What Is Occupational Privilege Tax (OPT) Withholding?
The occupational privilege tax is a flat rate tax levied by a municipality and/or school district on all individuals working within the taxing jurisdiction. The situs for the occupational privilege tax is the actual location where the individual taxpayer works. It is not the headquarters of the employer where the payroll checks are prepared. If a taxpayer works in more than one political subdivision during the tax year and is subject to more than one occupational privilege tax, the Act establishes priorities of liability. The situs of the tax is the place of employment; therefore, no taxing district may levy this tax as though it were another kind of per capita tax. It is intended to be a tax only on persons gainfully employed. If gainful employment takes persons into more than one taxing district levying the tax, priorities of collection are as follows.
