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Pennsylvania has enacted legislation requiring the state’s Department of Revenue (DOR) to establish a 60-day amnesty program to end no later than June 30, 2017. The program would generally apply to all taxes administered by the DOR that are delinquent as of December 31, 2015. Taxpayers who are under audit or criminal investigation are not eligible to participate.  Under the program, qualifying taxpayers may be eligible for waiver of all penalties and 50% interest on the overdue tax. Qualifying taxpayers with “unknown liabilities” reported and paid under this program generally will not be liable for any taxes of the same type due prior to January 1, 2011. The legislation also includes a non-participation penalty of 5% of the unpaid tax liability plus penalties and interest if a taxpayer fails to remit an eligible tax due or has an unreported or underreported liability for an eligible tax on or after the first day following the end of the Department’s amnesty period. Any taxpayer that participates in this amnesty will be prohibited from participating in any future amnesty programs.  In addition, the department may assess and collect all penalties and interest waived under the program if within two years after the end of the program the taxpayer is delinquent for three consecutive periods in payment of taxes due or filing of returns for monthly or quarterly returns or for 8 or more months for returns filed on an annual basis.  Taxpayers participating in the amnesty program are barred from contesting any amounts filed under amnesty.   (H.B. 1198 (Act 84))

 

UPDATE: The Department has announced that the tax amnesty program will run from April 21, 2017 through June 19, 2017. Recently issued guidance states that participants reporting and paying taxes which are unknown to the Department may possibly qualify for a limited filing period. In such cases, only unknown tax delinquencies dating back to January 1, 2011 must be filed and paid before the close of the tax amnesty period. All non-filed or underreported periods due after December 31, 2015 must be filed by June 19, 2017 to be approved for tax amnesty. Taxpayers that participated in the state’s1996 tax amnesty program are eligible to participate in the 2017 amnesty program. Taxpayers who participated in the state's 2010 tax amnesty program are not eligible to participate in the 2017 amnesty program. Pennsylvania’s voluntary disclosure program remains active during the 2017 amnesty program. The amnesty program includes a non-participation penalty of 5% of the unpaid tax liability and penalties and interest, which would be levied against a taxpayer subject to an eligible tax if the taxpayer failed to remit an eligible tax due or had an unreported or underreported liability for an eligible tax on or after June 20, 2017.

(10/14/2016)

On February 11, 2016, the U.S. Senate approved a permanent extension of the Internet Tax Freedom Act (ITFA) that is included in H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015. The bill also establishes an end date of June 30, 2020 for the seven states that currently impose a tax on internet access: Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas, and Wisconsin. President Obama is expected to sign the permanent extension of the ITFA into law. The House of Representatives had previously passed H.R. 235, the Permanent Internet Tax Freedom Act, on December 15, 2015.  For our previous news item on this topic, visit Internet Tax Freedom Act Extended Through October 1, 2016.

 

UPDATE: On February 24, 2016, President Barack Obama signed into law the permanent extension of the Internet Tax Freedom Act.

 

(Trade Facilitation and Trade Enforcement Act of 2015)

(02/23/2016)

On December 18, 2015, President Barack Obama signed H.R. 2029 – Consolidated Appropriations Act, 2016. The Act extends the Internet Tax Freedom Act (ITFA) through October 1, 2016. Prior provisions that grandfather taxes that existed prior to October 1, 1998 are also extended through October 1, 2016. For our previous news item on this topic, see Internet Tax Freedom Act Extended Until December 11, 2015. (H.R. 2029 – Consolidated Appropriations Act, 2016)

(01/18/2016)

On September 30, 2015 the U.S. House of Representative passed H.R. 719, which includes a provision that would extend the Internet Tax Freedom Act (ITFA) through December 11, 2015. The ITFA was scheduled to expire on October 1, 2015. The bill will now go to President Obama for signature.

 

To see our previous news item on the ITFA, visit Internet Tax Freedom Act Extended Until October 1, 2015, Permanent Extension Introduced.

 

To see an update on this news item, visit Internet Tax Freedom Act Extended Through October 1, 2016,

 

(H.R. 719)

(10/26/2015)

On June 15, 2015, Representative Jason Chaffetz (R-UT) introduced the Remote Transactions Parity Act (RTPA) of 2015 in the U.S. House of Representatives. The bill – similar to the Marketplace Fairness Act (MFA) of 2015 – pertains to sales and use taxcollection obligations for remote sellers, but the RTPA contains some differences and several additional provisions. Unlike the MFA’s $1 million small seller exception, the RTPA’s small seller exception is as follows: first year: $10 million; second year: $5 million; third year: $1 million. The exception goes away in the fourth year. Furthermore, under the RTPA sellers utilizing an electronic marketplace are not considered small sellers and are not entitled to the exception, no matter the year. Under the RTPA, sellers would not be audited by states where they don’t have a physical presence. There would be a three year statute of limitations for assessments on remote sellers. The bill would enable remote sellers to refund over-collected tax to customers. The RTPA also specifies that a state would not be authorized to impose a sales and use tax collection requirement on remote sellers until it has certified multiple software providers that are certified in all states seeking to impose authorization requirements. The RTPA would also allow customers to pursue refunds of over-collected tax from remote sellers. However, RTPA does not preempt states from imposing sales and use taxes on remote sellers that do not have physical presence under this definition. It merely authorizes states to impose sales and use tax on remote sellers without a physical presence. Under the RTPA, if a seller has nexus under existing law, including Quill v. North Dakota, then the state may still impose a sales and use tax collection requirement.  The bill is assigned to the Judiciary Committee just like the MFA.  On July 1, 2015 it was referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law. (H.R. 2775, the Remote Transactions Parity Act of 2015)

 

UPDATE: This bill failed to pass during the 114th Congressional Session running from January 3, 2015 to January 3, 2017.  Therefore, this bill has died and would need to be reintroduced to be considered and voted on.

(09/08/2015)

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