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(1) If any tax authorized or imposed under this Title is not paid when due, prior to July 1, 1987, there shall be added to the amount of the unpaid tax and collected therewith, interest at the rate of one-half of one percent (0.5%) of the amount of the unpaid tax, and a penalty at the rate of one percent (1%) of the amount of the unpaid tax shall be added for each month or fraction thereof during which said tax shall remain unpaid and shall be collected, together with the amount of the tax. This provision shall not apply to: 91
(b) Taxes imposed by subsection 19-1502(1)(a) or (b) that are not, in fact, withheld pursuant to Section 19-1504; provided, however, when such tax is not paid when due interest at the rate of one-half of one percent (0.5%) of the amount of the unpaid tax and a penalty of one percent (1%) of the amount of the unpaid tax per month for the first year and one-half of one percent (0.5%) per month thereafter shall be added and collected together with the amount of the tax; and
(c) General Business Taxes authorized under Section 19-1803.
(2) Commencing on July 1, 1987 and terminating on December 31, 2013, if any tax authorized or imposed under this Title was not paid when due or is not paid when it becomes due, there shall be added to the amount of the unpaid tax, interest, and penalty and collected therewith: 92
(a) interest at the rate of one percent (1%) of the amount of the unpaid tax each month or fraction thereof during which the tax remains unpaid; and 93
(b) penalty calculated on the amount of the unpaid tax at the following rates for each month during which the tax remains unpaid:
(.1) in the first month or fraction thereof following the due date, one percent (1%);
(.2) in the second month or fraction thereof following the due date, an additional one percent (1%) for a total of two percent (2%);
(.3) in the third month or fraction thereof following the due date, an additional one percent (1%) for a total of three percent (3%);
(.4) in the fourth month or fraction thereof following the due date, an additional two percent (2%) for a total of five percent (5%);
(.5) in the fifth month or fraction thereof following the due date, an additional two percent (2%) for a total of seven percent (7%);
(.6) in the sixth month or fraction thereof following the due date, an additional two percent (2%) for a total of nine percent (9%);
(.7) in the seventh month or fraction thereof following the due date, an additional three percent (3%) for a total of twelve percent (12%);
(.8) in the eighth month or fraction thereof following the due date, an additional three percent (3%) for a total of fifteen percent (15%);
(.9) in the ninth month or fraction thereof following the due date, an additional three percent (3%) for a total of eighteen percent (18%);
(.10) in the tenth month or fraction thereof following the due date, an additional four percent (4%) for a total of twenty-two percent (22%);
(.11) in the eleventh month or fraction thereof following the due date, an additional four percent (4%) for a total of twenty-six percent (26%);
(.12) in the twelfth month or fraction thereof following the due date, an additional four percent (4%) for a total of thirty percent (30%);
(.13) thereafter, for each additional month or fraction thereof following the due date, one and one- quarter percent (1.25%) shall be added to the amount charged under subsection (.12).
(3) Commencing on January 1, 2014, if any tax authorized or imposed under this Title, other than real estate taxes, was not paid when due or is not paid when it becomes due, there shall be added to the amount of the unpaid tax and collected therewith, interest and penalty, as follows: 94
(a) All taxes shall bear simple interest from the date they become due and payable until paid. The interest rate per annum during each calendar year shall be the sum of (i) the Federal Short-Term Rate established by the Secretary of the Treasury of the United States under the provisions of the Internal Revenue Code of 1954, 26 U.S.C. §§ 6621 et seq., effective January 1 of such calendar year without regard to any change or changes in said Federal interest rate during such calendar year, plus (ii) five (5) percentage points. The Revenue Commissioner shall publish the rate of interest for each calendar year on the Department website.
(b) All taxes shall bear a penalty at the rate of one and one-quarter percent (1.25%) of the amount of the unpaid tax for each month or fraction thereof during which the tax remains unpaid.
