Met Transit
https://www.oregon.gov/DOR/forms/FormsPubs/transit-payroll-taxes_211-503.pdf
Sandy: http://www.ci.sandy.or.us/transit-tax/
South Clackamas: http://www.sctd.org/tax.html
Wilsonville: : http://www.ci.wilsonville.or.us/176/Transit-Tax-Information
Oregon Worker’s Benefit Fund - (formerly known as the Worker’s Compensation
Assessment). This combines the reporting and payment of the Worker’s Benefit
Fund with reporting and collection of quarterly income tax and unemployment taxes.
The Worker’s Benefit Fund is based on actual hours worked. For employees subject
to Oregon worker’s compensation law, the fund requires employee withholding of
1.65 cents per hour, with an equal amount of 1.65 cents per hour assessed each
employer. The total amount paid is 3.3 cents per hour. For additional information,
visit https://www.oregon.gov/DCBS/Pages/wbf.aspx
54
Local Tax Overview
Additional Taxes
Here are some additional taxes. Some of these are not local taxes, but are Worker’s
Compensation taxes, for which ADP utilizes a four-digit local tax code in order to set
them up in our tax filing system.
Maryland
N/A
The local income tax, which is
calculated as a percentage of taxable
income, is included in the amount
shown in the withholding tables and is
based on where the employee lives.
Because this is included with the state
income tax, there are no local codes
to map to. The local income tax rates
for Maryland's 23 counties and
Baltimore City range between 1.25
percent and 3.2 percent.
2705
This is a local tax, paid by the ER,
which is based on wages earned
within the city of Newark. This tax is
not impounded from the client with
each payroll, but is debited one time
at the end of the quarter, following the
quarter reclose deadline.
0012
Every employer covered by the New
Mexico Worker’s Compensation Act
who has three or more employees
nationally is subject to this tax. This
tax is a fee of $4.30 per quarter ($2.30
employer portion and $2.00 employee
portion) for each employee who was
employed in New Mexico on the last
working day of the quarter.
http://individuals.marylandtaxes.c
om/incometax/localtax.asp
Withholding Guide:
http://forms.marylandtaxes.com/1
5_forms/Withholding_Guide.pdf
Newark, NJ
http://www.ci.newark.nj.us/govern
ment/departments/finance/taxforms/
New Mexico Worker’s
Comp
http://www.workerscomp.state.nm
.us/pdf/empguide.pdf
55
Local Tax Overview
Additional Taxes (cont.)
Washington Labor &
Industries Workers
Compensation
48W1
An employer or prospective employer
must provide industrial insurance
coverage for their employees.
Coverage is mandatory. Employers
can purchase coverage through the
Department of Labor & Industries
(L&I).
Under state law, a portion of the
premium due, equal to one-half of
both the medical-aid rate and
supplemental-pension assessment,
may be paid by employee
contribution. Labor & Industries does
not collect each worker’s share
directly. Instead, employers have the
option to collect their employees’
portion through payroll deductions.
The maximum payroll deduction rate
for each risk classification assigned to
your business is shown on your rate
notice
http://www.lni.wa.gov/main/ForBu
siness.asp
The premium rate paid for workers
compensation insurance is based on
the risk classification assigned and the
firm’s experience rate.
Wyoming Worker’s Comp
51W0
If an employer chooses to have a
private Worker’s Compensation plan,
then they would only file SUI to
Wyoming and they should let their
Client Service Representative know to
ensure that this is filed properly. This
tax is based on wages times the rate
for each WC class code. The agency’s
website includes a list of these class
codes. On the agency’s web site, type
“XXXX (year) WC Rates” in the search
box to locate the codes.
The client should confirm all class
codes and rates with the agency.
http://www.wyomingworkforc
e.org/
56
Local Tax Overview
U.S. Census Bureau Website
In addition to the website referenced on the prior pages, the U.S. Census Bureau
also has a website that allows a search by a specific address. The address is:
http://factfinder2.census.gov
From this site, click street address as shown below.
The window below will appear, allowing you to type in an address.
57
Local Tax Overview
After an address is entered, click Go and the window below will open. Information
such as the city, county, subdivision, and school district will display.
