September 24, 2019 City of Montgomery, West Virginia imposes new city service fee to be withheld from wages Effective July 1, 2019, the City of Montgomery, West Virginia requires employers with a place of business located within the city to withhold a city service fee from the wages of employees working within the city. Employers must submit fees withheld from employees on either a monthly or quarterly basis, based on the employer's choice. The definition of city employer includes all for-profit and not-for-profit entities and all local, county, state and federal government entities. (Telephone conversation and emails, City of Montgomery, September 2019; city ordinance enacted May 2019.) For the first fiscal year (July 1, 2019 through June 30, 2020), the service fee to be withheld is $1 per calendar week, increasing to $1.50 per week on July 1, 2020 and $2 per week on July 1, 2021. Employers may choose to pay the fee rather than withholding it from employee wages. City residents who already pay a police and municipal fee, and transient employees (employees who remain in the city for a short period of time and whose principal office is not within the city), are exempt from the city service fee. Employers must submit a monthly or quarterly list of all employees, including those exempt from the city service fee, showing the employee's name and address, along with exemption code 1 for city residents and exemption code 2 for transient employees. A summary must also be submitted showing the number of employees subject to the service fee, the total payment to be submitted, the number of resident employees not subject to the service fee, the number of transient employees not subject to the service fee, and the total number of all employees. A summary and remittance form are sent to employers each quarter. The summary form, employee list and payment must be remitted to the City of Montgomery, 706 Third Avenue, Montgomery, WV 25136. The first monthly payment and report (for employers that choose to file monthly) was due by August 10, 2019, with the second due September 10, 2019 and the third due October 10, 2019. The first quarterly payment and report (for employers that choose to file quarterly) is due by October 10, 2019. Montgomery employers that have not received forms and instructions from the city, or that have further questions, should call +1 304 442 5181 or send an email to Heather Arthur at Harthur@MontgomeryWV.gov or Angela Tackett at Atackett@MontgomeryWV.gov. Ernst & Young LLP insights The City of Montgomery ordinance provides that in the event the state legislature enacts a law allowing cities to impose a gross wage tax, the city service fee ordinance shall be repealed. The City of Montgomery joins seven our West Virginia cities, such as the City of Huntington, that require a city service fee be withheld from wages (EY Payroll Newsflash Vol. 20, #100, 7-24-2019):
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