In sales and use tax, providing for mandatory reporting and remittance oversight authority.
Summary
HB2300 would amend Pennsylvania’s Tax Reform Code to give the Department of Revenue new authority to require certain sales tax taxpayers to use an authorized service provider to report and remit taxes. The requirement would apply only to taxpayers with either a delinquent sales tax balance over $5,000 for which the department has filed a lien, or three consecutive unfiled returns. Once notified, the taxpayer would have 45 days to enroll with an authorized service provider, and the obligation would generally continue until at least one year after enrollment or six months after all delinquencies are reported and paid, whichever is later.
The bill also allows the department to post a list of approved providers, imposes a $10,000 penalty for failing to enroll on time, and lets taxpayers continue using the provider after the mandatory period ends if they choose. During the first 12 months of required use, the Department of Revenue would pay the provider’s costs, with the taxpayer responsible for costs after that period. The department could only cover those costs once in a taxpayer’s lifetime or existence.
Impact
The bill would add a new section to the sales and use tax provisions of the Tax Reform Code of 1971, creating a compliance and oversight mechanism aimed at delinquent or non-filing taxpayers. It would expand the Department of Revenue’s enforcement tools by authorizing mandatory third-party reporting and remittance oversight, establishing notice and enrollment procedures, and creating a new penalty for noncompliance. The measure would directly affect sales tax taxpayers with significant delinquencies or repeated filing failures, as well as authorized service providers that would be approved to handle reporting and remittance.
Sentiment
The available voting history suggests the bill was favorably received in committee, as the House Finance Committee reported it as committed by a 22-3 vote. No committee transcript is available, so there is no recorded debate to indicate broader support or opposition arguments. Based on the vote, the measure appears to have had substantial support among committee members, though not unanimous.
Contention
The main points of contention are likely to center on the scope of state enforcement authority, the mandatory use of a third-party service provider, and the $10,000 penalty for failing to enroll. Supporters would likely view the bill as a targeted compliance tool for taxpayers with serious delinquencies or repeated nonfiling, while critics may object to the administrative burden, privacy or business-cost concerns, and the requirement that taxpayers use an outside provider. The cost-shifting structure, under which the department pays for the first 12 months but the taxpayer pays afterward, may also be a point of debate.
In sales and use tax, further providing for exclusions from tax; and, in gross receipts tax, further providing for imposition of tax; and providing for reporting and for transfers.