Bill Text: PA HB2560 | 2009-2010 | Regular Session | Introduced

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Bill Title: In corporate net income tax, further providing for definitions and for imposition of tax; in procedure and administration, further providing for definitions, for petition for reassessment and for petition procedure; repealing provisions relating to review by board and providing for review by Tax Review Tribunal; and establishing the Tax Review Tribunal and providing for its powers and duties.

Spectrum: Slight Partisan Bill (Democrat 9-3)

Status: (Introduced - Dead) 2010-06-08 - Referred to FINANCE [HB2560 Detail]

Download: Pennsylvania-2009-HB2560-Introduced.html

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PRINTER'S NO. 3862
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2560 Session of2010
INTRODUCED BY PAYTON, GIBBONS, GOODMAN, HORNAMAN, JOSEPHS, MOUL, READSHAW, SCAVELLO, SIPTROTH, STURLA AND SWANGER, JUNE 8, 2010
REFERRED TO COMMITTEE ON FINANCE, JUNE 8, 2010
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," in corporate net income tax, further providing
for definitions and for imposition of tax; in procedure and
administration, further providing for definitions, for
petition for reassessment and for petition procedure;
repealing provisions relating to review by board and
providing for review by Tax Review Tribunal; and establishing
the Tax Review Tribunal and providing for its powers and
duties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 401(3)2(a) and 4(c) of the act of March
4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,
amended or added December 23, 1983 (P.L.370, No.90), August 4,
1991 (P.L.97, No.22), June 22, 2001 (P.L.353, No.23), June 29,
2002 (P.L.559, No.89), July 12, 2006 (P.L.1137, No.116) and
October 9, 2009 (P.L.451, No.48), are amended, clause (3)2 is
amended by adding a phrase and the section is amended by adding
clauses to read:
Section 401. Definitions.--The following words, terms, and
phrases, when used in this article, shall have the meaning
ascribed to them in this section, except where the context
clearly indicates a different meaning:
* * *
(3) "Taxable income." * * *
2. In case the entire business of any corporation, other
than a corporation engaged in doing business as a regulated
investment company as defined by the Internal Revenue Code of
1986, is not transacted within this Commonwealth, the tax
imposed by this article shall be based upon such portion of the
taxable income of such corporation for the fiscal or calendar
year, as defined in subclause 1 hereof, and may be determined as
follows:
(a) Division of Income.
(1) As used in this definition, unless the context otherwise
requires:
(A) "Business income" means income arising from transactions
and activity in the regular course of the taxpayer's trade or
business and includes income from tangible and intangible
property if either the acquisition, the management or the
disposition of the property constitutes an integral part of the
taxpayer's regular trade or business operations. The term
includes all income which is apportionable under the
Constitution of the United States.
(B) "Commercial domicile" means the principal place from
which the trade or business of the taxpayer is directed or
managed.
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(C) "Compensation" means wages, salaries, commissions and
any other form of remuneration paid to employes for personal
services.
(D) "Nonbusiness income" means all income other than
business income. The term does not include income which is
apportionable under the Constitution of the United States.
(E) "Sales" means all gross receipts of the taxpayer not
allocated under this definition other than dividends received,
interest on United States, state or political subdivision
obligations and gross receipts heretofore or hereafter received
from the sale, redemption, maturity or exchange of securities,
except those held by the taxpayer primarily for sale to
customers in the ordinary course of its trade or business.
(F) "State" means any state of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any
territory or possession of the United States, and any foreign
country or political subdivision thereof.
(G) "This state" means the Commonwealth of Pennsylvania or,
in the case of application of this definition to the
apportionment and allocation of income for local tax purposes,
the subdivision or local taxing district in which the relevant
tax return is filed.
(2) Any taxpayer having income from business activity which
is taxable both within and without this State other than
activity as a corporation whose allocation and apportionment of
income is specifically provided for in section 401(3)2(b)(c) and
(d) shall allocate and apportion taxable income as provided in
this definition.
(3) For purposes of allocation and apportionment of income
under this definition, a taxpayer is taxable in another state if
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in that state the taxpayer is subject to a net income tax, a
franchise tax measured by net income, a franchise tax for the
privilege of doing business, or a corporate stock tax or if that
state has jurisdiction to subject the taxpayer to a net income
tax regardless of whether, in fact, the state does or does not.
