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 definitions of "farmer" and "farming"; and
23further providing for declaration and payment of income taxes
24and for withholding 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
29amended by adding definitions to read:

1Section 501. Definitions.

2The following words and phrases when used in this chapter
3shall have the meanings given to them in this section unless the
4context clearly indicates otherwise:

5* * *

6"Farmer." An individual whose gross income from farming for
7a taxable year equals at least two-thirds of his gross income
8from all sources for that taxable year.

9"Farming." The term shall include the following activities,
10when engaged in as a regular business:

11(1) The business of producing food products or other
12useful or valuable growths or crops by tilling and
13cultivating the soil and by breeding, raising and feeding
14cattle, livestock, bees, poultry or other animals that
15produce a food product or are themselves a food product. The
16term does not include:

17(i) The breeding or raising of dogs, cats and other
18pets or game animals, birds, fish or other animals
19intended for use in sporting or recreational activities.

20(ii) The operation of stockyards or slaughterhouses.

21(2) The business of producing vegetables, vegetable
22plants, fruits and nursery stock, including the operation of
23commercial vegetable greenhouses and nurseries. The term does
24not include the business of servicing plants owned by other
25persons.

26(3) The business of producing flowers, decorative or
27shade trees, plants and shrubs, in the field, nursery or
28greenhouse. The term does not include the raising of trees as
29timber or lumbering and logging or sawmill operations.

30(4) The business of breeding, feeding and raising cattle

1and other milk-producing animals and the production of feed
2for cattle and other milk-producing animals by the owner of
3the animals. The term does not include pasteurizing or
4homogenizing operations or the making of butter, cheese and
5ice cream.

6(5) The propagation and raising of ranch-raised, fur-
7bearing animals.

8(6) The propagation of game birds for commercial
9purposes by holders of propagation permits issued under 34
10Pa.C.S. (relating to game).

11(7) The propagation of fish and other aquatic animals
12for commercial use as a food or food product by holders of
13propagation permits issued under 30 Pa.C.S. (relating to
14fish).

15* * *

16Section 2. Section 502(c) of the act, added July 2, 2008
17(P.L.197, No.32), is amended to read:

18Section 502. Declaration and payment of income taxes.

19* * *

20(c) Declaration and payment.--Except as provided in
21subsection (a)(2), taxpayers shall declare and pay income taxes
22as follows:

23(1) Every taxpayer shall, on or before April 15 of the
24succeeding year, make and file with the resident tax officer,
25a final return showing the amount of taxable income received
26during the period beginning January 1 of the current year and
27ending December 31 of the current year, the total amount of
28tax due on the taxable income, the amount of tax paid, the
29amount of tax that has been withheld under section 512 and
30the balance of tax due. All amounts reported shall be rounded

1to the nearest whole dollar. At the time of filing the final
2return, the taxpayer shall pay the resident tax officer the
3balance of the tax due or shall make demand for refund or
4credit in the case of overpayment. Taxpayers may use the 
5Annual Local Earned Income Tax Return form available from the 
6department's Internet website to file the final return.

7(2) [(i) Every taxpayer making net profits shall, by
8April 15 of the current year, make and file with the
9resident tax officer a declaration of the taxpayer's
10estimated net profits during the period beginning January
111 and ending December 31 of the current year, and shall
12pay to the resident tax officer in four equal quarterly
13installments the tax due on the estimated net profits.
14The first installment shall be paid at the time of filing
15the declaration, and the other installments shall be paid
16on or before June 15 of the current year, September 15 of
17the current year and January 15 of the succeeding year,
18respectively.

19(ii) Any taxpayer who first anticipates any net
20profit after April 15 of the current year shall make and
21file the declaration required on or before June 15 of the
22current year, September 15 of the current year or
23December 31 of the current year, whichever date next
24follows the date on which the taxpayer first anticipates
25such net profit, and shall pay to the resident tax
26officer in equal installments the tax due on or before
27the quarterly payment dates that remain after the filing
28of the declaration.

