AN ACT

 

1Amending the act of December 31, 1965 (P.L.1257, No.511),
2entitled "An act empowering cities of the second class,
3cities of the second class A, cities of the third class,
4boroughs, towns, townships of the first class, townships of
5the second class, school districts of the second class,
6school districts of the third class and school districts of
7the fourth class including independent school districts, to
8levy, assess, collect or to provide for the levying,
9assessment and collection of certain taxes subject to maximum
10limitations for general revenue purposes; authorizing the
11establishment of bureaus and the appointment and compensation
12of officers, agencies and employes to assess and collect such
13taxes; providing for joint collection of certain taxes,
14prescribing certain definitions and other provisions for
15taxes levied and assessed upon earned income, providing for
16annual audits and for collection of delinquent taxes, and
17permitting and requiring penalties to be imposed and
18enforced, including penalties for disclosure of confidential
19information, providing an appeal from the ordinance or
20resolution levying such taxes to the court of quarter
21sessions and to the Supreme Court and Superior Court,"
22providing for the definition of "farming"; and further
23providing for declaration and payment of income taxes and for
24withholding and remittance.

25The General Assembly of the Commonwealth of Pennsylvania
26hereby enacts as follows:

27Section 1. Section 501 of the act of December 31, 1965
28(P.L.1257, No.511), known as The Local Tax Enabling Act, is

1amended by adding a definition to read:

2Section 501. Definitions.

3The following words and phrases when used in this chapter
4shall have the meanings given to them in this section unless the
5context clearly indicates otherwise:

6* * *

7"Farming." Includes all activities that are farming for 
8purposes of section 325 of the act of March 4, 1971 (P.L.6, 
9No.2), known as the Tax Reform Code of 1971.

10* * *

11Section 2. Section 502(c) of the act, added July 2, 2008
12(P.L.197, No.32), is amended and the section is amended by
13adding subsections to read:

14Section 502. Declaration and payment of income taxes.

15* * *

16(c) Declaration and payment.--Except as provided in
17[subsection (a)(2)] subsections (a)(2) and (d), taxpayers shall
18declare and pay income taxes as follows:

19(1) Every taxpayer shall, on or before April 15 of the
20succeeding year, make and file with the resident tax officer,
21a final return showing the amount of taxable income received
22during the period beginning January 1 of the current year and
23ending December 31 of the current year, the total amount of
24tax due on the taxable income, the amount of tax paid, the
25amount of tax that has been withheld under section 512 and
26the balance of tax due. All amounts reported shall be rounded
27to the nearest whole dollar. At the time of filing the final
28return, the taxpayer shall pay the resident tax officer the
29balance of the tax due or shall make demand for refund or
30credit in the case of overpayment. Taxpayers may use the
 

1Annual Local Earned Income Tax Return form available from the 
2department's Internet website to file the final return.

3(2) (i) Every taxpayer making net profits shall, by
4April 15 of the current year, make and file with the
5resident tax officer a declaration of the taxpayer's
6estimated net profits during the period beginning January
71 and ending December 31 of the current year, and shall
8pay to the resident tax officer in four equal quarterly
9installments the tax due on the estimated net profits.
10The first installment shall be paid at the time of filing
11the declaration, and the other installments shall be paid
12on or before [June] July 15 of the current year,
13[September] October 15 of the current year and January 15
14of the succeeding year, respectively.

15(ii) Any taxpayer who first anticipates any net
16profit after April 15 of the current year shall make and
17file the declaration required on or before [June] July 15
18of the current year, [September] October 15 of the
19current year or [December 31 of the current year] January 
2015 of the succeeding year, whichever date next follows
21the date on which the taxpayer first anticipates such net
22profit, and shall pay to the resident tax officer in
23equal installments the tax due on or before the quarterly
24payment dates that remain after the filing of the
25declaration.

26(ii.1) A taxpayer will be considered to have met the
27requirements for declaration and minimum payment of
28estimated tax for any year in which the taxpayer timely
29declares and makes quarterly payments of estimated tax in
30amounts that equal at least one-fourth of the total

1income <-and net profits tax due and not withheld under
2section 512 in the previous year, provided that the
3taxpayer can show through the taxpayer's annual <-earned
4income tax return filed for the previous year that tax
5liability was incurred.