(4) Rents and royalties from real or tangible personal
property, gains, interest, patent or copyright royalties, to the
extent that they constitute nonbusiness income, shall be
allocated as provided in paragraphs (5) through (8).
(5) (A) Net rents and royalties from real property located
in this State are allocable to this State.
(B) Net rents and royalties from tangible personal property
are allocable to this State if and to the extent that the
property is utilized in this State, or in their entirety if the
taxpayer's commercial domicile is in this State and the taxpayer
is not organized under the laws of or taxable in the state in
which the property is utilized.
(C) The extent of utilization of tangible personal property
in a state is determined by multiplying the rents and royalties
by a fraction, the numerator of which is the number of days of
physical location of the property in the state during the rental
or royalty period in the taxable year and the denominator of
which is the number of days of physical location of the property
everywhere during all rental or royalty periods in the taxable
year. If the physical location of the property during the rental
or royalty period is unknown or unascertainable by the taxpayer,
tangible personal property is utilized in the state in which the
property was located at the time the rental or royalty payer
obtained possession.
(6) (A) Gains and losses from sales or other disposition of
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real property located in this State are allocable to this State.
(B) Gains and losses from sales or other disposition of
tangible personal property are allocable to this State if the
property had a situs in this State at the time of the sale, or
the taxpayer's commercial domicile is in this State and the
taxpayer is not taxable in the state in which the property had a
situs.
(C) Gains and losses from sales or other disposition of
intangible personal property are allocable to this State if the
taxpayer's commercial domicile is in this State.
(7) Interest is allocable to this State if the taxpayer's
commercial domicile is in this State.
(8) (A) Patent and copyright royalties are allocable to
this State if and to the extent that the patent or copyright is
utilized by the payer in this State, or if and to the extent
that the patent copyright is utilized by the payer in a state in
which the taxpayer is not taxable and the taxpayer's commercial
domicile is in this State.
(B) A patent is utilized in a state to the extent that it is
employed in production, fabrication, manufacturing, or other
processing in the state or to the extent that a patented product
is produced in the state. If the basis of receipts from patent
royalties does not permit allocation to states or if the
accounting procedures do not reflect states of utilization, the
patent is utilized in the state in which the taxpayer's
commercial domicile is located.
(C) A copyright is utilized in a state to the extent that
printing or other publication originates in the state. If the
basis of receipts from copyright royalties does not permit
allocation to states or if the accounting procedures do not
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reflect states of utilization, the copyright is utilized in the
state in which the taxpayer's commercial domicile is located.
(9) (A) Except as provided in subparagraph (B):
(i) For taxable years beginning before January 1, 2007, all
business income shall be apportioned to this State by
multiplying the income by a fraction, the numerator of which is
the property factor plus the payroll factor plus three times the
sales factor and the denominator of which is five.
(ii) For taxable years beginning after December 31, 2006,
all business income shall be apportioned to this State by
multiplying the income by a fraction, the numerator of which is
the sum of fifteen times the property factor, fifteen times the
payroll factor and seventy times the sales factor and the
denominator of which is one hundred.
(iii) For taxable years beginning after December 31, 2008,
all business income shall be apportioned to this State by
multiplying the income by a fraction, the numerator of which is
the sum of eight and a half times the property factor, eight and
a half times the payroll factor and eighty-three times the sales
factor and the denominator of which is one hundred.
(iv) For taxable years beginning after December 31, 2009,
all business income shall be apportioned to this State by
multiplying the income by a fraction, the numerator of which is
the sum of five times the property factor, five times the
payroll factor and ninety times the sales factor and the
denominator of which is one hundred.
(v) For taxable years beginning after December 31, 2013, all
business income shall be apportioned to this State by
multiplying the income by the sales factor.
(B) For purposes of apportionment of the capital stock -
20100HB2560PN3862 - 6 -
franchise tax as provided in section 602 of Article VI of this
act, the apportionment fraction shall be the property factor
plus the payroll factor plus the sales factor as the numerator,
and the denominator shall be three.
(10) The property factor is a fraction, the numerator of
which is the average value of the taxpayer's real and tangible
personal property owned or rented and used in this State during
the tax period and the denominator of which is the average value
of all the taxpayer's real and tangible personal property owned
or rented and used during the tax period but shall not include
the security interest of any corporation as seller or lessor in
personal property sold or leased under a conditional sale,
bailment lease, chattel mortgage or other contract providing for
the retention of a lien or title as security for the sales price
of the property.
