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 definition of <-"farmer" and
23"farming"; and further providing for declaration and payment
24of income taxes and 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 a definition 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* * *

<-16"Farming." Includes all activities that are farming for
17purposes of section 325 of the act of March 4, 1971 (P.L.6, 
18No.2), known as the Tax Reform Code of 1971.

19* * *

20Section 2. Section 502(c) of the act, added July 2, 2008
21(P.L.197, No.32), is amended <-and the section is amended by 
22adding subsections to read:

23Section 502. Declaration and payment of income taxes.

24* * *

25(c) Declaration and payment.--Except as provided in
26[subsection (a)(2)<-] subsections (a)(2) and (d), taxpayers shall
27declare and pay income taxes as follows:

28(1) Every taxpayer shall, on or before April 15 of the
29succeeding year, make and file with the resident tax officer,
30a final return showing the amount of taxable income received

1during the period beginning January 1 of the current year and
2ending December 31 of the current year, the total amount of
3tax due on the taxable income, the amount of tax paid, the
4amount of tax that has been withheld under section 512 and
5the balance of tax due. All amounts reported shall be rounded
6to the nearest whole dollar. At the time of filing the final
7return, the taxpayer shall pay the resident tax officer the
8balance of the tax due or shall make demand for refund or
9credit in the case of overpayment. Taxpayers may use the 
10Annual Local Earned Income Tax Return form available from the 
11department's Internet website to file the final return.

12(2) <-[(i) Every taxpayer making net profits shall, by
13April 15 of the current year, make and file with the
14resident tax officer a declaration of the taxpayer's
15estimated net profits during the period beginning January
161 and ending December 31 of the current year, and shall
17pay to the resident tax officer in four equal quarterly
18installments the tax due on the estimated net profits.
19The first installment shall be paid at the time of filing
20the declaration, and the other installments shall be paid
21on or before [June<-] July 15 of the current year,
22[September<-] October 15 of the current year and January 15
23of the succeeding year, respectively.

24(ii) Any taxpayer who first anticipates any net
25profit after April 15 of the current year shall make and
26file the declaration required on or before [June<-] July 15
27of the current year, [September<-] October 15 of the
28current year or [December 31 of the current year<-] January 
2915 of the succeeding year, whichever date next follows
30the date on which the taxpayer first anticipates such net

1profit, and shall pay to the resident tax officer in
2equal installments the tax due on or before the quarterly
3payment dates that remain after the filing of the
4declaration.

<-5(ii.1) A taxpayer will be considered to have met the
6requirements for declaration and minimum payment of
7estimated tax for any year in which the taxpayer timely
8declares and makes quarterly payments of estimated tax in
9amounts that equal at least one-fourth of the total
10income and net profits tax due and not withheld under
11section 512 in the previous year, provided that the
12taxpayer can show through the taxpayer's annual earned
13income tax return filed for the previous year that tax
14liability was incurred.

15(iii) Every taxpayer shall, on or before April 15 of
16the succeeding year, make and file with the resident tax
17officer a final return showing the amount of net profits
18earned or received based on the method of accounting used
19by the taxpayer during the period beginning January 1 of
20the current year, and ending December 31 of the current
21year, the total amount of tax due on the net profits and
22the total amount of tax paid. At the time of filing the
23final return, the taxpayer shall pay to the resident tax
24officer the balance of tax due or shall make demand for
25refund or credit in the case of overpayment. Any taxpayer
26may, in lieu of paying the fourth quarterly installment
27of the estimated tax, elect to make and file with the
28resident tax officer on or before January 31 of the
29succeeding year, the final return.

30(iv) The department, in consultation with the

1Department of Revenue, shall provide by regulation for
2the filing of adjusted declarations of estimated net
3profits and for the payments of the estimated tax in
4cases where a taxpayer who has filed the declaration
5required under this subsection anticipates additional net
6profits not previously declared or has overestimated
7anticipated net profits.<-]

8(v) Every taxpayer who discontinues business prior
9to December 31 of the current year, shall, within 30 days
10after the discontinuance of business, file a final return
11as required under this paragraph and pay the tax due.

