PRINTER'S NO. 258
No. 238 Session of 1977
INTRODUCED BY BRUNNER, GARZIA, CIANCIULLI, O'DONNELL, ZEARFOSS,
MOEHLMANN, MEBUS, SCANLON AND HASKELL, FEBRUARY 9, 1977
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 9, 1977
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," establishing a standard refund procedure and
11 setting forth an appellate procedure for the taxpayer to the
12 courts of this Commonwealth and making certain repeals.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Article III, act of March 4, 1971 (P.L.6, No.2),
16 known as the "Tax Reform Code of 1971," added August 31, 1971
17 (P.L.362, No.93), is amended by adding sections to read:
18 ARTICLE III
19 PERSONAL INCOME TAX
20 Section 346.1. Refunds.--The department shall, pursuant to
21 the provisions of sections 346.2 and 346.3 refund all taxes,
22 interest and penalties paid to the Commonwealth under the
23 provisions of this article and to which the Commonwealth is not
1 rightfully entitled. Such refunds shall be made to the person,
2 his heirs, successors, assigns or other personal
3 representatives, who actually paid the tax: Provided, That no
4 refund shall be made under this section with respect to any
5 payment made by reason of an assessment with respect to which a
6 taxpayer has filed a petition for reassessment pursuant to
7 section 340, to the extent that said petition has been
8 determined adversely to the taxpayer by a decision which is no
9 longer subject to further review or appeal: Provided, further,
10 That nothing contained herein shall be deemed to prohibit a
11 taxpayer who has filed a timely petition for reassessment from
12 amending it to a petition for refund where the petitioner has
13 paid the tax assessed.
14 Section 346.2. Refund Petition and Procedures.--(a) Except
15 as provided for in section 346.4 and in subsection (b) and (d),
16 the refund or credit of tax, interest or penalty provided for by
17 section 346.1 shall be made only where the person who has
18 actually paid the tax files a petition for refund with the
19 department within three years of the actual payment of the tax
20 to the Commonwealth. Such petition for refund must set forth in
21 reasonable detail the grounds upon which the taxpayer claims
22 that the Commonwealth is not rightfully entitled to such tax,
23 interest or penalty, in whole or in part, and shall be
24 accompanied by an affidavit affirming that the facts contained
25 therein are true and correct. The department may hold such
26 hearings as may be necessary for the purpose at such times and
27 places as it may determine, and each person who has duly filed a
28 refund petition shall be notified by the department of the time
29 when, and the place where, such hearing in his case will be
30 held.
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1 (b) A refund or credit of tax, interest or penalty paid as a
2 result of an assessment made by the department under section
3 340, shall be made only where the person who has actually paid
4 the tax files with the department a petition for a refund with
5 the department within six months after the date the notice of
6 assessment was mailed.
7 (c) It shall be the duty of the department, within six
8 months after receiving a petition for refund, to dispose of the
9 issue raised by such petition, and mail notice of the
10 department's decision to the petitioner: Provided, however, That
11 the taxpayer and the department may, by stipulation, extend such
12 disposal time by not more than six additional months.
13 (d) Notwithstanding any other provision of this section
14 where any tax, interest or penalty has been paid under a
15 provision of this article subsequently held by final judgment of
16 a court of competent jurisdiction to be unconstitutional, or
17 under an interpretation of such provision subsequently held by
18 such court to be erroneous, a petition for refund may be filed
19 either before or subsequent to final judgment, but such petition
20 must be filed within five years of the date of the payment of
21 which a refund is requested. The department shall have
22 jurisdiction to hear and determine any such petition filed prior
23 to such final judgment only if, at the time of filing of the
24 petition, proceedings are pending in a court of competent
25 jurisdiction wherein the claim of unconstitutionality or of
26 erroneous interpretation, made in the petition for refund may be
27 established, and in such case, the department shall not take
28 final action upon the petition for refund until the judgment
29 determining the question involved in such petition has become
30 final.
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1 Section 346.3. Review by the Board of Finance and Revenue.--
2 Within sixty days after the date of mailing of notice by the
3 department of the decision upon a petition for refund filed with
4 it, pursuant to section 346.2, the petitioner may further
5 petition the Board of Finance and Revenue to review the decision
6 of the department. The failure of the department to notify the
7 petitioner of its decision within the time provided for by
8 section 346 shall act as a denial of such petition, and a
9 petition for review may be filed with the Board of Finance and
10 Revenue within one hundred twenty days of the date prior to
11 which the department should have mailed to the petitioner its
12 notice of decision. Every petition for review filed with the
13 Board of Finance and Revenue under the provisions of this
14 section shall incorporate by reference the petition for refund.
15 The petitioner may, in his petition for review, elect to
16 withdraw one or more grounds as set out in the original refund
17 petition. The Board of Finance and Revenue shall act finally in
18 disposing of such petitions filed with it within six months
19 after they have been received. In the event of the failure of
20 the board to dispose of any petition within six months, the
21 action taken by the department upon the petition for refund
22 shall be sustained. The Board of Finance and Revenue may sustain
23 the action taken by the department on a petition for refund, or
24 it may redetermine whether a lesser or greater amount of refund
25 is proper. Under no circumstances may the Board of Finance and
26 Revenue authorize a refund greater than that originally applied
27 for by the petitioner. The board shall give notice of its action
28 to the department and to the petitioner.
29 Section 346.4. Appeal to the Commonwealth Court.--Any
30 person, or the Commonwealth, aggrieved by the decision of the
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1 Board of Finance and Revenue under section 364.3, or by the
2 board's failure to act upon a petition for review within six
3 months may appeal to the Commonwealth Court from the decision of
4 the board or of the department, as the case may be, within the
5 time and in the manner now or hereafter provided for by law for
6 appeals in the case of tax settlements.
7 Section 2. Sections 347 and 350, act of March 4, 1971
8 (P.L.6, No.2), known as the "Tax Reform Code of 1971," added
9 August 31, 1971 (P.L.362, No.93) are repealed.
10 Section 3. This act shall take effect immediately and be
11 retroactive to June 1, 1971 and shall apply to all petitions
12 thereafter.
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