(11) Property owned by the taxpayer is valued at its
original cost. Property rented by the taxpayer is valued at
eight times the net annual rental rate. Net annual rental rate
is the annual rental rate paid by the taxpayer less any annual
rental rate received by the taxpayer from subrentals.
(12) The average value of property shall be determined by
averaging the values at the beginning and ending of the tax
period but the tax administrator may require the averaging of
monthly values during the tax period if reasonably required to
reflect properly the average value of the taxpayer's property.
(13) The payroll factor is a fraction, the numerator of
which is the total amount paid in this State during the tax
period by the taxpayer for compensation and the denominator of
which is the total compensation paid everywhere during the tax
period.
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(14) Compensation is paid in this State if:
(A) The individual's service is performed entirely within
the State;
(B) The individual's service is performed both within and
without this State, but the service performed without the State
is incidental to the individual's service within this State; or
(C) Some of the service is performed in this State and the
base of operations or if there is no base of operations, the
place from which the service is directed or controlled is in
this State, or the base of operations or the place from which
the service is directed or controlled is not in any state in
which some part of the service is performed, but the
individual's residence is in this State.
(15) The sales factor is a fraction, the numerator of which
is the total sales of the taxpayer in this State during the tax
period, and the denominator of which is the total sales of the
taxpayer everywhere during the tax period.
(16) Sales of tangible personal property are in this State
if the property is delivered or shipped to a purchaser, within
this State regardless of the f.o.b. point or other conditions of
the sale.
(17) Sales, other than sales of tangible personal property,
are in this State if:
(A) The income-producing activity is performed in this
State; or
(B) The income-producing activity is performed both in and
outside this State and a greater proportion of the income-
producing activity is performed in this State than in any other
state, based on costs of performance.
(18) If the allocation and apportionment provisions of this
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definition do not fairly represent the extent of the taxpayer's
business activity in this State, the taxpayer may petition the
Secretary of Revenue or the Secretary of Revenue may require, in
respect to all or any part of the taxpayer's business activity:
(A) Separate accounting;
(B) The exclusion of any one or more of the factors;
(C) The inclusion of one or more additional factors which
will fairly represent the taxpayer's business activity in this
State; or
(D) The employment of any other method to effectuate an
equitable allocation and apportionment of the taxpayer's income.
In determining the fairness of any allocation or apportionment,
the Secretary of Revenue may give consideration to the
taxpayer's previous reporting and its consistency with the
requested relief.
* * *
(e) Corporations That are Members of a Unitary Business.
(1) Notwithstanding any contrary provisions of this article,
for taxable years that begin on or after January 1, 2010,
business income of a corporation that is a member of a unitary
business that consists of two or more corporations, at least one
of which does not transact its entire business in this State, is
determined by combining the business income of either all
corporations, other than as set forth below, that are water's-
edge basis members or all corporations, other than as set forth
below, that are worldwide members of the unitary business. All
transactions among included corporations of the unitary business
are eliminated in determining the business income of a
corporation that is a member of that unitary business. Business
income of the following corporations is not included in the
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determination of combined business income:
(i) any corporation subject to taxation under Article VII,
VIII, IX or XV;
(ii) any corporation specified in the definition of
"institution" in section 701.5 that would be subject to taxation
under Article VII were it located, as defined in section 701.5,
in this State;
(iii) any corporation commonly known as a title insurance
company that would be subject to taxation under Article VIII
were it incorporated in this State;
(iv) any corporation specified as an insurance company,
association or exchange in Article IX that would be subject to
taxation under Article IX were its insurance business transacted
in this State;
(v) any corporation specified in the definition of
"institution" in section 1501 that would be subject to taxation
under Article XV were it located, as defined in section 1501, in
this State;
(vi) any corporation that is a small corporation, as defined
in section 301(s.2), or a qualified Subchapter S subsidiary, as
defined in section 301(o.3).