12(3) [Every<-] (i) Except as provided under this 
13paragraph, every taxpayer who receives any other taxable
14income <-or net profits not subject to withholding under
15section 512(3) <-which totals at least $12,000 shall make
16and file with the resident tax officer a quarterly return
17on or before April 15 of the current year, [June] July 15
18of the current year, [September] October 15 of the
19current year, and January 15 of the succeeding year,
20setting forth the aggregate amount of taxable income not
21subject to withholding by the taxpayer during the three-
22month periods ending March 31 of the current year, June
2330 of the current year, September 30 of the current year,
24and December 31 of the current year, respectively, and
25subject to income tax, together with such other
26information as the department may require. <-A taxpayer 
27may, in lieu of setting forth the aggregate amount of 
28taxable income not subject to withholding by the taxpayer 
29during a three-month period of the current year, utilize 
30one-fourth of the total income not subject to withholding
 

1reported on the taxpayer's annual return required under 
2paragraph (1) for the year prior to the current year.

3(ii) Every taxpayer filing a return shall, at the
4time of filing the return, pay to the resident tax
5officer the amount of income tax due.

6(iii) The department shall establish criteria under
7which the tax officer may waive the quarterly return and
8payment of the income tax and permit a taxpayer to file
9the receipt of taxable income on the taxpayer's annual
10return and pay the income tax due on or before April 15
11of the succeeding year.

12(iv) A farmer shall make and file with the resident
13tax officer a single return on or before January 15 of
14the succeeding year, setting forth the aggregate amount
15of taxable income not subject to withholding by the
16taxpayer during the 12-month period ending on December 31
17of the current year. In lieu of setting forth the
18aggregate amount of taxable income not subject to
19withholding by the farmer during the 12-month period
20ending on December 31 of the current year, a farmer may
21utilize his total income not subject to withholding
22reported on the taxpayer's annual return required under
23paragraph (1) for the year prior to the current year.
24Every farmer filing a return shall, at the time of filing
25the return, pay to the resident tax officer the amount of
26income tax due. In lieu of filing the fourth quarterly
27return required under this paragraph, a farmer may file
28his final return with the resident tax officer on or
29before March 1 of the succeeding year.

30(v) In lieu of filing the fourth quarterly return

1required under this paragraph, a taxpayer may file his
2final return with the resident tax officer on or before
3January 31 of the succeeding year.

4(4) If any filing date under this subsection falls on a
5Saturday, Sunday or legal holiday, the taxpayer may file on
6the next business day.

7(5) A taxpayer may use the Quarterly Estimated Earned
8Income Tax Return form available from the department's
9Internet website to fulfill the quarterly return requirement
10under paragraph (3).

<-11Every taxpayer filing a return shall, at the time of filing
12the return, pay to the resident tax officer the amount of
13income tax due. The department shall establish criteria under
14which the tax officer may waive the quarterly return and
15payment of the income tax and permit a taxpayer to file the
16receipt of taxable income on the taxpayer's annual return and
17pay the income tax due on or before April 15 of the
18succeeding year.

19(4) If any date prescribed in this section for filing or
20payment of tax should fall on a Saturday, Sunday or legal
21holiday, the taxpayer may file or make payment on the next
22business day.

23(d) Filing of estimated tax by taxpayers whose major source
24of gross income is from farming.--Notwithstanding any other
25provision of this section, a declaration of estimated tax of an
26individual having an estimated gross income from farming for the
27taxable year which is at least two-thirds of his total estimated
28gross income for the taxable year may be filed at any time on or
29before January 15 of the succeeding year, but if the farmer
30files a final return and pays the entire tax by March 1, the

1return may be considered as his declaration due on or before
2January 15.

3(e) Restrictions.--In administering the provisions of this
4section, no political subdivision, tax collection committee or
5tax officer may:

6(1) Prohibit a taxpayer from filing any return or
7declaration required under this section in person or by first
8class mail.

9(2) Prohibit a taxpayer from using or filing any local
10income tax return form, estimated tax return form or other
11form related to any filing required under this section that
12has been posted by the department on its Internet website.

13(3) Impose a penalty for failing to timely file a
14quarterly estimated tax return for which no payment of
15estimated tax was due, as shown in the taxpayer's annual
16earned income tax return.

17Section 3. Section <-512(2), (4), (5) and (7)(i) 512 of the
18act, added July 2, 2008 (P.L.197, No.32), <-are is amended and the
19section is amended by adding paragraphs to read:

20Section 512. Withholding and remittance.

<-21(a) General rule.--For taxable years commencing on and after
22January 1, 2012, or earlier taxable years if specified by a tax
23collection district, income taxes shall be withheld, remitted
24and reported as follows:

<-25* * *

<-26(1) Every employer having an office, factory, workshop, 
27branch, warehouse or other place of business within a tax 
28collection district who employs one or more persons, other 
29than domestic servants, for a salary, wage, commission or 
30other compensation, who has not previously registered, shall,
 

1within 15 days after becoming an employer, register with the 
2tax officer the name and address of the employer and such 
3other information as the department may require.

