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(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
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(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). |
(1) Definitions. The following definitions shall apply to this Section:
(a) Final Determination means an adjustment to a taxpayer's federal taxable income from an initial filing that has been resolved through any of the following circumstances:
(.1) The taxpayer has final income tax liability resulting from a federal audit including any requisite review by the U.S. Department of Justice or congressional Joint Committee on Taxation and has not timely filed a petition for redetermination or claim for refund for any portion of the audit.
(.2) The taxpayer has signed all Internal Revenue Service (IRS) Forms 870, closing agreement(s), or other IRS forms(s) for the tax period, consenting to the deficiency or consenting to any over-assessment that is final for all issues and no longer subject to appeal.
(.3) A decision of the United States Tax Court, a United States District Court or Court of Appeals, the United States Court of Claims or the United States Supreme Court has become final.
(b) Report of Change means such form or other documentation as may be established by the Department by regulation used by a taxpayer in order to report additional Philadelphia tax due, request a claim for refund or credit of Philadelphia tax paid, or make other adjustments to Philadelphia tax reports as a result of a Final Determination.
(2) Whenever a Final Determination is made of a taxpayer's federal taxable income for any tax year, the taxpayer shall timely file a Report of Change with the Department.
(3) Required Filing. The Department may require by regulation the submission of such documentation as is reasonably necessary to inform the Department of adjustments to the taxpayer's federal taxable income resulting from a Final Determination and the impact of such adjustments on the taxpayer's Philadelphia tax liability.
(4) Filing Deadline. A Report of Change shall be filed with the Department within 180 days following a Final Determination. Failure to timely file a Report of Change shall result in such additions as may be established by regulation.
(5) Upon receipt of a Report of Change, the Department shall determine whether the Final Determination: (a) requires an assessment of additional Philadelphia tax, interest, and penalties owed; (b) qualifies the taxpayer for a refund or credit of excess Philadelphia taxes paid; or (c) results in other changes to the taxpayer's Philadelphia tax liability.
(6) The Department shall issue any assessment of additional Philadelphia tax, interest, and penalties arising directly from adjustments to a taxpayer's federal taxable income within the later of:
(a) The expiration of the limitations period specified for the relevant tax in section 19-510.1;
(b) The expiration of the one (1) year period following the date of filing of the Report of Change; or
(c) If the taxpayer fails to timely file a Report of Change, the expiration of the one (1) year period following the date on which the Internal Revenue Service, Pennsylvania, another state, or an organization representing and/or conducting audits for the states' tax agencies, notifies the Department, in writing, that a Final Determination has been made with respect to the taxpayer's federal taxable income for a specified tax year.
(7) If a Report of Change is filed for a tax year for which the applicable statute of limitations has expired, any adjustments to the taxpayer's Philadelphia tax liability shall be limited to changes arising directly from the federal adjustments in the Report of Change. Any further adjustments to the taxpayer's Philadelphia tax liability require written agreement of the taxpayer and the Department.
(8) Should a timely filed Report of Change result in overpayment of tax, the taxpayer may apply for a refund or use the overpayment as a credit against its future tax liabilities.
(9) If a Report of Change is timely filed, pursuant to paragraph (4) hereof, for a tax year for which the applicable refund or credit statute of limitations has expired, any adjustments reducing the taxpayer's Philadelphia tax liability shall be limited to changes arising directly from a Final Determination reported in the Report of Change, and, at the taxpayer's request, shall either be refunded to the taxpayer or be credited against the taxpayer's future tax liability.
Notes
| 117 |