58
Local Tax Overview
Local Tax Quick Reference
State
EE
Paid
ER
Paid
Worked
In
Lived
In
Alabama
X
X
Colorado
X
X
X
Delaware
X
X
X
Illinois*
X
X
Indiana
X
X
Kentucky
X
X
X
Additional Information
The local taxes in Alabama
are occupational license fees
imposed on employees
working in the city or county.
The cities in Colorado impose
an occupational tax on
employees and employers
doing business in their city.
This is a flat monthly tax paid
by the employee and the
employer
The city of Wilmington
imposes a tax on employees
working or living in the city.
Employers doing business in
Wilmington must withhold it
from their employees working
there and employers in the
state of Delaware must
withhold it from any
Wilmington residents.
The city of Chicago imposes a
payroll expense tax on all
employers with fifty or more
full time employees doing
business in the city.
Eliminated effective
1/1/2014
The counties in Indiana
impose a tax on residents and
employers in the state of
Indiana must withhold it from
any Indiana residents. These
local taxes are filed with the
Indiana state income tax.
The local taxes in Kentucky
are occupational license fees
imposed by some cities and
counties. Employers doing
business in a city and/or
county must withhold the tax
from any employees working
there.
59
Local Tax Overview
State
EE
Paid
ER
Paid
Worked
In
Lived
In
Maryland
X
X
Michigan
X
X
X
X
X
X
X
X
Missouri
X
New Jersey
New York
X
X
X
X
X
X
Ohio
Oregon
X
X
The local taxes in Maryland
are withheld from residents of
the cities and counties which
impose a local tax and are
combined with the Maryland
state income tax.
The local taxes in Michigan
are imposed on employees
based on where they live
and/or work. If they work and
live in two different cities
which both impose a tax, they
are allowed a credit in each.
Kansas City and St. Louis
impose a tax on employees
working in either city or living
in either city. Employers must
withhold this tax if they are
doing business in either city.
The city of Newark imposes a
tax on employers doing
business in the city.
Employers must withhold
taxes from New York City and
Yonkers residents and from
employees working in
Yonkers.
The local taxes in Ohio are
imposed on employees
working and/or living in a city
with a tax. Many cities will
allow resident credits to
employees working and
paying tax in a different city.
The full tax rate must always
be paid to the worked-in city.
The local taxes in Oregon are
transportation taxes imposed
on employers doing business
in the state of Oregon.
Oregon also has a Worker’s
Benefit Fund which is paid by
both employees and
employers.
60
Local Tax Overview
State
EE
Paid
ER
Paid
Worked
In
Lived
In
Pennsylvania
X
X
X
X
X
West Virginia*
The Earned Income Tax is
withheld from residents based
on the higher rate between
their worked-in municipality
and their resident
municipality. It is remitted to
the tax collector where they
work and then forwarded to
their resident municipality by
the worked-in tax collector.
The Local Services tax is
withheld from employees
based on where they work.
Five cities in West Virginia
impose a weekly city service
fee (CSF) which must be
withheld from all employees
working in these cities.
*Not available for ADP Tax Filing service for ADP Payroll Clients.
For any questions related to the correct setup of a particular local tax, employers
should always contact the tax collectors directly for confirmation of their tax
withholding obligations.
The information contained herein constitutes proprietary and confidential information of ADP. It must not be copied, transmitted, or
distributed in any form or by any means, electronic, mechanical, or other, including photocopy, recording, or any information
storage and retrieval system, without the express written permission of ADP. This document may contain inaccuracies or errors
and ADP provides no guarantee regarding the accuracy of its contents. The information provided in this document is for
informational purposes only and not for the purpose of providing legal, accounting, or tax advice. The information and services
ADP provides should not be deemed a substitute for the advice of any such professional. Such information is by nature subject to
revision and may not be the most current information available.
ADP, the ADP logo, and ADP SmartCompliance are registered trademarks of ADP, LLC. ADP – A more human resource. is a
service mark of ADP, LLC. All other marks are the property of their respective owners. Copyright © 2015-2016 ADP, LLC. All
rights reserved.
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