(4) Where suit is brought for the recovery of any such tax the person liable therefor shall, in addition, be liable for the costs of collection together with the interest and penalties herein imposed. 95
(5) In addition to any other sanction or remedial procedure provided, any person who shall: 96
(a) make any false or untrue statement on his or her report or return; 97
(b) fail or refuse to file any report or return;
(c) violate any condition of any license required hereunder;
(d) fail to pay over to the Department any monies which he or she may hold as agent for the City or School District of Philadelphia; 98
(e) violate any provision of this Title or any regulation adopted hereunder: shall be subject to a fine of not more than three hundred dollars ($300) for each offense. A separate offense shall be deemed to occur on the first day of each month that conduct described in subsections (5)(b) and (5)(d) continues. 99
(6) Any person who shall have paid, or from whom there is due or alleged to be due any moneys collectible by the Department, including any taxes, rents, charges, or other sums, and who fails and refuses to produce or permit the examination of his books, records, accounts, and related data, or to afford to authorized representatives of the Department an opportunity for such examination, shall be subject to a fine of not more than three hundred dollars ($300) for each such offense. 100
(7) When any person shall give or cause to be given to a City official or agency a check in payment of any obligation whether due to the City or others, including but not limited to any tax, water, sewer rent, or support order which is dishonored or unpaid by the bank upon which it is drawn, the sum of twenty dollars ($20) shall be added to the obligation and interest and penalties provided by the Code, or otherwise, to cover the additional cost to the City. 101
Notes
| 90 | Source: In general, the following provisions are based on the penalty provisions formerly included under each separate City tax. These provisions generalize the penalty provisions so as to make a uniform application thereof to all taxes levied by the City. Amended, 1962 Ordinances, p. 1216; amended, 1979 Ordinances, p. 1968; amended, 1980 Ordinances, p. 12; amended, 1984 Ordinances, p. 614 (made effective as of January 1, 1986 by Bill No. 566); amended, 1985 Ordinances, p. 554; amended, 1985 Ordinances, p. 1344; amended, Bill No. 758 (approved July 24, 1995), 1995 Ordinances, p. 1081; amended, Bill No. 970155 (approved April 3, 1997). |
| 91 | Amended, 1980 Ordinances, p. 12; amended, 1987 Ordinances, p. 27. |
| 92 | Added, 1987 Ordinances, p. 27; amended, Bill No. 120822 (approved April 17, 2013), effective January 1, 2014. |
| 93 | Amended, Bill No. 970155 (approved April 3, 1997). Section 2 of the Ordinance provides: "Effective Date. This Ordinance shall take effect July 1, 1997, and the increase in interest rates provided by this Ordinance shall begin to apply as that date." |
| 94 | Added, Bill No. 120822 (approved April 17, 2013), effective January 1, 2014. |
| 95 | Renumbered, 1987 Ordinances, p. 27; renumbered, Bill No. 120822 (approved April 17, 2013), effective January 1, 2014. |
| 96 | Renumbered and amended, 1987 Ordinances, p. 27; renumbered, Bill No. 120822 (approved April 17, 2013), effective January 1, 2014. |
| 97 | Amended, Bill No. 1133 (approved July 24, 1995), 1995 Ordinances, p. 1225. |
| 98 | Amended, 1980 Ordinances, p. 12; amended, Bill No. 1133 (approved July 24, 1995). |
| 99 | Amended, Bill No. 758 (approved July 24, 1995), 1995 Ordinances, p. 1081; amended, Bill No. 1133 (approved July 24, 1995), 1995 Ordinances, p. 1225. References to subsections (4)(b) and (4)(d) changed to subsections (5)(b) and (5)(d) by Code editor because subsections were renumbered by Bill No. 120822 (approved April 17, 2013), effective January 1, 2014. |
| 100 | Renumbered, 1987 Ordinances, p. 27; amended, Bill No. 758 (approved July 24, 1995), 1995 Ordinances, p. 1081; amended, Bill No. 1133 (approved July 24, 1995), 1995 Ordinances, p. 1225; renumbered, Bill No. 120822 (approved April 17, 2013), effective January 1, 2014. |
| 101 | Source: 1939 Ordinances, p. 280; amended, 1958 Ordinances, p. 1176; amended, 1983 Ordinances, p. 1146; renumbered, 1987 Ordinances, p. 27; renumbered, Bill No. 120822 (approved April 17, 2013), effective January 1, 2014. |
