Senate Panel Advances PICPA-Supported Tax Measure
The state Senate Finance Committee approved a PICPA-supported measure that would establish a 10-year period for the Pennsylvania Department of Revenue (DOR) to collect all taxes that it administers (excepting the inheritance tax). House Bill 17, sponsored by Rep. Frank Ryan, CPA (R-Lebanon), was reported from committee by a vote of 7-3.
House Bill 17 would establish the following:
- A 10-year period for the DOR to commence an action to collect a tax that it administers (with the exception of the inheritance tax)
- A 10-year period for the DOR to induce the filing of a return or assess a tax liability for a nonfiled tax period
- A three-year period to commence a criminal prosecution under tax statutes that the DOR administers
The bill provides several safeguards to prevent a taxpayer from willfully avoiding or evading the obligation of filing returns and paying taxes due, including criminal prosecution for serious offenses.
The 10-year period is not applicable, and the DOR shall have no time limitation, to collect taxes in the following cases:
- For a taxpayer that collected or withheld trust fund taxes, but willfully failed, grossly neglected, or refused to remit
- For a taxpayer filing a false or fraudulent tax return or report or willfully failing to file a tax return or report
- For a taxpayer attempting to evade or defeat a tax
- For a tax offense for which a taxpayer has been criminally charged and convicted and liabilities remain unpaid
- For liabilities of eligible taxes unknown to the department that have not been extinguished prior to the commencement of a subsequently enacted or approved tax amnesty program
The committee also reported Senate Bill 74, which would establish a pediatric cancer research tax credit. Sponsored by Sen. Scott Martin (R-Lancaster), the bill allows companies to apply for a tax credit after making an eligible donation to a Pennsylvania pediatric cancer research hospital.
Both bills now go before the full Senate.
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The Week of Oct. 28 in the General Assembly
Pennsylvania lawmakers are busily working through their chambers’ legislative calendars before the General Election recess. There is still a lot of unfinished legislative business. Here are a few things on tap this week in the General Assembly.
On Oct. 29, the House Finance Committee’s Subcommittee on Tax Modernization and Reform convenes an informational hearing on state tax reform. The PICPA government relations team will be live tweeting from the hearing.
Other hearings of note include the House Environmental Resources and Energy Committee, which will hold a public hearing on Pennsylvania CO2 and climate, and a joint meeting of the House and Senate Local Government Committees with the state Department of Community and Economic Development.
Here is a complete list of upcoming meetings and public hearings for the Pennsylvania General Assembly.
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PICPA Supports the Fiscal State of the Nation Resolution
The U.S. government has, over time, accumulated deficits of $21.5 trillion. To put that in perspective, if you stacked 21.5 trillion $1 bills, it would go to the moon and back more than three times.
U.S. Reps. Kathleen Rice (D-N.Y.) and Andy Barr (R-Ky.) introduced the Fiscal State of the Nation resolution with 103 co-sponsors. It provides for “a joint hearing of the Committees on the Budget of the House of Representatives and the Senate to receive a presentation from the Comptroller General of the United States regarding the audited financial statement of the executive branch.” The resolution ensures that members of Congress are aware of the information in the federal financial statements and helps them better understand how current and future policy may affect the nation’s long-term fiscal health.
Both the PICPA and the AICPA support the Fiscal State of the Nation resolution. The CPA profession believes that the consolidated federal financial statements and the Government Accountability Office’s audit report provide valuable information on the financial condition of the federal government, and policymakers should consider this information while making key decisions.
To date, through PICPA’s lobbying efforts, 11 of Pennsylvania’s 18 members of Congress have signed onto the resolution.
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Senate Approves Legislation to Repeal State’s Asset Tax Law
State Rep. Aaron Bernstine’s (R-Beaver/Butler/Lawrence) legislation to repeal a provision in state law that could be used as a gateway to implement a wealth tax on personal property passed the Senate unanimously.
House Bill 1085 would repeal a law originally enacted in 1935. A wealth tax is a levy on the total value of personal assets, including bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, financial securities, and personal trust.
