Local taxes are simply taxes that are imposed by a city, county, or other municipality. In some states, these taxes may need to be processed along with other payroll taxes. The places most commonly associated with local taxes are Ohio and Pennsylvania, though other states have them as well.
If you think you have an employee that has taxable wages for a local tax, be sure to confirm that person’s tax liability with your local agency based on their current work and home address. If it turns out you must file and pay the taxes you’ll need to register with your local agency. Local tax jurisdictions can get tricky, so when it comes to determining your liability, it’s better safe than sorry.Updated August 18, 2017
This article provides general information and shouldn’t be construed as tax advice. Since tax rules may change over time and can vary by location and industry, please consult a CPA or tax advisor for advice specific to your business.