(1) Subject to the limitations on assessment in Section 19-510.1, any suit to recover any tax authorized or imposed by this Title, other than real estate taxes, and personal property taxes not imposed under Section 19-1102, shall be begun within 6 years after such tax is due or within 6 years after a return or a report has been filed, whichever date is later, but this limitation shall not apply in the following cases: 103
(a) where the taxpayer has failed to file the return or report required under the provisions of this Title;
(b) where an examination of a return or report filed by the taxpayer and of other evidence relating to such return or report in the possession of the Revenue Commissioner reveals a fraudulent evasion of taxes or a substantial understatement of gross income, net profits, gross receipts, or any other receipt of income, moneys or funds in any such return or report, except with respect to any understatement the position for which was adequately disclosed, as provided by subsection (2)(b) of Section 19-510.1; 104
(c) where the taxpayer has collected or withheld tax funds or moneys of any nature or description under this Title as agent of or trustee for the City or the School District of Philadelphia, and has failed, neglected or refused to pay the amount so collected or so withheld to the City or the School District of Philadelphia.
(2) All defenses to the collection of any tax authorized or imposed by this Title shall be raised by appropriate petition pursuant to Chapter 19-1700. 105
(3) Where a taxpayer has filed any petition pursuant to Chapter 19-1700, the period of limitation set forth in subsection 19-510(1) 106 shall be tolled until final determination of such petition has been made.
Notes
| 102 | Source: 1952 Ordinances; made applicable to all City taxes; renumbered, 1979 Ordinances, p. 1967; caption amended, Bill No. 040021 (approved June 10, 2004). |
| 103 | |
| 104 | |
| 105 | Amended, 1980 Ordinances, p. 16. |
| 106 | Enrolled bill read 19-509(1); cross-reference revised by Code editor to reflect renumbering of Section at 1979 Ordinances, p. 1967. |
(1) The amount of any tax authorized or imposed by this Title, other than real estate taxes, and personal property taxes not imposed under Section 19-1102, shall be assessed within three (3) years after a return or a report was due or has been filed, whichever date is later, but this limitation shall not apply in the following cases: 108
(a) where the taxpayer has failed to file the return or report required under the provisions of this Title;
(b) where an examination of a return or report filed by the taxpayer and of other evidence relating to such return or report in the possession of the Revenue Commissioner reveals a fraudulent evasion of taxes;
(c) a substantial understatement of gross income, net profits, gross receipts, or any other receipt of income, moneys or funds in any such return or report, in which case the assessment must be made within six (6) years, unless the adequate disclosure requirements of subsection (2)(b) are satisfied, in which case the assessment must be made within three (3) years;
(d) where the taxpayer has collected or withheld tax funds or moneys of any nature or description under this Title as agent of or trustee for the City or the School District of Philadelphia, and has failed, neglected or refused to pay the amount so collected or so withheld to the City or the School District of Philadelphia;
(e) where the taxpayer and the Revenue Commissioner, prior to the expiration of time prescribed for the assessment of any tax, agree in writing to extend the limitation period for assessment for the period of time agreed upon by the taxpayer and the Revenue Commissioner. The extension shall become effective when the agreement has been executed by both parties. The period of extension agreed upon may be extended by subsequent agreements in writing executed by both parties prior to the expiration of the previously agreed upon extension period.
(2) Substantial Understatement. For purposes of this Section, a substantial understatement exists where the understatement in tax for the year exceeds twenty percent (20%) of the tax required to be shown on the return; provided however, that the prescribed limitations period shall apply if the taxpayer made adequate disclosure of its position with respect to the source of the underpayment.
