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PA Bulletin, Doc. No. 98-1875

RULES AND REGULATIONS

Title 61--REVENUE

DEPARTMENT OF REVENUE

[61 PA. CODE CH. 117]

Return of Information as to Payment in Excess of $10

[28 Pa.B. 5669]

   The Department of Revenue (Department), under the authority contained in section 354 of the Tax Reform Code of 1971 (TRC) (72 P. S. § 7354), by this order amends § 117.18 (relating to return of information as to payment in excess of $10).

Purpose of Amendment

   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 is amending § 117.18.

Explanation of Regulatory Requirements

   This 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 amendment.

Comment and Response Summary

   Notice of proposed rulemaking was published at 27 Pa.B. 2125 (May 3, 1997). This amendment is being adopted with no changes to the proposed rulemaking.

   The Department did not receive any comments during the public comment period. No comments were received from the House or Senate Finance Committee. No comments were received from the Independent Regulatory Review Commission (IRRC).

Fiscal Impact

   The Department has determined that the amendment will have no fiscal impact on the Commonwealth.

Paperwork

   The amendment will not generate additional paperwork for the public or the Commonwealth.

Effectiveness/Sunset Date

   The amendment will become effective upon final publication in the Pennsylvania Bulletin. The amendment is scheduled for review within 5 years of final publication. No sunset date has been assigned.

Contact Person

   The contact person for an explanation of the final-form regulation is Anita M. Doucette, Office of Chief Counsel, Department of Revenue, Dept. 281061, Harrisburg, PA 17128-1061.

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 the notice of proposed rulemaking, published at 27 Pa.B. 2125, to IRRC and the Chairpersons of the House and Senate Committees on Finance for review and comment. In compliance with section 5(c) of the Regulatory Review Act, the Department also provided IRRC and the Committees with copies of all comments received, as well as other documentation.

   In preparing this final-form regulation, the Department has considered all comments received from IRRC, the Committees and the public.

   This final-form regulation was deemed approved by the House and Senate Committees on September 23, 1998. IRRC met on September 24, 1998, and approved the final-form regulation in accordance with section 5.1(e) of the Regulatory Review Act (71 P. S. § 745.5a(e)).

Findings

   The Department finds that:

   (1)  Public notice of intention to adopt the regulation has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.

   (2)  The regulation is necessary and appropriate for the administration and enforcement of the authorizing statute.

Order

   The Department acting under the authorizing statute, orders that:

   (a)  The regulations of the Department, 61 Pa. Code Chapter 117, are amended by amending § 117.18 to read as set forth in Annex A with ellipses referring to the existing text of the regulation.

   (b)  The Secretary of the Department shall submit this order and Annex A to the Office of General Counsel and the Office of Attorney General for approval as to form and legality as required by law.

   (c)  The Secretary of the Department shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.

   (d)  This order shall take effect upon publication in the Pennsylvania Bulletin.

ROBERT A. JUDGE, Sr.   
Secretary

   (Editor's Note:  For the text of the order of the Independent Regulatory Review Commission relating to this document, see 28 Pa.B. 5189 (October 10, 1998).)

   Fiscal 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.

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   (c)  Pennsylvania information return. The Pennsylvania information return shall be made in one of the following ways:

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   (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 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, if 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.

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[Pa.B. Doc. No. 98-1875. Filed for public inspection November 13, 1998, 9:00 a.m.]


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