Disgruntled taxpayers in Pennsylvania would have a new option for disputing their tax bills under legislation approved yesterday by a state Senate panel.
- Sponsored by GOP state Sen. Tim Hutchinson, the bill would create an independent settlement process, potentially avoiding protracted court battles over tax bills, according to its supporters, which include the Pennsylvania Institute of CPAs and Pennsylvania Treasurer Stacy Garrity.
- “The current tax appeal process can be bureaucratic and cumbersome, and it’s a real burden for too many hardworking Pennsylvanians,” Garrity said yesterday in a statement.
- The proposed changes would resolve issues more quickly and shift the state’s focus to more complex cases, Garrity and other supporters said.
- The Pennsylvania Department of Revenue, however, is opposed to the legislation, confirmed Jeff Johnson, an agency spokesperson, who declined to share the reasons.
- “We are still in the process of engaging with members of the General Assembly on the proposal,” Johnson said
- Some observers have questioned whether an additional avenue for appeals is necessary.
What’s the current process: It starts with an administrative appeals board inside the revenue department, a board that heard 35,665 appeals last year, according to Johnson
- If the appeals board rules against them, taxpayers can turn to the Board of Finance & Revenue, a three-person panel housed in the Treasury Department.
- To ensure its independence, the panel has a chair designated by the state treasurer and two members appointed by the governor and confirmed by the Senate.
- The board receives about 4,200 appeals each year and must resolve each one within six months of receipt, according to Treasury. If not, the original ruling stands.
- If taxpayers are still upset, they can appeal to Commonwealth Court.
- Taxpayers also can try to reach a compromise directly with the revenue department.
- About 13% of eligible cases are resolved prior to a court appeal, Treasury said.
- “For me, this legislation boils down to one question,” Garrity said in her statement. “Do you want to create an even playing field for Pennsylvania taxpayers or do you want to maintain a system that’s titled in favor of the massive bureaucracy at the Department of Revenue? I think the answer is clear, and residents and businesses across the state will benefit from this common-sense, pro-taxpayer legislation.”
What’s the legislation: Senate Bill 1051, which was approved yesterday on a vote of 7 to 4.
- The bill would establish a new dispute-resolution process overseen by an independent settlement officer appointed by the Board of Finance & Revenue.
- Both the taxpayer and tax collector would have to agree to enter the process.
- The legislation also would relax statutory appeals deadlines for taxpayers with extenuating circumstances, such as an illness.
- A similar bill is pending in the state House, sponsored by Rep. Tim Briggs, a Montgomery County Democrat.
- It is currently before the House Finance Committee, where some changes may be in store.
- “I’m currently working to address some concerns expressed by the Department of Revenue to ensure that the bill will truly help taxpayers have more efficient options when it comes to tax disputes,” Briggs said in a statement.
