RULES AND REGULATIONS
Title 61—REVENUE
DEPARTMENT OF REVENUE
TREASURY DEPARTMENT
[61 PA. CODE CH. 5]
Payments by Electronic Funds Transfer
[44 Pa.B. 1432]
[Saturday, March 15, 2014]The Department of Revenue (Department) and the Treasury Department (Treasury), under the authority of section 9 of The Fiscal Code (72 P. S. § 9), amend Chapter 5 (relating to payments by electronic funds transfer) to read as set forth in Annex A.
The act of July 18, 2013 (P. L. 574, No. 71) (Act 71) mandates the Secretary of Revenue and the State Treasurer to jointly promulgate a regulation revising electronic funds transfer (EFT) payments for payments equal to or greater than $1,000. Accordingly, the Department and the Treasury, under section 204 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. § 1204), known as the Commonwealth Documents Law (CDL), and the regulation thereunder, 1 Pa. Code § 7.4, find that notice of proposed rulemaking is under the circumstances impracticable and, therefore, may be omitted.
Act 71 mandated these changes as part of the Fiscal Year (FY) 2013-2014 budget package. A balanced operating budget for the Commonwealth is required under Pa.Const. Art. VIII, § 12. The only way to timely implement this change, a necessary component of the FY 2013-2014 budget, is through a final-omitted rulemaking. These savings form part of the FY 2013-2014 budget passed by the General Assembly. Failure to timely adopt the regulations will create a deficit in the current year's budget as enacted.
Utilizing the shorter regulatory process enables the Department and the Treasury to quickly amend the regulations and provide the public with the revised EFT requirement enacted under Act 71. Even though time constraints make the formal comment period impossible, the Department reached out to the tax community to give them the opportunity to provide informal comments through the public outreach process. A copy of the draft regulation was sent to the Pennsylvania Bar Association, the Philadelphia Bar Association, the Pennsylvania Institute of Certified Public Accountants, the Pennsylvania Society of Public Accountants and the Pennsylvania Chamber of Business and Industry with a 14-day comment period. The draft regulation was also delivered to the Chairpersons of the Appropriations and Finance legislative committees. Comments or objections were not received on the EFT threshold revision. The regulation is listed on the Department's Quarterly Regulatory Report posted on the Department's web site. The Department continues to inform taxpayers of the lower EFT requirement through many avenues, such as the Revenue Tax Update publication, notification in the electronic E-TIDES system and on the Department's web site.
As a result, the Department for good cause finds that the procedures specified in sections 201 and 202 of the CDL (45 P. S. §§ 1201 and 1202) are in these circumstances impractical, unnecessary or impose an impossible burden on the Department.
Purpose of the Final-Omitted Rulemaking
The purpose of this final-omitted rulemaking is to implement regulations to reflect a statutory change made by the General Assembly that revised payments required under § 5.3 (relating to payments required to be paid by EFT) from ''$10,000 or more'' to ''$1,000 or more.'' Electronic payments offer several advantages over check payments. Payments are received faster and errors in handling and posting of tax payments are reduced.
Explanation of Regulatory Requirements
The Department is amending § 5.3 to add language in subsection (e) that explains the lower EFT threshold requirement of $1,000 beginning January 1, 2014. The remaining subsections are renumbered.
Section 5.7(i) (relating to miscellaneous provisions) is amended to reflect a new amount of ''$1,000 or more,'' as well as update a reference to the renumbered section.
Fiscal Impact
The Department estimated that the regulations will have a fiscal impact of $39,000 savings to the Commonwealth. It can be expected that the costs to the regulated community and small businesses, after an initial setup expense of staff time or other resources if the business is not already set up to make EFT payments, are minimal. Added expense to convert to electronic payments should be offset by savings on checks, stamps and envelopes.
Paperwork
This final-omitted rulemaking will not generate substantial paperwork for the public or the Commonwealth.
Effectiveness/Sunset Date
This final-omitted rulemaking will become effective upon publication in the Pennsylvania Bulletin. The regulations are scheduled for review within 5 years of publication. A sunset date has not been assigned.
Contact Person
The contact person for an explanation of the final-omitted rulemaking is Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, P. O. Box 281061, Harrisburg, PA 17128-1061.
Regulatory Review
Under section 5.1(c) of the Regulatory Review Act (71 P. S. § 745.5a(c)), on December 20, 2013, the Department and Treasury submitted a copy of the final-omitted rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Finance and the Senate Committee on Finance. On the same date, the regulations were submitted to the Office of Attorney General for review and approval under the Commonwealth Attorneys Act (71 P. S. §§ 732-101—732-506).
Under section 5.1(j.2) of the Regulatory Review Act, on February 26, 2014, the final-omitted rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on February 27, 2014, and approved the final-omitted rulemaking.
Findings
The Department and the Treasury find that:
(1) The proposed rulemaking procedures in sections 201 and 202 of the CDL are unnecessary because it is in the public interest to expedite final-omitted rulemaking.
(2) The adoption of this final-omitted rulemaking in the manner provided by this order is necessary and appropriate for the administration and enforcement of the authorizing statute.
