PRINTER'S NO. 96
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
130
Session of
2021
INTRODUCED BY GLEIM, CIRESI, HILL-EVANS, KEEFER, RYAN,
R. MACKENZIE, ZIMMERMAN, GAYDOS, M. MACKENZIE AND N. NELSON,
JANUARY 12, 2021
REFERRED TO COMMITTEE ON FINANCE, JANUARY 12, 2021
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in personal income tax, further providing for
refund or credit of overpayment and providing for interest on
refund or credit of overpayments; and, in general provisions,
providing for interest on taxes due the Commonwealth and for
interest on overpayments; and making related repeals.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 346 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is amended to read:
Section 346. Refund or Credit of Overpayment.--(a) In the
case of any payment of tax not due under this article, the
department may credit the amount of such overpayment against any
liability in respect of the tax imposed by this article on the
part of the person who made the overpayment and shall refund any
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balance to such person.
[(b) The department is authorized to prescribe regulations
providing for the crediting against the estimated tax for any
taxable year of the amount determined to be an overpayment of
the tax for a preceding taxable year.]
(c) If the taxpayer has paid as an installment of estimated
tax more than the correct amount of such installment, the
overpayment shall be credited against the unpaid installments,
if any. If the amount paid, whether or not on the basis of
installments, exceeds the amount determined to be the correct
amount of the tax, the overpayment shall be credited or refunded
as provided in subsection (a) [or (b)].
Section 2. The act is amended by adding sections to read:
Section 346.1. Interest on Refund or Credit of
Overpayments.--Any tax paid by a taxpayer under this article
determined to be an overpayment shall be awarded interest in
accordance with Article XXX.
Section 3003.25. Interest on Taxes Due the Commonwealth.--
(a) All taxes due the Commonwealth shall bear simple interest
from the date the taxes become due and payable until paid. The
interest rate per annum during each calendar year shall be the
interest rate established by the Secretary of the Treasury of
the United States under the provisions of the Internal Revenue
Code of 1954 (68A Stat.3) , effective January 1 of that calendar
year without regard to any change or changes in the Federal
interest rate during that calendar year. No penalties shall bear
any interest.
(b) The payment of interest under this section shall not
relieve a person from the penalties, commissions or additional
tax prescribed by law for neglect or refusal to furnish timely
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returns or reports to the Department of Revenue or to pay a
claim due the Commonwealth from the person.
(c) The Secretary of Revenue shall transmit notice of the
rate of interest for each calendar year to the Legislative
Reference Bureau for publication in the Pennsylvania Bulletin.
(d) (1) In the case of a tentative tax, estimated tax or
installment payment, interest shall run on any unpaid amount
from the last day the payment is due to the date paid.
(2) In the case of tax which is resettled as a result of a
final change or correction of taxable income by the Commissioner
of Internal Revenue or an agency or court of the United States,
interest shall be computed on any additional tax due from thirty
days after the corporation receives notice of the final change
or correction until paid.
(e) Whenever the tax liability of a person is so affected by
any payment or credit, settlement or resettlement, assessment or
reassessment or determination or redetermination as to change
the interest liability of the person, the interest liability
shall be recomputed and adjusted by the Department of Revenue
and approved by the Department of the Auditor General in cases
in which the latter department is required to approve
settlements and resettlements, so as to correspond to the tax
liability as changed, without the necessity for the filing of a
petition or request by the person or by the Department of
Revenue and the Department of Auditor General.
Section 3003.26. Interest on Overpayments.--(a) Simple
interest shall be allowed and paid by the Commonwealth upon an
overpayment to the Commonwealth of any tax. The interest shall
be allowed and paid for the period during which the Commonwealth
retained the overpayment, beginning with the date of the
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overpayment, except that:
(1) A tax actually deducted and withheld at the source shall
be deemed to have been overpaid on the last day prescribed for
filing the return or report for the taxable year, determined
without regard to any extension of time for filing.
(2) An amount overpaid as estimated tax, tentative tax or
installment payment for a taxable year shall be deemed to have
been overpaid on the last day prescribed for filing the final
return or report for the taxable year, determined without regard
to any extension of time for filing.
(3) An overpayment made before the last day prescribed for
payment shall be considered made on the last day.
(4) An amount claimed to be overpaid with respect to which
an administrative review or appellate procedure is initiated in
the manner provided by law by the taxpayer shall be deemed to
have been overpaid sixty days following the date of initiation
of the review or procedure.
(5) (i) If an overpayment of tax is refunded or credited
within sixty days after the last date prescribed for filing the
final return or report of the tax, determined without regard to
any extension of time for filing, or, in case the final return
or report is filed after the last day, and is refunded or
credited within sixty days after the date the final return or
report is filed, no interest shall be allowed on the
overpayment.
(ii) For the purpose of this paragraph, a final return or
report shall be deemed to have been filed only if, when the
final return or report is received by the Department of Revenue,
the final return or report has been submitted on a permitted
form containing:
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(A) the taxpayer's name, address and identifying number and
the required signature; and
(B) sufficient required information, either on the permitted
form or attachments to the form, to permit the verification of
tax liability shown on the return.
(6) A tax paid to an officer, licensee or collector shall be
deemed to have been overpaid no earlier than the first date that
the tax is required by law to be reported and transmitted to the
Department of Revenue by the officer, licensee or collector.
(7) No overpayment of interest or penalty shall bear any
interest.
(b) Interest on overpayments shall be allowed and paid at
the rate as is prescribed for underpayments under section 346.1
less two per cent.
(c) Interest on overpayments of the tax imposed under this
article shall be allowed and paid at the same rate as is
prescribed for underpayments under section 346.1.
(d) Interest on overpayments shall be allowed and paid as
follows:
(1) In the case of a cash refund, from the date of the
overpayment to a date preceding the date of the Commonwealth's
refund check by not more than thirty days.
(2) In the case of a credit for an overpayment, from the
date of the overpayment to:
(i) the date of the Commonwealth's notice to the taxpayer of
the final determination of the credit; or
(ii) the date as of which the credit is applied, whichever
first occurs: provided, however, that in the case of a cash
refund of a previously determined credit, interest shall be
allowed and paid on the amount of the credit from a date ninety
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days after the filing of a petition for a cash refund to a date
preceding the date of the refund check by not more than thirty
days whether or not the refund check is accepted by the taxpayer
after tender to the taxpayer.
(3) The taxpayer's acceptance of the Commonwealth's check
shall be without prejudice to any right of the taxpayer to claim
any additional overpayment and interest thereon. Tender of a
refund check shall be deemed acceptance thereof for the purposes
of this section.
(e) Interest on overpayment shall not be allowed or paid if
a taxpayer indicates an intent to carry forward a refund or
credit to be applied in a succeeding taxable year.
(f) For purposes of this section, "overpayment" means a
payment of tax which is determined in the manner provided by law
not to be legally due.
Section 3. Repeals are as follows:
(1) The General Assembly finds that the repeals under
paragraph (2) are necessary to effectuate this act.
(2) Sections 806 and 806.1 of the act of April 9, 1929
(P.L.343, No.176), known as The Fiscal Code, are repealed.
Section 4. A reference in any other act to former section
806 or 806.1 of the act of April 9, 1929 (P.L.343, No.176),
known as The Fiscal Code, shall be deemed to be a reference to
section 3003.25 or 3003.26, respectively, of the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
Section 5. This act shall take effect in 60 days.
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