(a) Exception for Adequate Disclosure. The period allotted for assessment of tax on returns that reflect a substantial understatement shall be 3 years if:
(.1) the understatement is attributable to a position contrary to an ordinance or a ruling or regulation published by the Revenue Commissioner and the position is disclosed in accordance with the rules of this Section; and
(.2) where the understatement is attributable to a position contrary to a regulation, the position represents a good faith challenge to the validity of the regulation.
(b) Disclosure is adequate for purposes of this Section if the ordinance, regulation, or ruling in question is adequately identified and described on the applicable tax form to which tax the position is being undertaken. The Department may promulgate regulations setting forth requirements for adequate disclosure, consistent with this ordinance.
(c) This disclosure exception does not apply, however, in the case of a position that does not have a reasonable basis or where the taxpayer fails to keep adequate books and records or to substantiate items properly.
Notes
| 107 | |
| 108 | Amended, Bill No. 120822 (approved April 17, 2013). |
(1) The Department may prescribe by regulation the terms and conditions under which returns are to be filed by the taxpayer electronically, and under which payments are to be made to the City by electronic funds transfer (EFT), including requirements for mandatory electronic filing, or payment by EFT, where appropriate in light of the size or frequency of the liability or payment. EFT includes automated clearinghouse debits, automated clearinghouse credits, and any other means that may be available to obtain funds due the City in the most expeditious manner.
(2) A taxpayer who fails to comply with a mandatory electronic filing requirement shall, in addition to any penalties owing under subsection 19-509(4)(e), be subject to a penalty of five hundred dollars ($500).
(3) A taxpayer who fails to comply with a mandatory electronic payment requirement shall, in addition to any interest, penalties and fees owing under Section 19-509, be subject to a penalty, as follows:
(a) If the amount to be paid electronically does not exceed ten thousand dollars ($10,000): five percent (5%) of the amount to be paid electronically.
(b) If the amount to be paid electronically is more than ten thousand dollars ($10,000), but less than fifty thousand dollars ($50,000): five hundred dollars ($500).
(c) If the amount to be paid electronically is fifty thousand dollars ($50,000) or more: one percent (1%) of the amount to be paid electronically.
Notes
| 109 |
(1) Each tax authorized or imposed under this Title upon any person, transaction, occupation, privilege, subject or personal property shall be in addition to any other taxes imposed by the City or the School District of Philadelphia upon such person, transaction, occupation, privilege, subject or personal property. 111
(2) The provisions of this Title, to the extent they are the same as those of existing ordinances, shall be construed as a continuation of such ordinances and not as new enactments.
(3) Nothing contained in this Title shall be construed to empower the City or the School District of Philadelphia to levy or collect any tax not within the taxing power of the City or the School District of Philadelphia under the Constitution or laws of this Commonwealth. 112
Notes
| 110 | Amended, 1979 Ordinances, p. 1968; renumbered, Bill No. 100224 (approved June 30, 2010). |
| 111 | Amended, 1980 Ordinances, p. 12. |
| 112 | Amended, 1980 Ordinances, p. 12. |
(1) The Commissioner of Revenue is hereby charged with the enforcement of the provisions of this Title and is hereby authorized to promulgate regulations governing the administration, enforcement and interpretation of the provisions of this Title.
Notes
| 113 | Added, 1980 Ordinances, p. 12; renumbered, Bill No. 100224 (approved June 30, 2010). |
(1) The Department shall, during Fiscal Year 2010, administer a tax amnesty program ("Program") which, as further detailed in this Section, will provide certain delinquent taxpayers the opportunity to satisfy their tax delinquencies through the filing of any delinquent returns and the payment of the principal amount of taxes due plus fifty percent (50%) of accrued interest, with waiver of accrued penalties, certain fines, and fifty percent (50%) of accrued interest.
(2) The Revenue Commissioner shall promulgate rules and regulations to implement the Program, consistent with the following:
(a) The Program shall be available for a period (the "Amnesty Period") of at least forty-five (45) days and no more than sixty (60) days beginning and ending on dates announced by the Revenue Commissioner.
