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HOUSE AMENDED
PRIOR PRINTER'S NOS. 267, 887
PRINTER'S NO. 1689
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
356
Session of
2015
INTRODUCED BY FOLMER, EICHELBERGER, BROWNE, VULAKOVICH, ALLOWAY,
AUMENT, HUGHES, SCHWANK, VOGEL AND HUTCHINSON,
JANUARY 29, 2015
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, APRIL 12, 2016
AN ACT
Amending the act of December 31, 1965 (P.L.1257, No.511),
entitled "An act empowering cities of the second class,
cities of the second class A, cities of the third class,
boroughs, towns, townships of the first class, townships of
the second class, school districts of the second class,
school districts of the third class and school districts of
the fourth class including independent school districts, to
levy, assess, collect or to provide for the levying,
assessment and collection of certain taxes subject to maximum
limitations for general revenue purposes; authorizing the
establishment of bureaus and the appointment and compensation
of officers, agencies and employes to assess and collect such
taxes; providing for joint collection of certain taxes,
prescribing certain definitions and other provisions for
taxes levied and assessed upon earned income, providing for
annual audits and for collection of delinquent taxes, and
permitting and requiring penalties to be imposed and
enforced, including penalties for disclosure of confidential
information, providing an appeal from the ordinance or
resolution levying such taxes to the court of quarter
sessions and to the Supreme Court and Superior Court," in
consolidated collection of local income taxes, providing for
the definition of "farming" and further providing for
declaration and payment of income taxes and for withholding
and remittance.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 501 of the act of December 31, 1965
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(P.L.1257, No.511), known as The Local Tax Enabling Act, is
amended by adding a definition to read:
Section 501. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Farming." Includes all activities that are farming for
purposes of section 325 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
* * *
Section 2. Sections 502 and 512 of the act, added July 2,
2008 (P.L.197, No.32), are amended to read:
Section 502. Declaration and payment of income taxes.
(a) Application.--
(1) Income taxes shall be applicable to taxable income
earned or received based on the method of accounting used by
the taxpayer in the period beginning January 1 of the current
year and ending December 31 of the current year, except that
taxes imposed for the first time and changes to existing tax
rates shall become effective on January 1 or July 1, as
specified in the ordinance or resolution, and the tax shall
continue in force on a calendar year or taxpayer fiscal year
basis, without annual reenactment, unless the rate of the tax
is subsequently changed.
(2) For a taxpayer whose fiscal year is not a calendar
year, the tax officer shall establish deadlines for filing,
reporting and payment of taxes which provide time periods
equivalent to those provided for a calendar year taxpayer.
(b) Partial domicile.--The taxable income subject to tax of
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a taxpayer who is domiciled in a political subdivision for only
a portion of the tax year shall be an amount equal to the
taxpayer's taxable income multiplied by a fraction, the
numerator of which is the number of calendar months during the
tax year that the individual is domiciled in the political
subdivision, and the denominator of which is 12. A taxpayer
shall include in the numerator any calendar month during which
the taxpayer is domiciled for more than half the calendar month.
A day that a taxpayer's domicile changes shall be included as a
day the individual is in the new domicile and not the old
domicile. If the number of days in the calendar month in which
the individual lived in the old and new domiciles are equal, the
calendar month shall be included in calculating the number of
months in the new domicile.
(c) Declaration and payment.--Except as provided in
[subsection (a)(2)] subsections (a)(2) and (d), taxpayers shall
declare and pay income taxes as follows:
(1) Every taxpayer shall, on or before April 15 of the
succeeding year, make and file with the resident tax officer,
a final return showing the amount of taxable income received
during the period beginning January 1 of the current year and
ending December 31 of the current year, the total amount of
tax due on the taxable income, the amount of tax paid, the
amount of tax that has been withheld under section 512 and
the balance of tax due. All amounts reported shall be rounded
to the nearest whole dollar. At the time of filing the final
return, the taxpayer shall pay the resident tax officer the
balance of the tax due or shall make demand for refund or
credit in the case of overpayment. Taxpayers may use the
Annual Local Earned Income Tax Return form available from the
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department's publicly accessible Internet website to file the
final return.
(2) (i) Every taxpayer making net profits shall, by
April 15 of the current year, make and file with the
resident tax officer a declaration of the taxpayer's
estimated net profits during the period beginning January
1 and ending December 31 of the current year, and shall
pay to the resident tax officer in four equal quarterly
installments the tax due on the estimated net profits.
The first installment shall be paid at the time of filing
the declaration, and the other installments shall be paid
on or before [June] July 15 of the current year,
[September] October 15 of the current year and January 15
of the succeeding year, respectively.
