Pennsylvania ~ Multiple Taxes: Reciprocity with New Jersey, Tax Amnesty Program, Tobacco Taxes, Tax Registration, and Filing Discussed

CCH Tax Day Report

A Pennsylvania Department of Revenue newsletter discusses the continuation of Pennsylvania’s personal income tax reciprocity agreement with New Jersey; the tax amnesty program; tobacco taxes; a new tax registration office; free income tax e-filing; and corporation income tax filing tips.

Reciprocity

The department discusses the continuation of the tax reciprocal agreement between Pennsylvania and New Jersey. In late November, New Jersey indicated that it would reverse its previously announce termination of the agreement between the two states. The agreement allows commuters to pay income tax to the state where they live, rather than the state where they work. Pennsylvania employers of New Jersey residents will continue to withhold new Jersey personal income tax on behalf of their new Jersey resident employees and remit that tax to the state of new Jersey. New Jersey employers of Pennsylvania residents will continue to withhold Pennsylvania personal income tax on behalf of their Pennsylvania resident employees and remit that tax to Pennsylvania.

Tax Amnesty

For taxes it administers, the department reminds taxpayers that it will administer a 60-day tax amnesty from April 21, 2017, through June 19, 2017, as reported previously. (TAXDAY, 2016/09/13, S.17) During the amnesty period, all penalties and half of any interest owed will be waived for qualifying taxpayers who apply and pay delinquent taxes.

Tobacco

For purposes of the new Pennsylvania tax on tobacco products, a floor tax return and payment are due by December 29, 2016. Enactment of the new tax, which was effective October 1, 2016, and the floor tax were announced previously. (TAXDAY, 2016/07/19, S.29)

Tax Registration

Further, the department has launched a new Tax Registration Office. This office will combine business registration functions previously managed separately by the Bureau of Business Trust Fund Taxes and the Bureau of Corporation Tax into one centralized area. The Tax Registration Office will be a one-stop shop to register and update account information for the following tax types: corporation taxes; employer withholding tax; promoter license; public transportation assistance tax license; sales tax exempt status; sales, use, hotel occupancy tax license; small games of chance license/certification; transient vendor certificate; use tax; vehicle rental tax; and wholesaler certificate.

Filing

Finally, the department discusses personal and corporation income tax filing. Personal income taxpayers can continue to e-file state income tax returns for free using padirectfile next year, but PA Free File will not be available. The Free File Alliance ended an agreement with the department to offer PA Free File as a no cost option for Pennsylvanians with a federal adjusted gross income of $62,000 or less to file state income tax returns. The alliance terminated the agreement because Pennsylvania offers padirectfile, a no cost state-only personal income tax filing system through the department’s website. Lastly, the department offers these filing tips for corporation taxes: use the correct form, properly submit amended returns, use only numbers in numeric fields, use checkboxes appropriately, provide all demographic information, complete history of earnings correctly, claim bonus depreciation properly, calculate apportionment appropriately, report foreign corporations’ lack of activity, and account for partnership activity.

Tax Update 187, Pennsylvania Department of Revenue, October/November 2016

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