PROPOSED RULEMAKING
DEPARTMENT OF REVENUE
[61 PA. CODE CH. 117]
Return of Information as to Payment in Excess of $10
[27 Pa.B. 2125] The Department of Revenue (Department), under authority contained in section 354 of the Tax Reform Code of 1971 (TRC) (72 P. S. § 7354), proposes an amendment to § 117.18 (relating to return of information as to payment in excess of $10) to read as set forth in Annex A. Section 354 of the TRC specifically authorizes and empowers the Department to prescribe, adopt, promulgate and enforce rules and regulations relating to any matter or thing pertaining to the administration and enforcement of the provisions of and the collection of taxes imposed by Article III of the TRC (72 P. S. §§ 7301--7361) relating to Personal Income Tax.
Purpose
In March 1996, the Department adopted a final-form regulation that amended § 117.18 in addition to other Personal Income Tax regulatory sections. During the final stages of the adoption process, a public comment was made regarding the information return required to be made by a regulated investment company. As a result of this public comment, the Department has proposed an amendment to § 117.18.
Explanation of Regulatory Requirements
This proposed amendment allows a regulated investment company to meet the information return requirement of § 117.18(c) in two additional ways. A regulated investment company that furnishes a Federal Form 1099-DIV to its distributees may now attach or provide a separate statement that, together with the information on the Federal form, allows distributees to compute the correct amount of Pennsylvania exempt-interest dividends. A regulated investment company that is not required to furnish its distributees with a Federal Form 1099-DIV may provide a statement that allows the distributees to compute the amount of taxable dividend distributions and any adjustment to basis or taxable gain for the taxable year.
Affected Parties
Regulated investment companies that have chosen not to report their investors' items of income and distribution using either the Pennsylvania Form 1099-DIV or a separate statement showing the ratio of Pennsylvania exempt-interest dividends to total ordinary dividends reported on the Federal Form 1099-DIV will be affected by this proposed amendment.
Fiscal Impact
The Department has determined that the proposed amendment will have no fiscal impact on the Commonwealth.
Paperwork
The proposed amendment will not generate additional paperwork for the public or the Commonwealth.
Effectiveness/Sunset Date
The proposal will become effective upon final publication in the Pennsylvania Bulletin. This regulation is scheduled for review within 5 years of final publication. No sunset date has been assigned.
Contact Person
Interested persons are invited to submit in writing comments, suggestions or objections regarding the proposed amendment to Anita M. Doucette, Office of Chief Counsel, Department of Revenue, Dept. 281061, Harrisburg, PA 17128-1061, within 30 days of the date of the publication of this notice in the Pennsylvania Bulletin.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on April 23, 1997, the Department submitted a copy of this proposed amendment to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Finance and the Senate Committee on Finance. In addition to submitting the proposal, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Department in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available to the public upon request.
If IRRC has objections to any portion of the proposed amendment, it will notify the Department within 30 days of the close of the public comment period. The notification shall specify the regulatory review criteria which have not been met by that portion. The Regulatory Review Act specifies detailed procedures for review of objections raised, prior to final publication of the regulation, by the Department, the General Assembly and the Governor.
ROBERT A. JUDGE, Sr.,
SecretaryFiscal Note: 15-380. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 61. REVENUE
PART I. DEPARTMENT OF REVENUE
Subpart B. GENERAL FUND REVENUES
ARTICLE V. PERSONAL INCOME TAX
CHAPTER 117. RETURN AND PAYMENT OF TAX § 117.18. Return of information as to payment in excess of $10.
* * * * * (c) Pennsylvania information return. The Pennsylvania information return shall be made in one of the following ways:
* * * * * (2) If a regulated investment company furnishes Federal Form 1099-DIV to a recipient in compliance with Federal Income Tax requirements, the Pennsylvania information return may be made by attaching [a] or providing one of the following:
(i) A separate statement showing the ratio of Pennsylvania exempt-interest dividends paid to total ordinary dividends reported on the Federal form.
(ii) A separate statement showing other information, provided that the statement and Federal form contain sufficient information to enable distributees to compute the correct amount of Pennsylvania exempt-interest dividends.
(3) If a regulated investment company is not required to furnish Federal Form 1099-DIV, the Pennsylvania information return may be made by separate statement showing the amount of dividends, nontaxable distributions and Pennsylvania exempt-interest dividends paid or containing sufficient information to enable distributees to compute the amount of taxable dividend distributions and any adjustment to basis or taxable gain for the taxable year.
* * * * *
[Pa.B. Doc. No. 97-677. Filed for public inspection May 2, 1997, 9:00 a.m.]
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