(b) The Program shall apply to any of the following taxes imposed or collected by the City of Philadelphia or the School District of Philadelphia originally due and payable on or after February 1, 1986, and on or before June 30, 2009 ("Eligible Tax"), provided that no interest or penalties shall be waived with respect to taxes imposed or collected by the School District of Philadelphia unless the School Reform Commission has by resolution, adopted no later than forty-five (45) days prior to the commencement of the Amnesty Period, agreed to participate in the Program.
(.1) Amusement tax, pursuant to Chapter 19-600.
(.2) Auctioneer tax, pursuant to Chapter 19-700 (repealed).
(.3) Bowling alley tax, pursuant to Chapter 19-800 (repealed).
(.4) Mechanical amusement device tax, pursuant to Chapter 19-900.
(.5) Personal property tax, pursuant to Chapter 19-1100.
(.6) Parking tax, pursuant to Chapter 19-1200.
(.7) Real estate tax, pursuant to Chapter 19-1300, Chapter 19-1800 and applicable State law.
(.8) Realty transfer tax, pursuant to Chapter 19-1400.
(.9) Wage and net profits tax, pursuant to Chapter 19-1500 and Chapter 19-2800.
(.10) Net income tax, pursuant to Chapter 19-1800.
(.11) Realty use and occupancy tax, pursuant to Chapter 19-1800.
(.12) Liquor sales tax, pursuant to Chapter 19-1800.
(.13) Hotel room rental tax, Tourism and marketing tax, and Hospitality promotion tax, pursuant to Chapter 19-2400.
(.15) Vending machine tax, pursuant to Chapter 19-2800 (repealed).
(.16) Vehicle rental tax, pursuant to Chapter 19-3300.
(.17) Excise tax on outdoor advertising transactions, pursuant to Chapter 19-3400.
(c) The Program shall be available to any taxpayer who is delinquent in payment of an Eligible Tax as of the first day of the Amnesty Period, except that the Program shall not be available to a taxpayer who: (i) received notice that the taxpayer is the subject of a criminal investigation for an alleged violation of any law imposing an Eligible Tax; or (ii) has been named as a defendant in a criminal complaint alleging a violation of any law imposing an Eligible Tax; or (iii) participated in any prior tax amnesty program of the City or was an officer of a company that participated in any such prior program, including, but not limited to, the tax amnesty authorized by Bill No. 1026 (approved October 22, 1986). For purposes of this Section, a taxpayer is "delinquent" with respect to payment of a tax or the filing of a return if the due date has passed and the taxpayer has not paid the tax in full or filed the return, as applicable.
(d) No abatement shall be available under the Program for interest or penalty paid prior to the start of the Amnesty Period. Taxpayers who have entered into a payment agreement regarding delinquent taxes shall be eligible for the Program with respect to such taxes so long as:
(.1) All payments due under the payment agreement between July 1, 2009 and the start of the Amnesty Period are current.
(.2) The payment agreement does not reflect any abatement of principal in settlement of litigation.
(e) In the event that, on or after the Closing Date, the City has secured a judgment for delinquent taxes against the taxpayer, or a court decree or writ in aid of execution on a judgment for delinquent taxes, then such taxes shall be ineligible for abatement of interest or penalties under the Program. The Revenue Department, by regulation, shall establish the Closing Date to maximize the City's anticipated overall collections, except that the Closing Date shall not be prior to December 31, 2008.
(f) Taxpayers wishing to participate in the Program must file an application in such form and containing such information as the Department shall require.