6(iii) Every taxpayer shall, on or before April 15 of
7the succeeding year, make and file with the resident tax
8officer a final return showing the amount of net profits
9earned or received based on the method of accounting used
10by the taxpayer during the period beginning January 1 of
11the current year, and ending December 31 of the current
12year, the total amount of tax due on the net profits and
13the total amount of tax paid. At the time of filing the
14final return, the taxpayer shall pay to the resident tax
15officer the balance of tax due or shall make demand for
16refund or credit in the case of overpayment. Any taxpayer
17may, in lieu of paying the fourth quarterly installment
18of the estimated tax, elect to make and file with the
19resident tax officer on or before January 31 of the
20succeeding year, the final return.

21(iv) The department, in consultation with the
22Department of Revenue, shall provide by regulation for
23the filing of adjusted declarations of estimated net
24profits and for the payments of the estimated tax in
25cases where a taxpayer who has filed the declaration
26required under this subsection anticipates additional net
27profits not previously declared or has overestimated
28anticipated net profits.

29(v) Every taxpayer who discontinues business prior
30to December 31 of the current year, shall, within 30 days

1after the discontinuance of business, file a final return
2as required under this paragraph and pay the tax due.

3(3) Every taxpayer who receives any other taxable income 
<-4or net profits not subject to withholding under section 
5512(3) shall make and file with the resident tax officer 
6a quarterly return on or before April 15 of the current 
7year, [June] July 15 of the current year, [September] 
8October 15 of the current year, and January 15 of the 
9succeeding year, setting forth the aggregate amount of 
10taxable income not subject to withholding by the taxpayer 
11during the three-month periods ending March 31 of the 
12current year, June 30 of the current year, September 30 
13of the current year, and December 31 of the current year, 
14respectively, and subject to income tax, together with 
15such other information as the department may require. 
16Every taxpayer filing a return shall, at the time of 
17filing the return, pay to the resident tax officer the 
18amount of income tax due. The department shall establish 
19criteria under which the tax officer may waive the 
20quarterly return and payment of the income tax and permit 
21a taxpayer to file the receipt of taxable income on the 
22taxpayer's annual return and pay the income tax due on or 
23before April 15 of the succeeding year.

24(4) If any date prescribed in this section for filing or
25payment of tax should fall on a Saturday, Sunday or legal
26holiday, the taxpayer may file or make payment on the next
27business day.

28(d) Filing of estimated tax by taxpayers whose major source
29of gross income is from farming.--Notwithstanding any other
30provision of this section, a declaration of estimated tax of an

1individual having an estimated gross income from farming for the
2taxable year which is at least two-thirds of his total estimated
3gross income for the taxable year may be filed at any time on or
4before January 15 of the succeeding year, but if the farmer
5files a final return and pays the entire tax by March 1, the
6return may be considered as his declaration due on or before
7January 15.

8(e) Restrictions.--In administering the provisions of this
9section, no political subdivision, tax collection committee or
10tax officer may:

11(1) Prohibit a taxpayer from filing any return or
12declaration required under this section in person or by first
13class mail.

14(2) Prohibit a taxpayer from <-using or filing any local
15income tax return form, estimated tax return form or other
16form related to any filing required under this section that
17has been posted by the department on its Internet website.

18(3) Impose a penalty for failing to timely file a
19quarterly estimated tax return for which no payment of
20estimated tax was due, as shown in the taxpayer's annual
<-21earned income tax return.

22Section 3. Section 512 of the act, added July 2, 2008
23(P.L.197, No.32), is amended a<-nd the section is amended by 
24adding paragraphs to read:

25Section 512. Withholding and remittance.

26(a) General rule.--For taxable years commencing on and after
27January 1, 2012, or earlier taxable years if specified by a tax
28collection district, income taxes shall be withheld, remitted
29and reported as follows:

30(1) Every employer having an office, factory, workshop,
 

1branch, warehouse or other place of business within a tax 
2collection district who employs one or more persons, other 
3than domestic servants, for a salary, wage, commission or 
4other compensation, who has not previously registered, shall, 
5within 15 days after becoming an employer, register with the 
6tax officer the name and address of the employer and such 
7other information as the department may require.

8(2) An employer shall require each new employee to
9complete a certificate of residency form, which shall be an
10addendum to the Federal Employee's Withholding Allowance
11Certificate (Form W-4). An employer shall also require any
12employee who changes their address or domicile to complete a
13certificate of residency form. Upon request, certificate of
14residency forms shall be provided by the department. The
15certificate of residency form shall provide information to
16help identify the political subdivisions where an employee
17lives and works.