Order
The Department and the Treasury, acting under the authorizing statute, order that:
(a) The regulations of the Department, 61 Pa. Code Chapter 5, are amended by amending §§ 5.3 and 5.7 to read as set forth in Annex A.
(b) The Secretary of the Department and the State Treasurer shall submit this order and Annex A to the Office of General Counsel and Office of Attorney General for approval as to form and legality as required by law.
(c) The Secretary of the Department and the State Treasurer 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.
DANIEL MEUSER,
Secretary of RevenueROBERT M. McCORD,
State Treasurer(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 44 Pa.B. 1534 (March 15, 2014).)
Fiscal Note: 15-458. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 61. REVENUE
PART I. DEPARTMENT OF REVENUE
Subpart A. GENERAL PROVISIONS
CHAPTER 5. PAYMENTS BY ELECTRONIC FUNDS TRANSFER § 5.3. Payments required to be paid by EFT.
(a) Beginning July 1, 1992, a payment in the amount of $40,000 or more shall be remitted using a method of EFT selected by the taxpayer. A taxpayer may choose the ACH debit method or the ACH credit method.
(b) Beginning January 1, 1993, a payment in the amount of $30,000 or more shall be remitted using a method of EFT selected by the taxpayer. A taxpayer may choose the ACH debit method or the ACH credit method.
(c) Beginning January 1, 1994, a payment in the amount of $20,000 or more shall be remitted using a method of EFT selected by the taxpayer. The taxpayer may choose the ACH debit method or the ACH credit method.
(d) Beginning January 1, 2013, a payment in the amount of $10,000 or more shall be remitted using a method of EFT selected by the taxpayer. The taxpayer may choose the ACH debit method or the ACH credit method.
(e) Beginning January 1, 2014, a payment in the amount of $1,000 or more shall be remitted using a method of EFT selected by the taxpayer. The taxpayer may choose the ACH debit method or the ACH credit method.
(f) This requirement applies to payment of only the following taxes:
Sales and Use Corporate Net Income Employer Withholding Capital Stock-Franchise Liquid Fuels Bank Shares Fuel Use Title Insurance and Trust Mutual Thrift Institutions Company Shares Oil Company Franchise Insurance Premiums Malt Beverage Public Utility Realty Motor Carrier Road Tax Gross Receipts (g) A taxpayer may satisfy the obligation to remit a payment by EFT by delivering a certified or cashier's check, in person or by courier with the appropriate return or deposit statement, to the Pennsylvania Department of Revenue, Bureau of Business Trust Fund Taxes, EFT Unit, Ninth Floor, Strawberry Square, Fourth and Walnut Streets, Harrisburg, Pennsylvania 17128 on or before the due date of the obligation. Payments will not be accepted at other Department locations.
(h) Separate transfers shall be made for each payment.
§ 5.7. Miscellaneous provisions.
(a) A taxpayer who is required to remit payments by EFT shall initiate the transfer so that the tax due is deposited to the Commonwealth's depository account on or before the day that the tax is due. If a tax due date falls on a day other than a business day, the deposit by EFT is due on the first business day thereafter.
(b) The EFT method of payment does not change current filing requirements for tax returns. If the EFT payment is not timely made or the tax return required is not filed by the due date, the provisions for late filing penalties, interest and loss of collection allowance apply as provided by law.
(c) A taxpayer who is required to remit payments by EFT and who is unable to make a timely payment because of system failures within the banking system/ACH interface which are beyond the taxpayer's control will not be subject to penalty or interest for late payment or loss of collection allowance.
(d) Errors made by the Treasury, the Department or their agents will not subject the taxpayer to loss of collection allowance or assessment of penalty or interest for late payment.
(e) A taxpayer who is required to remit payment by EFT and who elects to remit the payment by courier as described in § 5.6(d) (relating to EFT payments) will not be subject to penalty or interest for late payment or loss of collection allowance if the courier fails to make timely delivery due to a force majeure.
(f) For the first 6 months that a taxpayer is required to remit tax by EFT, the Department will extend a reasonable grace period to the taxpayer to resolve problems which arise with new administrative procedures, data systems changes and taxpayer operating procedures. To qualify for a grace period, the taxpayer shall demonstrate that a good faith effort to comply was made, or that circumstances beyond the taxpayer's reasonable control prevented compliance by the required date.
(g) A taxpayer who remits taxes by EFT shall indicate that fact on the return when it is filed. For the purpose of this chapter, ''return'' means the form designated for filing the report of taxes due for a period, including forms for making installments of estimated tax and tentative tax returns.
(h) The Department and the Treasurer will provide one or more methods for taxpayers who remit taxes by EFT to verify and acknowledge that the payments have been received by the Department.
(i) The Treasurer, the Department and the Secretary of the Budget will provide one or more methods for tax refunds of $1,000 or more. The refunds will be available for the taxes listed in § 5.3(f) (relating to payments required to be paid by EFT). The taxpayer shall file a written request for the electronic transfer of a refund.
[Pa.B. Doc. No. 14-515. Filed for public inspection March 14, 2014, 9:00 a.m.]
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