(g) The Department shall execute an agreement with a participating taxpayer that:
(.1) Sets forth the agreed amount of the tax delinquency and the payment due;
(.2) Sets forth the taxpayer's obligation during the Amnesty Period to make payment of all delinquent taxes plus fifty percent (50%) of accrued interest, provided that for purposes of this subsection, the "addition to tax" equal to fifteen percent (15%) of the tax due, imposed pursuant to subsection 19-1303(4)(a), including any addition added on January 1, 2010; and the "addition" equal to ten and one-half percent (10.5%) provided for by subsection 19-1101(1), (2); shall be considered part of the tax principal delinquency and shall not be treated as accrued interest; 116
(.3) Provides that upon making all required payments during the Amnesty Period, the taxpayer shall be relieved of liability for the remaining fifty percent (50%) of accrued interest and one hundred percent (100%) of accrued penalties, as well as any fine under subsection 19-509(4)(b) (relating to non-filing) or subsection 19-509(4)(d) (relating to non-payment of moneys held as agent); provided that the Department may reassess and collect from the taxpayer such fifty percent (50%) of accrued interest due and one hundred percent (100%) of the accrued penalties previously imposed, and any fines forgiven, if, within three years after the end of the Amnesty Period, either:
(.a) The taxpayer becomes six or more months late in paying, or filing any return relating to, any tax under this Title 19;
(.b) The Department notifies the taxpayer that the taxpayer substantially understated his or her principal liability as to taxes for which interest and penalty were abated under the Program; or
(.c) The Department determines that the taxpayer has violated any provision of the agreement.
(.4) Provides that the three year period set forth in subsection (2)(g)(.3) above and the six month period set forth in subsection (2)(g)(.3)(.a) above shall each be tolled by the pendency of a timely filed, good faith, administrative or judicial appeal by the taxpayer relating to any tax subject to subsection (2)(g)(.3)(.a).
(.5) Provides that the taxpayer shall not seek, and the Tax Review Board shall not grant, any further abatement of interest or penalties with respect to any tax for which interest or penalties were abated pursuant to this Section; and that any refunds otherwise owing to the taxpayer and paid within 180 days of the expiration of the Amnesty Period shall not carry interest.
(.6) Contains a certification by the taxpayer disclosing all taxes with respect to which the taxpayer is delinquent with respect to payment or returns; and a certification by the taxpayer that he or she has filed, or is now filing contemporaneous with the agreement, complete and accurate returns with respect to all such taxes and that, with respect to any delinquent payments, he or she either is making payment pursuant to the Program or does not have the financial ability to make certain payments at that time. The Department, at its discretion, may allow participation in the Program with respect to less than all disclosed taxes, where the Department is satisfied that the taxpayer does not have the financial ability to pay all such taxes.
(.7) Contains a certification by the taxpayer that he or she has not previously participated, and was not an officer of any taxpayer that previously participated, in any prior City tax amnesty program.
(.8) Contains such other provisions as the City Solicitor may deem necessary or appropriate to protect the interests of the City.
(h) No refund or credit shall be allowed for any interest, addition to tax, or penalty the taxpayer paid before the Amnesty Period.
(i) No future amnesty program, if any, shall permit abatement of interest or penalty with respect to any taxes first due on or before June 30, 2009.
(3) Outreach and Publicity; Reports.
(a) The Department shall extensively publicize the Amnesty Program. Such publicity may include, but need not be limited to, written notice of the Program to all taxpayers known to be delinquent with respect to any tax subject to the Program; media advertising; and the development and maintenance of a website.
(b) Within one hundred eighty (180) days after the end of the Amnesty Period, the Department shall issue a written final report on the implementation of the Program, setting forth:
(.1) A detailed breakdown of the Department's administrative costs in implementing the Program;
(.2) The number of tax amnesty returns filed and a breakdown of the number and dollar amount of revenue obtained for each tax by tax year;
(.3) The total dollar amount of revenue collected by the Program;
(.4) The total number of taxpayers that participated in the program, and, to the extent practicable without violating taxpayer confidentiality, their aggregate demographic characteristics, including type of taxpayer (individual, partnership, corporation or other entity), North American Industry Classification System codes of participants, size of tax liability, and geographical location by zip code; and
(.5) The total dollar amount of fines, penalties and interest forgiven under the Program.
Notes
| 114 | |
| 115 | Amended, Bill No. 110758 (approved December 21, 2011), effective May 1, 2012. |
| 116 | Amended, Bill No. 100184 (approved April 28, 2010). |
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