29(iii) Every taxpayer shall, on or before April 15 of
30the succeeding year, make and file with the resident tax

1officer a final return showing the amount of net profits
2earned or received based on the method of accounting used
3by the taxpayer during the period beginning January 1 of
4the current year, and ending December 31 of the current
5year, the total amount of tax due on the net profits and
6the total amount of tax paid. At the time of filing the
7final return, the taxpayer shall pay to the resident tax
8officer the balance of tax due or shall make demand for
9refund or credit in the case of overpayment. Any taxpayer
10may, in lieu of paying the fourth quarterly installment
11of the estimated tax, elect to make and file with the
12resident tax officer on or before January 31 of the
13succeeding year, the final return.

14(iv) The department, in consultation with the
15Department of Revenue, shall provide by regulation for
16the filing of adjusted declarations of estimated net
17profits and for the payments of the estimated tax in
18cases where a taxpayer who has filed the declaration
19required under this subsection anticipates additional net
20profits not previously declared or has overestimated
21anticipated net profits.]

22(v) Every taxpayer who discontinues business prior
23to December 31 of the current year, shall, within 30 days
24after the discontinuance of business, file a final return
25as required under this paragraph and pay the tax due.

26(3) [Every] (i) Except as provided under this 
27paragraph, every taxpayer who receives any other taxable
28income not subject to withholding under section 512(3)
29which totals at least $12,000 shall make and file with
30the resident tax officer a quarterly return on or before

1April 15 of the current year, [June] July 15 of the
2current year, [September] October 15 of the current year,
3and January 15 of the succeeding year, setting forth the
4aggregate amount of taxable income not subject to
5withholding by the taxpayer during the three-month
6periods ending March 31 of the current year, June 30 of
7the current year, September 30 of the current year, and
8December 31 of the current year, respectively, and
9subject to income tax, together with such other
10information as the department may require. A taxpayer 
11may, in lieu of setting forth the aggregate amount of 
12taxable income not subject to withholding by the taxpayer 
13during a three-month period of the current year, utilize 
14one-fourth of the total income not subject to withholding 
15reported on the taxpayer's annual return required under 
16paragraph (1) for the year prior to the current year.

17(ii) Every taxpayer filing a return shall, at the
18time of filing the return, pay to the resident tax
19officer the amount of income tax due.

20(iii) The department shall establish criteria under
21which the tax officer may waive the quarterly return and
22payment of the income tax and permit a taxpayer to file
23the receipt of taxable income on the taxpayer's annual
24return and pay the income tax due on or before April 15
25of the succeeding year.

26(iv) A farmer shall make and file with the resident
27tax officer a single return on or before January 15 of
28the succeeding year, setting forth the aggregate amount
29of taxable income not subject to withholding by the
30taxpayer during the 12-month period ending on December 31

1of the current year. In lieu of setting forth the
2aggregate amount of taxable income not subject to
3withholding by the farmer during the 12-month period
4ending on December 31 of the current year, a farmer may
5utilize his total income not subject to withholding
6reported on the taxpayer's annual return required under
7paragraph (1) for the year prior to the current year.
8Every farmer filing a return shall, at the time of filing
9the return, pay to the resident tax officer the amount of
10income tax due. In lieu of filing the fourth quarterly
11return required under this paragraph, a farmer may file
12his final return with the resident tax officer on or
13before March 1 of the succeeding year.

14(v) In lieu of filing the fourth quarterly return
15required under this paragraph, a taxpayer may file his
16final return with the resident tax officer on or before
17January 31 of the succeeding year.

18(4) If any filing date under this subsection falls on a
19Saturday, Sunday or legal holiday, the taxpayer may file on
20the next business day.

21(5) A taxpayer may use the Quarterly Estimated Earned
22Income Tax Return form available from the department's
23Internet website to fulfill the quarterly return requirement
24under paragraph (3).

