An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for tax amnesty program for fiscal year 2025-2026.

PRINTER'S NO. 2084
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1694
Session of
2025
INTRODUCED BY CEPEDA-FREYTIZ, HILL-EVANS, SANCHEZ, MAYES,
HADDOCK, T. DAVIS, D. WILLIAMS, NEILSON, HOHENSTEIN AND
BELLMON, JULY 2, 2025
REFERRED TO COMMITTEE ON FINANCE, JULY 7, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for tax amnesty program for fiscal year
2025-2026.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XXIX-J
TAX AMNESTY PROGRAM FOR FISCAL YEAR 2025-2026
Section 2901-J. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Amnesty period." The time period of 90 consecutive days
established by the Governor ending no later than June 30, 2026.
"Department." The Department of Revenue of the Commonwealth.
"Eligible tax." As follows:
(1) A tax administered by the department under this act
that became delinquent during a taxable period.
(2) The term includes any interest, penalty or fee on an
eligible tax.
(3) For an unknown liability, the term only includes
taxes due during a taxable period.
(4) For purposes of taxes collected under the
International Fuel Tax Agreement, the term applies only to
taxes, interest and penalties owed to the Commonwealth, not
to other states or Canadian provinces.
"Program." The tax amnesty program established under section
2902-J as provided for in this article.
"Taxable period." A taxable year beginning after December
31, 2019, and ending no later than December 31, 2024.
"Taxpayer." As follows:
(1) A person, association, fiduciary, partnership,
corporation or other entity required to pay or collect any of
the eligible taxes.
(2) The term does not include a taxpayer that:
(i) prior to the amnesty period, has received notice
that the taxpayer is the subject of a criminal
investigation for an alleged violation of any law
imposing an eligible tax;
(ii) prior to the amnesty period, has been named as
a defendant in a criminal complaint alleging a violation
of any law imposing an eligible tax; or
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(iii) is a defendant in a pending criminal action
for an alleged violation of any law imposing an eligible
tax.
"Unknown liability." A liability for an eligible tax for
which:
(1) a return or report has not been filed, a payment has
not been made and the taxpayer has not been contacted by the
department concerning the unfiled returns or reports or
unpaid tax; or
(2) a return or report has been filed, the tax was
underreported and the taxpayer has not been contacted by the
department concerning the underreported tax and is not
already under audit when the amnesty period begins.
Section 2902-J. Establishment of program.
(a) Establishment and administration.--Subject to sections
2902-F(c) and 2902-G(c), a tax amnesty program is established
and shall be administered by the department.
(b) Applicability.--Subject to sections 2902-F(c) and 2902-
G(c), the program shall apply to a taxpayer that became
delinquent on payment of a liability for an eligible tax during
a taxable period, including a liability for returns not filed,
liabilities according to records of the department during a
taxable period, liabilities not reported, underreported or not
established, but delinquent during a taxable period.
(c) Future amnesty program participation.--A taxpayer that
participates in the program shall not be eligible to participate
in a future tax amnesty program.
(d) Deferred payment plan agreement.--An existing deferred
payment plan agreement between a taxpayer and the department
where the agreement applies to a tax liability for which amnesty
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is sought by the taxpayer for amounts remaining on the tax
liability, the taxpayer, as a condition of receiving amnesty,
shall pay the liability, notwithstanding terms of the agreement
to the contrary, in full during the amnesty period.
Section 2903-J. Required payment.
(a) Taxpayer requirements.--Subject to section 2904-J, each
taxpayer that participates in the program shall comply with all
of the following:
(1) During the amnesty period:
(i) File a tax amnesty return, in the form and
manner prescribed by the department, which contains the
information that the department requires. A tax amnesty
return shall be considered to be timely filed if, during
the amnesty period, the tax amnesty return is postmarked
or filed electronically or otherwise.
(ii) Make payment of all taxes due to the
Commonwealth in accordance with the tax amnesty return
that is filed. The taxpayer shall not be required to pay
any penalty, interest or fee applicable to an eligible
tax.
(2) As applicable, file:
(i) Complete tax returns for all required years for
which the taxpayer previously has not filed a tax return.
(ii) Complete amended tax returns for all required
years for which the taxpayer underreported eligible tax
liability.
(b) Prohibitions.--
(1) The department may not collect any penalty, interest
or fee waived under subsection (a)(2).
(2) Except as otherwise provided in this article, the
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department may not pursue administrative or judicial
proceeding against a taxpayer with respect to an eligible tax
that is disclosed on a tax amnesty return.
(c) Refund.--A taxpayer shall not be owed a refund under
this article.
Section 2904-J. Amnesty contingent on continued compliance.
The department may assess and collect from a taxpayer granted
amnesty under this article all penalties and interest waived
through the program if, within two years after the end of the
program, either of the following occurs:
(1) The taxpayer:
(i) becomes delinquent for three consecutive periods
in payment of taxes due or filing of returns required on
a semimonthly, monthly, quarterly or other basis; and
(ii) has not contested the tax liability through a
timely valid administrative or judicial appeal.
(2) The taxpayer:
(i) becomes delinquent and is eight or more months
late in payment of taxes due or filing of returns on an
annual basis; and
(ii) has not contested the tax liability through a
timely valid administrative or judicial appeal.
Section 2905-J. Limitation of deficiency assessment.
If, subsequent to the amnesty period, the department issues a
deficiency assessment with respect to a tax amnesty return, the
department may impose penalties and pursue a criminal action
only with respect to the difference between the amount shown on
that tax amnesty return and the current amount of tax.
Section 2906-J. Overpayment of tax.
If an overpayment of eligible tax is refunded or credited
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within 180 days after the tax amnesty return is filed or the
eligible tax is paid, whichever is later, interest shall not be
allowed on the overpayment.