(ii) Any taxpayer who first anticipates any net
profit after April 15 of the current year shall make and
file the declaration required on or before [June] July 15
of the current year, [September] October 15 of the
current year or [December 31 of the current year] January
15 of the succeeding year, whichever date next follows
the date on which the taxpayer first anticipates such net
profit, and shall pay to the resident tax officer in
equal installments the tax due on or before the quarterly
payment dates that remain after the filing of the
declaration.
(ii.1) A taxpayer will be considered to have met the
requirements for declaration and minimum payment of
estimated tax for any year in which the taxpayer timely
declares and makes quarterly payments of estimated tax in
amounts that equal at least one-fourth of the total
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income tax due and not withheld under section 512 in the
previous year, provided that the taxpayer can show
through the taxpayer's annual income tax return filed for
the previous year that tax liability was incurred.
(iii) Every taxpayer shall, on or before April 15 of
the succeeding year, make and file with the resident tax
officer a final return showing the amount of net profits
earned or received based on the method of accounting used
by the taxpayer during the period beginning January 1 of
the current year, and ending December 31 of the current
year, the total amount of tax due on the net profits and
the total amount of tax paid. At the time of filing the
final return, the taxpayer shall pay to the resident tax
officer the balance of tax due or shall make demand for
refund or credit in the case of overpayment. Any taxpayer
may, in lieu of paying the fourth quarterly installment
of the estimated tax, elect to make and file with the
resident tax officer on or before January 31 of the
succeeding year, the final return.
(iv) The department, in consultation with the
Department of Revenue, shall provide by regulation for
the filing of adjusted declarations of estimated net
profits and for the payments of the estimated tax in
cases where a taxpayer who has filed the declaration
required under this subsection anticipates additional net
profits not previously declared or has overestimated
anticipated net profits.
(v) Every taxpayer who discontinues business prior
to December 31 of the current year, shall, within 30 days
after the discontinuance of business, file a final return
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as required under this paragraph and pay the tax due.
(3) Every taxpayer who receives any other taxable income
not subject to withholding under section 512(3) shall make
and file with the resident tax officer a quarterly return on
or before April 15 of the current year, [June] July 15 of the
current year, [September] October 15 of the current year, and
January 15 of the succeeding year, setting forth the
aggregate amount of taxable income not subject to withholding
by the taxpayer during the three-month periods ending March
31 of the current year, June 30 of the current year,
September 30 of the current year, and December 31 of the
current year, respectively, and subject to income tax,
together with such other information as the department may
require. Every taxpayer filing a return shall, at the time of
filing the return, pay to the resident tax officer the amount
of income tax due. The department shall establish criteria
under which the tax officer may waive the quarterly return
and payment of the income tax and permit a taxpayer to file
the receipt of taxable income on the taxpayer's annual return
and pay the income tax due on or before April 15 of the
succeeding year.
(4) If any date prescribed in this section for filing or
payment of tax should fall on a Saturday, Sunday or legal
holiday, the taxpayer may file or make payment on the next
business day.
(d) Filing of estimated tax by taxpayers whose major source
of gross income is from farming.--Notwithstanding any other
provision of this section, a declaration of estimated tax of an
individual having an estimated gross income from farming for the
taxable year which is at least two-thirds of his total estimated
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gross income for the taxable year may be filed at any time on or
before January 15 of the succeeding year, but if the farmer
files a final return and pays the entire tax by March 1, the
return may be considered as his declaration due on or before
January 15.
(e) Restrictions.--In administering the provisions of this
section, no political subdivision, tax collection committee or
tax officer may:
(1) Prohibit a taxpayer from filing any return or
declaration required under this section in person or by first
class mail.
(2) Prohibit a taxpayer from filing any local income tax
return form, estimated tax return form or other form related
to any filing required under this section that has been
posted by the department on its publicly accessible Internet
website.
(3) Impose a penalty for failing to timely file a
quarterly estimated tax return for which no payment of
estimated tax was due, as shown in the taxpayer's annual
income tax return.
(4) IMPOSE A PENALTY ON A TAXPAYER UNLESS IT HAS ISSUED
A LETTER THAT NOTIFIES THE TAXPAYER THAT THE TAXPAYER IS
REQUIRED TO TAKE CORRECTIVE ACTION WITHIN 30 DAYS AND FAILURE
TO TAKE CORRECTIVE ACTION WILL RESULT IN A PENALTY BEING
IMPOSED ON THE TAXPAYER.
Section 512. Withholding and remittance.
(a) General rule.--For taxable years commencing on and after
January 1, 2012, or earlier taxable years if specified by a tax
collection district, income taxes shall be withheld, remitted
and reported as follows:
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(1) Every employer having an office, factory, workshop,
branch, warehouse or other place of business within a tax
collection district who employs one or more persons, other
than domestic servants, for a salary, wage, commission or
other compensation, who has not previously registered, shall,
within 15 days after becoming an employer, register with the
tax officer the name and address of the employer and such
other information as the department may require.
