SENATE AMENDED
PRIOR PRINTER'S NOS. 1929, 2165, 2795 PRINTER'S NO. 2847
No. 1650 Session of 1981
INTRODUCED BY WILSON, DOMBROWSKI, VROON, CORNELL, MAIALE,
BOWSER, POTT, LUCYK, McVERRY, NAHILL AND PENDLETON, JUNE 17,
1981
SENATOR HOWARD, FINANCE, IN SENATE, AS AMENDED, FEBRUARY 3, 1982
AN ACT
1 Amending the act of April 9, 1929 (P.L.343, No.176), entitled
2 "An act relating to the finances of the State government;
3 providing for the settlement, assessment, collection, and
4 lien of taxes, bonus, and all other accounts due the
5 Commonwealth, the collection and recovery of fees and other
6 money or property due or belonging to the Commonwealth, or
7 any agency thereof, including escheated property and the
8 proceeds of its sale, the custody and disbursement or other
9 disposition of funds and securities belonging to or in the
10 possession of the Commonwealth, and the settlement of claims
11 against the Commonwealth, the resettlement of accounts and
12 appeals to the courts, refunds of moneys erroneously paid to
13 the Commonwealth, auditing the accounts of the Commonwealth
14 and all agencies thereof, of all public officers collecting
15 moneys payable to the Commonwealth, or any agency thereof,
16 and all receipts of appropriations from the Commonwealth and
17 imposing penalties; affecting every department, board,
18 commission, and officer of the State government, every
19 political subdivision of the State, and certain officers of
20 such subdivisions, every person, association, and corporation
21 required to pay, assess, or collect taxes, or to make returns
22 or reports under the laws imposing taxes for State purposes,
23 or to pay license fees or other moneys to the Commonwealth,
24 or any agency thereof, every State depository and every
25 debtor or creditor of the Commonwealth," establishing a
26 uniform interest rate for all taxes due the Commonwealth,
27 requiring the Commonwealth to pay interest on money due
28 taxpayers and providing for the payment of cash refunds by
29 the Department of Revenue.
30 The General Assembly of the Commonwealth of Pennsylvania
1 hereby enacts as follows:
2 Section 1. Section 806, act of April 9, 1929 (P.L.343,
3 No.176), known as "The Fiscal Code," amended July 13, 1957
4 (P.L.838, No.388), is amended to read:
5 Section 806. Interest on Taxes [and Bonus] Due the
6 Commonwealth.--All [tax and bonus] taxes due the Commonwealth,
7 as provided by law, shall bear interest at the rate [of six per
8 centum] of eighty per centum of that established by the <--
9 Secretary of the Treasury of the United States under the
10 provisions of section 6621 of the Internal Revenue Code as
11 amended by section 711 of the Economic Recovery Tax Act of 1981
12 per annum from the date they are due and payable until paid:
13 Provided, [That in the case of all taxes and bonus which other
14 provisions of this act require taxpayers to compute and pay at
15 the time of filing the report to return, if a settlement is not
16 made within one year after the date upon which the report or
17 return was filed, no interest whatsoever shall be imposed for
18 the period between the end of such one year and sixty days after
19 the date of the mailing of the settlement, unless the taxpayer
20 has filed a written waiver permitting interest to run after the
21 end of said one year: Provided further,] That no penalties
22 [imposed under sections 1701, 1702 and 1705 of this act for
23 failure to file bonus or tax reports on time] shall bear any
24 interest whatsoever. The payment of interest, as aforesaid,
25 shall not relieve any person, association, or corporation, from
26 any of the penalties, [or] commissions or additional tax
27 prescribed by law for neglect or refusal to furnish timely
28 returns or reports to the Department of Revenue, or to pay any
29 claim due to the Commonwealth from such person, association, or
30 corporation. The Secretary of Revenue shall, from time to time,
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1 publish the rate of interest and the commencement date thereof
2 in the Pennsylvania Bulletin. In the case of any tentative tax
3 or installment payment, interest shall run on any unpaid amount
4 from the last day the payment is due to the date paid.
5 Whenever the tax [or bonus] liability of a taxpayer is so
6 affected by any payment or credit settlement or resettlement,
7 assessment or reassessment or determination or redetermination
8 as to change the interest liability [which has been settled
9 against] of such taxpayer, such interest liability shall be
10 recomputed and adjusted by the Department of Revenue [and the
11 Department of the Auditor General] so as to correspond to the
12 tax [or bonus] liability as changed, without the necessity for
13 the filing of any petition or request by the taxpayer or by said
14 [departments] department.
15 Section 2. The act is amended by adding a section to read:
16 Section 806.1. Interest on Overpayments.--(a) Interest
17 shall be allowed and paid by the Commonwealth upon any
18 overpayment to the Commonwealth of any tax. The interest shall
19 be allowed and paid for the period during which the Commonwealth
20 retained the overpayment, beginning with the date of the
21 overpayment, except that:
22 (1) Any tax actually deducted and withheld at the source
23 shall be deemed to have been overpaid on the last day prescribed
24 for filing the return or report for the taxable year (determined
25 without regard to any extension of time for filing);
26 (2) Any amount overpaid as estimated or tentative tax for a
27 taxable year shall be deemed to have been overpaid on the last
28 day prescribed for filing the final return or report for the
29 taxable year (determined without regard to any extension of time
30 for filing);
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1 (3) Any overpayment made before the last day prescribed for
2 payment shall be considered made on the last day; and
3 (4) Any amount claimed to be overpaid with respect to which
4 an administrative review or appellate procedure is initiated in
5 the manner provided by law by the taxpayer shall be deemed to
6 have been overpaid sixty (60) days following the date of
7 initiation of said review or procedure.