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

26(4) Except as set forth in paragraph (5), [within 30
27days] by the last day of the month following the end of each
28calendar quarter, every employer shall file a quarterly
29return and pay the amount of income taxes deducted during the
30preceding calendar quarter to the tax officer for the place

1of employment of each employee. The form shall show the name,
2address and Social Security number of each employee, the
3compensation of the employee during the preceding three-month
4period, the income tax deducted from the employee, the
5political subdivisions imposing the income tax upon the
6employee, the total compensation of all employees during the
7preceding calendar quarter, the total income tax deducted
8from the employees and paid with the return and any other
9information prescribed by the department. <-Employers may use 
10the Quarterly Earned Income Tax Return form available from 
11the department's Internet website to fulfill the quarterly 
12return requirement.

13(5) Notwithstanding paragraph (4), the provisions of
14this paragraph shall apply if an employer has more than one
15place of employment in more than one tax collection district.
16[Within 30 days following] By the last day of each month
17following the end of each calendar month, 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* * *

<-3(6) Any employer who, for two of the preceding four
4quarterly periods, has failed to deduct the proper income
5tax, or any part of the income tax, or has failed to pay over
6the proper amount of income tax as required by paragraph (3)
7to the tax collection district, may be required by the tax
8officer to file returns and pay the income tax monthly. In
9such cases, payments of income tax shall be made to the tax
10officer on or before the last day of the month succeeding the
11month for which the income tax was withheld.

12(7) On or before February 28 of the succeeding year,
13every employer shall file with the tax officer where income
14taxes have been deducted and remitted pursuant to paragraph
15(3):

16(i) An annual return showing, for the period 
17beginning January 1 of the current year and ending 
18December 31 of the current year, the total amount of 
19compensation paid, the total amount of income tax 
20deducted, the total amount of income tax paid to the tax 
21officer and any other information prescribed by the 
22department. <-An employer may use the Annual Reconciliation 
23of Earned Income Tax Withheld from Wages form available 
24from the department's Internet website to fulfill the 
25annual return requirement.

26* * *

27(10) (i) Except as provided under subparagraph (ii), an
28employer may file a quarterly return under paragraph (4)
29or an individual withholding statement under paragraph
30(7) electronically in a manner prescribed by the tax

1officer.

2(ii) For employers with less than 250 employees, a
3tax officer may not require the electronic filing of any
4of the documents under subparagraph (i) unless all tax
5officers in this Commonwealth utilize the same electronic
6data format and web interface for electronic data
7submissions.

8(11) If any filing date under this section falls on a
9Saturday, Sunday or legal holiday, the employer may file on
10the next business day.

<-11(ii) An individual withholding statement, which may
12be integrated with the Federal Wage and Tax Statement
13(Form W-2), for each employee employed during all or any
14part of the period beginning January 1 of the current
15year and ending December 31 of the current year, setting
16forth the address and Social Security number, the amount
17of compensation paid to the employee during the period,
18the amount of income tax deducted, the amount of income
19tax paid to the tax officer, the numerical code
20prescribed by the department representing the tax
21collection district where the payments required by
22paragraphs (4) and (5) were remitted and any other
23information required by the department. Every employer
24shall furnish one copy of the individual withholding
25statement to the employee for whom it is filed.

26(8) Any employer who discontinues business prior to
27December 31 of the current year shall, within 30 days after
28the discontinuance of business, file returns and withholding
29statements required under this section and pay the income tax
30due.

1(9) Except as otherwise provided in section 511, an
2employer who willfully or negligently fails or omits to make
3the deductions required by this subsection shall be liable
4for payment of income taxes which the employer was required
5to withhold to the extent that the income taxes have not been
6recovered from the employee. The failure or omission of any
7employer to make the deductions required by this section
8shall not relieve any employee from the payment of the income
9tax or from complying with the requirements for filing of
10declarations and returns.

11(b) Date of filing.--If any date prescribed in this section
12for filing or payment of tax should fall on a Saturday, Sunday
13or legal holiday, the filing or payment may be performed on the
14next business day.

15(c) Forms.--In administering the provisions of this section,
16no political subdivision, tax collection committee or tax
17officer may prohibit the use or filing of any applicable form
18posted by the department on its Internet website to meet the
19requirements of this section.

20Section 4. The amendment or addition of sections 501, 502(c)
21and <-512(2), (4), (5), (7)(i), (10) and (11) 512 of the act shall
22apply to taxable years beginning after the effective date of
23this section.

24Section 5. This act shall take effect in 180 days.