Don’t miss out on the Pennsylvania Tax Amnesty Program

Authored by: Frank Czekay

The Pennsylvania Budget Act of 2016 (Act 84 of 2016) established the Pennsylvania Tax Amnesty Program. The amnesty period will begin on April 21, 2017 and end on June 19, 2017. Many taxpayers will receive a notice from the Pennsylvania Department of Revenue informing them of potential eligibility for amnesty.

Program highlights

  • 100 percent penalty and 50 percent interest relief.
  • Participants who comply with all program requirements are not liable for any taxes of the same type due prior to Jan. 1, 2011.
  • Penalties and interest resulting from periods subsequent to Dec. 31, 2015, are not eligible. However, unpaid taxes, penalties and interest or unfiled returns for these periods must be paid and filed by taxpayers seeking participation in the program.
  • Potential applicants can contact their Baker Tilly tax professional or review the Department’s amnesty release to determine the most recent filing period eligible for the program.

Program requirements

A participant with eligible delinquencies must complete the following during the amnesty period:

  1. Complete an Online Amnesty Return;
  2. Pay taxes and one-half of the interest as reported on the return;
  3. File returns for all required historic tax periods;
  4. Amended returns for any periods for which the participant underreported liability; and
  5. File all required returns and pay tax for all periods subsequent to Dec. 31, 2015 by June 19, 2017.

To participate taxpayers must not:

  • Be under criminal investigation for any alleged tax law violation; or
  • Been a named defendant in a criminal complaint alleging a violation of any law imposing a tax administered by the Department prior to April 21, 2017;
  • Be a defendant in a pending criminal action for an alleged violation of any law imposing an eligible tax;
  • Have executed a voluntary disclosure agreement covering amnesty eligible periods; or
  • Have participated in the 2010 Tax Amnesty Program.

Program points to consider

  • Many locally imposed taxes are not covered by the program.
  • Participants cannot protest or pursue an administrative or judicial remedy with regard to returns filed or to claim a refund of any money paid pursuant to the program.
  • Taxpayer’s with active administrative or judicial appeals may participate in the program if all tax and one-half of the interest is paid during the Amnesty Period and the appeals relating to amnesty periods are dropped.
  • Taxpayers with existing deferred tax payment plans are eligible to participate in the program.
  • After June 19, 2017, a five percent non-participation penalty will be imposed on all amnesty eligible tax, penalty and interest that remain unpaid and/or unreported. Exceptions to the penalty may apply to deferred tax payment plans, active appeals and entities in bankruptcy.
  • The Department of Revenue may audit or investigate taxes paid and returns filed during the program period. Any additional taxes assessed pursuant to the audit are subject to normal provisions pertaining to imposition of interest and penalties.

Taxes included in the amnesty program

  • Agriculture Cooperative Tax
  • Bank and Trust Company Shares Tax
  • Capital Stock or Foreign Franchise Tax
  • Cigarette Tax
  • Corporate Loans Tax
  • Corporate Net Income Tax
  • Electric Cooperative Tax
  • Employer Withholding Tax
  • Financial Institutions/Title Insurance Company Shares Tax
  • Fuel Use Tax
  • Gross Premiums Tax
  • Gross Receipts Tax
  • Hotel Occupancy Tax (including Local Hotel Occupancy Tax for Philadelphia and Allegheny County)
  • Inheritance and Estate Tax
  • Malt Beverage Tax
  • Marine Underwriting Profits Tax
  • Motor Carriers Road Tax (for IFTA vehicles, PA portion only)
  • Motor Carriers Road Tax (PA road tax licensees only)
  • Motor Vehicle Carriers Gross Receipts Tax
  • Mutual Thrift Institutions Tax
  • Oil Company Franchise Tax
  • Parimutuel Wagering and Admissions Tax
  • Personal Income Tax
  • Public Transportation Assistance (PTA)
  • Public Utility Realty Tax
  • Realty Transfer Tax (including Local Realty Transfer Tax)
  • Sales and Use Tax (including Local Sales and Use Tax for Philadelphia and Allegheny County)
  • Surplus Lines Tax
  • Unauthorized Insurance Tax (monthly)
  • Vehicle Rental Tax (VRT)

For more information on this topic, or to learn how Baker Tilly insurance specialists can help, contact our team.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely.  The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.