Section 2907-J. Previously paid interest and penalties.
A refund or credit shall not be allowed for any interest or
penalty on eligible taxes paid to the department prior to the
amnesty period.
Section 2908-J. Proceedings relating to tax amnesty return
barred.
Participation in the program shall be conditioned upon the
taxpayer's agreement that the right to protest or pursue an
administrative or judicial proceeding with regard to tax amnesty
returns filed under the program or to claim a refund of money
paid under the program is barred.
Section 2909-J. Undisclosed liabilities.
Nothing in this article shall be construed to prohibit the
department from instituting civil or criminal proceedings
against a taxpayer with respect to an amount of tax that is not
disclosed on the tax amnesty return or an amount disclosed on
the amnesty return that is not paid.
Section 2910-J. Duties of department.
(a) Guidelines.--
(1) The department shall develop guidelines to implement
and administer the provisions of this article.
(2) Within 60 days of the effective date of this
paragraph, the department shall transmit notice of the
development of the guidelines under this subsection to the
Legislative Reference Bureau for publication in the next
available issue of the Pennsylvania Bulletin, which must
contain the following:
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(i) An explanation of the program and the
requirements for eligibility for the program.
(ii) The dates during which a tax amnesty return may
be filed.
(iii) A specimen copy of the tax amnesty return.
(iv) The amnesty revenue estimates required under
section 2912-J(b).
(b) Publicity.--The department shall publicize the program
to maximize public awareness of and participation in the
program. The department shall coordinate to the highest degree
possible its publicity efforts and other actions taken to
implement this article.
(c) Reports.--The department shall issue reports to the
General Assembly detailing program implementation. The reports
shall contain the following information:
(1) Within 30 days after the end of the amnesty period:
(i) A detailed breakdown of the department's
administrative costs in implementing the program.
(ii) The total dollar amount of revenue collected
under the program.
(2) Within 180 days after the end of the amnesty period:
(i) The number of tax amnesty returns filed and a
breakdown of the number and dollar amount of revenue
raised for each tax by calendar year during which the tax
period ended. In addition, the gross revenues shall be
broken down in the following categories:
(A) Amounts represented by assessments
receivable established by the department on or before
the first day of the amnesty period.
(B) All other amounts.
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(ii) The total dollar amount of penalties, interest
and fees waived under the program.
(iii) The demographic characteristics of tax amnesty
participants, including North American Industry
Classification System codes of participants, type of
taxpayer, consisting of individual, partnership,
corporation or other entity, size of tax liability and
geographical location.
(d) Notification.--The department shall notify in writing
each known tax delinquent, at the last known valid address of
the taxpayer, of the existence of the program. The sole purpose
of the letter sent by the department to the taxpayer shall be
notification of the program.
Section 2911-J. Method of payment.
All tax payments under the program shall be made by certified
check, money order, electronic transfer, credit card or other
financial instrument acceptable to the department.
Section 2912-J. Use of revenue.
(a) Restricted revenue account.--
(1) All revenue generated by this article shall be
deposited into a restricted revenue account in the General
Fund.
(2) Revenue from the restricted revenue account shall be
distributed as follows:
(i) All money from General Fund sources shall be
deposited in the General Fund no later than June 30,
2026, less repayment of any costs for administration of
the program to the department.
(ii) All revenue from Motor License Fund sources
shall be deposited in the Motor License Fund no later
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than June 30, 2026.
(iii) All revenue from Liquid Fuels Tax Fund sources
shall be deposited in the Liquid Fuels Tax Fund no later
than June 30, 2026.
(b) Revenue estimates.--
(1) The department shall transmit to the Legislative
Reference Bureau for publication in the next available issue
of the Pennsylvania Bulletin:
(i) A separate amnesty revenue estimate for revenue
generated under this article from the following sources:
(A) The General Fund.
(B) The Motor License Fund.
(C) The Liquid Fuels Tax Fund.
(ii) The methodology used to develop the estimate.
(2) All amnesty revenue estimates shall be submitted for
publication in accordance with section 2910-J(a)(2)(iv).
Section 2913-J. Additional penalty.
(a) General rule.--Subject to the limitations provided under
subsection (b), a penalty of 5% of the unpaid tax liability and
penalties and interest shall be levied against a taxpayer
subject to an eligible tax if the taxpayer failed to remit an
eligible tax due or had an unreported or underreported liability
for an eligible tax on or after the first day following the end
of the amnesty period.
(b) Nonapplicability.--The penalty provided in this section
shall not apply to a taxpayer that:
(1) pays the liability in full or entered into a duly
approved and executed deferred payment plan on or before the
last day of the amnesty period; or
(2) has filed a timely and valid administrative or
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judicial appeal contesting the liability on or before the
last day of the amnesty period.
(c) Penalty in addition.--The penalty provided by this
section shall be in addition to other penalties provided by law.
Section 2914-J. Construction.
Except as expressly provided in this article, this article
shall not:
(1) Be construed to relieve a person, corporation or
other entity from the filing of a return or from a tax,
penalty or interest imposed by the provisions of any law.
(2) Affect or terminate a petition, investigation,
prosecution, legal or otherwise, or other proceeding pending
under the provisions of any law.
(3) Prevent the commencement or further prosecution of a
proceeding by the proper authorities of the Commonwealth for
violation of any law or for the assessment, settlement,
collection or recovery of tax, penalty or interest due to the
Commonwealth under any law.
Section 2915-J. Suspension of inconsistent acts.
All acts or parts of acts inconsistent with the provisions of
this article are suspended to the extent necessary to carry out
the provisions of this article.
Section 2. This act shall take effect immediately.
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