18(3) Every employer having an office, factory, workshop, 
19branch, warehouse or other place of business within a tax 
20collection district that employs one or more persons, other 
21than domestic servants, for a salary, wage, commission or 
22other compensation, shall, at the time of payment, deduct 
23from the compensation due each employee employed at such 
24place of business the greater of the employee's resident tax 
25or the employee's nonresident tax as released in the official 
26register under section 511.

27(4) Except as set forth in paragraph (5), [within 30
28days] by the last day of the month following the end of each
29calendar quarter, every employer shall file a quarterly
30return and pay the amount of income taxes deducted during the

1preceding calendar quarter to the tax officer for the place
2of employment of each employee. The form shall show the name,
3address and Social Security number of each employee, the
4compensation of the employee during the preceding three-month
5period, the income tax deducted from the employee, the
6political subdivisions imposing the income tax upon the
7employee, the total compensation of all employees during the
8preceding calendar quarter, the total income tax deducted
9from the employees and paid with the return and any other
10information prescribed by the department.

11(5) Notwithstanding paragraph (4), the provisions of
12this paragraph shall apply if an employer has more than one
13place of employment in more than one tax collection district.
14[Within 30 days following<-] By the last day of each month<-]
<-15following the end of each calendar month <-On or before the 
16last day of the month succeeding the month for which the 
17return required by paragraph (4) is due, the employer may
18file the return <-[required by paragraph (4)<-] and pay the total
19amount of income taxes deducted from employees in all work
20locations during the preceding month to the tax officer for
21either the tax collection district in which the employer's
22payroll operations are located or as determined by the
23department. The return and income taxes deducted shall be
24filed and paid electronically. The employer must file a
25notice of intention to file combined returns and make
26combined payments with the tax officer for each place of
27employment at least one month before filing its first
28combined return or making its first combined payment. This
29paragraph shall not be construed to change the location of an
30employee's place of employment for purposes of nonresident

1tax liability.

2(6) Any employer who, for two of the preceding four 
3quarterly periods, has failed to deduct the proper income 
4tax, or any part of the income tax, or has failed to pay over 
5the proper amount of income tax as required by paragraph (3) 
6to the tax collection district, may be required by the tax 
7officer to file returns and pay the income tax monthly. In 
8such cases, payments of income tax shall be made to the tax 
9officer on or before the last day of the month succeeding the 
10month for which the income tax was withheld.

11(7) On or before February 28 of the succeeding year,
12every employer shall file with the tax officer where income
13taxes have been deducted and remitted pursuant to paragraph
14(3):

15(i) An annual return showing, for the period 
16beginning January 1 of the current year and ending 
17December 31 of the current year, the total amount of 
18compensation paid, the total amount of income tax 
19deducted, the total amount of income tax paid to the tax 
20officer and any other information prescribed by the 
21department.

22(ii) An individual withholding statement, which may 
23be integrated with the Federal Wage and Tax Statement 
24(Form W-2), for each employee employed during all or any 
25part of the period beginning January 1 of the current 
26year and ending December 31 of the current year, setting 
27forth the address and Social Security number, the amount 
28of compensation paid to the employee during the period, 
29the amount of income tax deducted, the amount of income 
30tax paid to the tax officer, the numerical code
 

1prescribed by the department representing the tax 
2collection district where the payments required by 
3paragraphs (4) and (5) were remitted and any other 
4information required by the department. Every employer 
5shall furnish one copy of the individual withholding 
6statement to the employee for whom it is filed.

7(8) Any employer who discontinues business prior to
8December 31 of the current year shall, within 30 days after
9the discontinuance of business, file returns and withholding
10statements required under this section and pay the income tax
11due.

12(9) Except as otherwise provided in section 511, an
13employer who willfully or negligently fails or omits to make
14the deductions required by this subsection shall be liable
15for payment of income taxes which the employer was required
16to withhold to the extent that the income taxes have not been
17recovered from the employee. The failure or omission of any
18employer to make the deductions required by this section
19shall not relieve any employee from the payment of the income
20tax or from complying with the requirements for filing of
21declarations and returns.

22(b) Date of filing.--If any date prescribed in this section
23for filing or payment of tax should fall on a Saturday, Sunday
24or legal holiday, the filing or payment may be performed on the
25next business day.

26(c) Forms.--In administering the provisions of this section,
27no political subdivision, tax collection committee or tax
28officer may prohibit the use or filing of any applicable form
29posted by the department on its Internet website to meet the
30requirements of this section.

1Section 4. The amendment or addition of sections 501, 502(c)
2and 512 of the act shall apply to taxable years beginning after
3the effective date of this section.

4Section 5. This act shall take effect in 180 days.