House Bill 1085 is headed to the governor’s desk for his signature.
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Firefighter Tax Credit Bill Earns Committee Approval
The House Finance Committee unanimously approved legislation sponsored by state Rep. Clint Owlett (R-Tioga/Bradford/Potter) that would offer a tax credit to volunteers who pay for equipment out of their own pockets.
House Bill 376 would provide a tax credit of up to $500 to volunteers who purchase firefighting or other relevant equipment using their own money. Under the bill, any tax credit amount claimed by a volunteer emergency responder would have to be used in the taxable year in which the purchase of equipment was made. To receive a tax credit, a volunteer emergency responder would have to provide documentation to the Department of Revenue showing he or she is an active volunteer and the type and purchase price of the equipment.
Owlett’s bill is one of several being considered by the state House as part of its “Heroes and Helpers” initiative. The proposals stem from recommendations of the SR6 Commission, which two years ago set out to examine the decline in volunteer first responders. The measures are aimed at providing support and assistance to volunteer fire and emergency services organizations across Pennsylvania as they work to recruit and retain the volunteers they need to continue answering calls for help in their communities.
Bills passed by the House this week include the following:
- House Bill 1673 would allow volunteer fire relief money to be used for retention of existing volunteer members and incentives for recruiting new volunteer firefighters
- Senate Bill 146 would make online training more readily available to current and prospective first responders
- House Bill 1816 would increase the maximum loan limits available to volunteer fire companies and emergency medical services through the Volunteer Loan Assistance Program
- House Bill 1705 would give school districts the option of enacting a tax credit against the property tax liability of active volunteers of a fire or EMS company
- House Bill 1839 would give counties the option of providing a property tax credit to qualified active volunteers to be applied against an active volunteer’s property tax liability
- House Bill 1773 would create the Tuition Assistance for Active Volunteers Program for first responders
- House Bill 1786 would create the First Responder Loan Forgiveness Program for indebted college graduates who are active members of an emergency medical services agency, volunteer fire company, or volunteer rescue company. Up to $16,000 of the graduate’s loans would be forgiven after four years of service
- House Bill 1780 would exempt volunteer fire, rescue and ambulance companies from the Right-to-Know Law (RTK)
- House Bill 269 would provide an exemption from the Realty Transfer Tax (RTT) for the transfer of real estate from the surviving spouse or minor child of a first responder, within five years of the first responder’s death
- House Bill 732 would provide an exemption from the RTT for the transfer of real estate to or by a volunteer emergency medical services company, volunteer fire company, or volunteer rescue company
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Ballot Modernization Bill Earns Senate Approval
The state Senate approved a measure that would remove an antiquated ballot requirement that increases costs to local taxpayers. Existing state law requires a separate ballot or a separate column on voting machines when voting for the retention of justices, judges, and justices of the peace.
Senate Bill 413, sponsored by Sen. Scott Martin (R-Lancaster), would eliminate this mandate. The bill addresses the position that the current requirement places a higher cost on counties and creates confusion among voters, many of whom skip the retention questions.
The measure would require an amendment to the Pennsylvania Constitution. Amendments must be approved in two consecutive legislative sessions before being decided by voters via referendum.
Senate Bill 413 is with the House of Representatives for consideration.
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Candidates Selected for State Senate Special Election
Candidates for the Jan. 14, 2020, special election to fill the state Senate seat for the 48th District (Lebanon County) have been selected. David Arnold (R), a district attorney, will face off against Michael Schroeder (D), a college professor. Both candidates were hand-picked by their respective political parties.
Arnold, 47, is in his fourth term as Lebanon County’s chief prosecutor. Prior to his election, Arnold served an assistant district attorney and worked in private practice.
Schroeder is an associate professor of history at Lebanon Valley College. He is executive director of the Quittapahilla Creek Garbage Museum, president of the Friends of Old Annville, president of the Quittapahilla Watershed Association, and vice president of Lebanon Pipeline Awareness.
The election is being held to replace former Sen. Mike Folmer, who resigned last month after being arrested on child pornography charges.
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