8 (5) If any overpayment of tax is refunded or credited within
9 six (6) months after the last date prescribed for filing the
10 final return or report of the tax (determined without regard to
11 any extension of time for filing) or, in case the final return
12 or report is filed after the last day, and is refunded or
13 credited within six (6) months after the date the final return
14 or report is filed, no interest shall be allowed on the
15 overpayment.
16 (b) Interest shall be computed at a rate which is equal to
17 the rate of interest imposed by the Commonwealth on
18 underpayments of the same tax for the same period during which
19 the Commonwealth retained the overpayment.
20 (c) Interest shall be allowed and paid as follows:
21 (1) In the case of a cash refund, from the date of the
22 overpayment to a date preceding the date of the Commonwealth's
23 refund check by not more than thirty (30) days.
24 (2) In the case of a credit for an overpayment, from the
25 date of the overpayment to:
26 (i) The date of the Commonwealth's notice to the taxpayer of
27 the final determination of the credit; or
28 (ii) The date as of which the credit is applied, whichever
29 first occurs: Provided, however, That in the case of a cash
30 refund of a previously determined credit, interest shall be
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1 allowed and paid on the amount of the credit from a date ninety
2 (90) days after the filing of a petition for a cash refund to a
3 date preceding the date of the refund check by not more than
4 thirty (30) days whether or not the refund check is accepted by
5 the taxpayer after tender to the taxpayer.
6 (3) The taxpayer's acceptance of the Commonwealth's check
7 shall be without prejudice to any right of the taxpayer to claim
8 any additional overpayment and interest thereon. Tender of a
9 refund check shall be deemed acceptance thereof for the purposes
10 of this section.
11 Section 3. Section 1108 of the act, amended June 27, 1947
12 (P.L.1023, No.435), is amended to read:
13 Section 1108. Payment of Accounts; [Without Prejudice to]
14 Effect Upon Right of Resettlement, Review, and Appeal.--(a) Any
15 person, association, corporation, public officer, or other
16 debtor who or which is required to make to the Department of
17 Revenue a return or report upon the basis of which any [bonus,]
18 tax, or other charge is [to] or will be settled, determined or
19 assessed, shall have the right at any time, to pay to the
20 Department of Revenue all or any part of the amount of any
21 [bonus,] tax, penalty, additional tax, or other charge due or
22 deemed by him, it, or them to be due, with interest, if any, as
23 is then due and payable for the purpose of stopping the running
24 of further interest thereon, without prejudice to his, its, or
25 their right to present and prosecute a petition for review,
26 resettlement, reassessment or redetermination to the Department
27 of Revenue, a petition for review to the Board of Finance and
28 Revenue, a petition for credit or refund, or an appeal to the
29 [court of common pleas of Dauphin County] Commonwealth Court of
30 Pennsylvania, in the manner and within the times provided by
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1 law.
2 [The payment by any corporation of bonus settled against it
3 by the Secretary of the Commonwealth shall not prejudice its
4 right to present and prosecute a petition for resettlement to
5 the Department of State, a petition for review to the Board of
6 Finance and Revenue, or an appeal to the court of common pleas
7 of Dauphin County, in the manner and within the times provided
8 by law.]
9 (b) Whenever the principal amount due upon a settlement,
10 assessment, determination, resettlement, reassessment, or
11 redetermination, or the principal amount determined to be due
12 upon a petition to the Board of Finance and Revenue, is less
13 than the principal amount paid to the Department of Revenue, [or
14 to the Department of State] on account thereof, and the person,
15 association, corporation, public officer, or other debtor
16 against whom such settlement, assessment or determination has
17 been made is satisfied therewith, or whenever the principal
18 amount, due upon the final judgment entered on any appeal, is
19 less than the principal amount paid to the Department of
20 Revenue[, or to the Department of State] on account thereof, the
21 Department of Revenue [or the Department of State,] shall enter
22 a credit in the amount of such difference to the account of such
23 person, association, corporation, public officer, or other
24 debtor. Such credit may be applied by the Commonwealth or used
25 by the person, association, corporation, public officer, or
26 other debtor, to whose account it is entered, in payment of any
27 tax[, bonus,] or other claim which may be or become due from
28 him, it, or them, to the Commonwealth; and if all such charges
29 have been fully paid, any remaining credit may be assigned to
30 any other person, association, corporation, public officer, or
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1 other debtor, and such assignee may use it in payment of any
2 such obligation to the Commonwealth or the remaining credit
3 shall be refunded in cash by the Department of Revenue upon
4 application of the person, association, corporation, public
5 officer or other person entitled thereto.
6 The Department of Revenue is authorized to prescribe
7 regulations providing for the payment of refunds. So much of the
8 proceeds of the various taxes, as shall be necessary for the
9 payment of refunds out of the general or special funds shall be
10 authorized by the Governor.
11 Section 4. All other acts and parts of acts are hereby
12 repealed insofar as they are inconsistent herewith.
13 Section 5. This act shall take effect July 1, 1982, or, if <--
14 finally enacted after said date, on January 1, 1983. THIS ACT <--
15 SHALL TAKE EFFECT IMMEDIATELY AND SHALL APPLY RETROACTIVELY TO
16 JANUARY 1, 1982. In the case of an overpayment made before the
17 effective date of this act, the date of the overpayment shall be
18 deemed to have been made on the effective date of this act.
19 Nothing contained herein shall affect or impair litigation
20 pending on the effective date of this act. This act shall not be
21 construed to indicate the intent of the General Assembly with
22 regard to the status of the law of the Commonwealth's payment of
23 interest prior to the effective date of this act. The rate of
24 interest upon the effective date hereof shall be based upon the
25 immediate prior determination made in accordance with section
26 806.
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