(2) An employer shall require each new employee to
complete a certificate of residency form, which shall be an
addendum to the Federal Employee's Withholding Allowance
Certificate (Form W-4). An employer shall also require any
employee who changes their address or domicile to complete a
certificate of residency form. Upon request, certificate of
residency forms shall be provided by the department. The
certificate of residency form shall provide information to
help identify the political subdivisions where an employee
lives and works.
(3) Every employer having an office, factory, workshop,
branch, warehouse or other place of business within a tax
collection district that employs one or more persons, other
than domestic servants, for a salary, wage, commission or
other compensation, shall, at the time of payment, deduct
from the compensation due each employee employed at such
place of business the greater of the employee's resident tax
or the employee's nonresident tax as released in the official
register under section 511.
(4) Except as set forth in paragraph (5), [within 30
days] by the last day of the month following the end of each
calendar quarter, every employer shall file a quarterly
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return and pay the amount of income taxes deducted during the
preceding calendar quarter to the tax officer for the place
of employment of each employee. The form shall show the name,
address and Social Security number of each employee, the
compensation of the employee during the preceding three-month
period, the income tax deducted from the employee, the
political subdivisions imposing the income tax upon the
employee, the total compensation of all employees during the
preceding calendar quarter, the total income tax deducted
from the employees and paid with the return and any other
information prescribed by the department.
(5) Notwithstanding paragraph (4), the provisions of
this paragraph shall apply if an employer has more than one
place of employment in more than one tax collection district.
[Within 30 days following the last day of each month] On or
before the last day of the month succeeding the month for
which the return required by paragraph (4) is due, the
employer may file the return [required by paragraph (4)] and
pay the total amount of income taxes deducted from employees
in all work locations during the preceding month to the tax
officer for either the tax collection district in which the
employer's payroll operations are located or as determined by
the department. The return and income taxes deducted shall be
filed and paid electronically. The employer must file a
notice of intention to file combined returns and make
combined payments with the tax officer for each place of
employment at least one month before filing its first
combined return or making its first combined payment. This
paragraph shall not be construed to change the location of an
employee's place of employment for purposes of nonresident
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tax liability.
(6) Any employer who, for two of the preceding four
quarterly periods, has failed to deduct the proper income
tax, or any part of the income tax, or has failed to pay over
the proper amount of income tax as required by paragraph (3)
to the tax collection district, may be required by the tax
officer to file returns and pay the income tax monthly. In
such cases, payments of income tax shall be made to the tax
officer on or before the last day of the month succeeding the
month for which the income tax was withheld.
(7) On or before February 28 of the succeeding year,
every employer shall file with the tax officer where income
taxes have been deducted and remitted pursuant to paragraph
(3):
(i) An annual return showing, for the period
beginning January 1 of the current year and ending
December 31 of the current year, the total amount of
compensation paid, the total amount of income tax
deducted, the total amount of income tax paid to the tax
officer and any other information prescribed by the
department.
(ii) An individual withholding statement, which may
be integrated with the Federal Wage and Tax Statement
(Form W-2), for each employee employed during all or any
part of the period beginning January 1 of the current
year and ending December 31 of the current year, setting
forth the address and Social Security number, the amount
of compensation paid to the employee during the period,
the amount of income tax deducted, the amount of income
tax paid to the tax officer, the numerical code
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prescribed by the department representing the tax
collection district where the payments required by
paragraphs (4) and (5) were remitted and any other
information required by the department. Every employer
shall furnish one copy of the individual withholding
statement to the employee for whom it is filed.
(8) Any employer who discontinues business prior to
December 31 of the current year shall, within 30 days after
the discontinuance of business, file returns and withholding
statements required under this section and pay the income tax
due.
(9) Except as otherwise provided in section 511, an
employer who willfully or negligently fails or omits to make
the deductions required by this subsection shall be liable
for payment of income taxes which the employer was required
to withhold to the extent that the income taxes have not been
recovered from the employee. The failure or omission of any
employer to make the deductions required by this section
shall not relieve any employee from the payment of the income
tax or from complying with the requirements for filing of
declarations and returns.
(b) Date of filing.--If any date prescribed in this section
for filing or payment of tax should fall on a Saturday, Sunday
or legal holiday, the filing or payment may be performed on the
next business day.
(c) Forms.--In administering the provisions of this section,
no political subdivision, tax collection committee or tax
officer may prohibit the use or filing of any applicable form
posted by the department on its publicly accessible Internet
website to meet the requirements of this section.
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Section 3. The amendment of sections 501, 502(c) and 512 of
the act shall apply to taxable years beginning after the
effective date of this section.
Section 4. This act shall take effect in 180 days.
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