25Section 3. Section 512(2), (4), (5) and (7)(i) of the act,
26added July 2, 2008 (P.L.197, No.32), are amended and the section
27is amended by adding paragraphs to read:

28Section 512. Withholding and remittance.

29For taxable years commencing on and after January 1, 2012, or
30earlier taxable years if specified by a tax collection district,

1income taxes shall be withheld, remitted and reported as
2follows:

3* * *

4(2) An employer shall require each new employee to
5complete a certificate of residency form, which shall be an
6addendum to the Federal Employee's Withholding Allowance
7Certificate (Form W-4). An employer shall also require any
8employee who changes their address or domicile to complete a
9certificate of residency form. Upon request, certificate of
10residency forms shall be provided by the department. The
11certificate of residency form shall provide information to
12help identify the political subdivisions where an employee
13lives and works. A certificate of residency form available 
14from the department's Internet website shall meet the 
15requirements of this paragraph.

16* * *

17(4) Except as set forth in paragraph (5), [within 30
18days] by the last day of the month following the end of each
19calendar quarter, every employer shall file a quarterly
20return and pay the amount of income taxes deducted during the
21preceding calendar quarter to the tax officer for the place
22of employment of each employee. The form shall show the name,
23address and Social Security number of each employee, the
24compensation of the employee during the preceding three-month
25period, the income tax deducted from the employee, the
26political subdivisions imposing the income tax upon the
27employee, the total compensation of all employees during the
28preceding calendar quarter, the total income tax deducted
29from the employees and paid with the return and any other
30information prescribed by the department. Employers may use 

1the Quarterly Earned Income Tax Return form available from 
2the department's Internet website to fulfill the quarterly 
3return requirement.

4(5) Notwithstanding paragraph (4), the provisions of
5this paragraph shall apply if an employer has more than one
6place of employment in more than one tax collection district.
7[Within 30 days following] By the last day of each month
8following the end of each calendar month, the employer may
9file the return required by paragraph (4) and pay the total
10amount of income taxes deducted from employees in all work
11locations during the preceding month to the tax officer for
12either the tax collection district in which the employer's
13payroll operations are located or as determined by the
14department. The return and income taxes deducted shall be
15filed and paid electronically. The employer must file a
16notice of intention to file combined returns and make
17combined payments with the tax officer for each place of
18employment at least one month before filing its first
19combined return or making its first combined payment. This
20paragraph shall not be construed to change the location of an
21employee's place of employment for purposes of nonresident
22tax liability.

23* * *

24(7) On or before February 28 of the succeeding year,
25every employer shall file with the tax officer where income
26taxes have been deducted and remitted pursuant to paragraph
27(3):

28(i) An annual return showing, for the period 
29beginning January 1 of the current year and ending 
30December 31 of the current year, the total amount of 

1compensation paid, the total amount of income tax 
2deducted, the total amount of income tax paid to the tax 
3officer and any other information prescribed by the 
4department. An employer may use the Annual Reconciliation 
5of Earned Income Tax Withheld from Wages form available 
6from the department's Internet website to fulfill the 
7annual return requirement.

8* * *

9(10) (i) Except as provided under subparagraph (ii), an
10employer may file a quarterly return under paragraph (4)
11or an individual withholding statement under paragraph
12(7) electronically in a manner prescribed by the tax
13officer.

14(ii) For employers with less than 250 employees, a
15tax officer may not require the electronic filing of any
16of the documents under subparagraph (i) unless all tax
17officers in this Commonwealth utilize the same electronic
18data format and web interface for electronic data
19submissions.

20(11) If any filing date under this section falls on a
21Saturday, Sunday or legal holiday, the employer may file on
22the next business day.

23Section 4. The amendment or addition of sections 501, 502(c)
24and 512(2), (4), (5), (7)(i), (10) and (11) of the act shall
25apply to taxable years beginning after the effective date of
26this section.

27Section 5. This act shall take effect in 180 days.