(2) Notwithstanding any contrary provisions of this article,
all corporations that are required to compute business income
under paragraph (1) are entitled to apportion such business
income when one corporation of the same unitary business is
entitled to apportion such business income. Notwithstanding any
contrary provisions of this article, for taxable years that
begin on or after January 1, 2010, the denominator of the
apportionment fraction of a corporation that is required to
compute its business income under paragraph (1) shall be
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computed on a combined basis for all included corporations of
the unitary business. All transactions among included
corporations of the unitary business are eliminated in computing
the numerator and denominator of the apportionment fraction of a
corporation that is required to compute its business income
under paragraph (1). The apportionment fraction of the following
corporations is not included in the determination of the
combined apportionment fraction:
(i) any corporation subject to taxation under Article VII,
VIII, IX or XV;
(ii) any corporation specified in the definition of
"institution" in section 701.5 that would be subject to taxation
under Article VII were it located, as defined in section 701.5,
in this State;
(iii) any corporation commonly known as a title insurance
company that would be subject to taxation under Article VIII
were it incorporated in this State;
(iv) any corporation specified as an insurance company,
association or exchange in Article IX that would be subject to
taxation under Article IX were its insurance business transacted
in this State;
(v) any corporation specified in the definition of
"institution" in section 1501 that would be subject to taxation
under Article XV were it located, as defined in section 1501, in
this State;
(vi) any corporation that is a small corporation, as defined
in section 301(s.2), or a qualified Subchapter S subsidiary, as
defined in section 301(o.3).
(3) A corporation that is required to compute its business
income under paragraph (1) shall apportion such combined
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business income by multiplying such combined business income by
a fraction which is the combined apportionment fraction set
forth in paragraph (2).
(4) Nonbusiness income of a corporation that is required to
compute business income under paragraph (1) shall be allocated
as provided in paragraphs (5) through (8) of phrase (a) of
subclause 2 of the definition of "taxable income."
(5) Each corporation that is a member of a unitary business
that consists of two or more corporations determines its tax
liability based on its apportioned share of the combined
business income of the unitary business plus its nonbusiness
income or loss allocated to this State, minus its net loss
deduction.
(6) If any provision of this phrase operates so that an
amount is added to or deducted from taxable income for a taxable
year for any corporation of a unitary business that previously
had been added to or deducted from taxable income of any
corporation of the same unitary business, an appropriate
adjustment shall be made for the taxable year in order to
prevent double taxation or double deduction. If this adjustment
is not made by the appropriate corporation of the unitary
business, the Secretary of Revenue is authorized to make this
adjustment.
(7) The Secretary of Revenue has the authority and
responsibility to make adjustments to ensure that a corporation
does not incur an unfair penalty nor realize an unfair benefit
because it is required to compute its business income under
paragraph (1). Fairness shall be measured by whether the
corporation's income allocated and apportioned to this State
fairly reflects the corporation's share of the unitary business
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conducted in this State in the taxable year.
* * *
4. * * *
(c) (1) [The] For taxable years beginning before January 1,
2014, the net loss deduction shall be the lesser of:
(A) (I) For taxable years beginning before January 1, 2007,
two million dollars ($2,000,000);
(II) For taxable years beginning after December 31, 2006,
the greater of twelve and one-half per cent of taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
three million dollars ($3,000,000);
(III) For taxable years beginning after December 31, 2008,
the greater of fifteen per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or three
million dollars ($3,000,000);
(IV) For taxable years beginning after December 31, 2009,
the greater of twenty per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or three
million dollars ($3,000,000); or
(B) The amount of the net loss or losses which may be
carried over to the taxable year or taxable income as determined
under subclause 1 or, if applicable, subclause 2.
(1.1) In no event shall the net loss deduction include more
than five hundred thousand dollars ($500,000), in the aggregate,
of net losses from taxable years 1988 through 1994.
(1.2) For taxable years beginning after December 31, 2013,
there shall be no maximum on the amount of the net loss
deduction.
(2) (A) A net loss for a taxable year may only be carried
over pursuant to the following schedule:
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Taxable Year Carryover
1981 1 taxable year
1982 2 taxable years
1983-1987 3 taxable years
1988 2 taxable years plus 1 taxable year starting with the 1995 taxable year
1989 1 taxable year plus 2 taxable years starting with the 1995 taxable year
1990-1993 3 taxable years starting with the 1995 taxable year
1994 1 taxable year
1995-1997 10 taxable years
1998 and thereafter 20 taxable years
(B) The earliest net loss shall be carried over to the
earliest taxable year to which it may be carried under this
schedule. [The] For taxable years beginning before January 1,
2014, the total net loss deduction allowed in any taxable year
shall not exceed:
(I) Two million dollars ($2,000,000) for taxable years
beginning before January 1, 2007.
(II) The greater of twelve and one-half per cent of the
taxable income as determined under subclause 1 or, if
applicable, subclause 2 or three million dollars ($3,000,000)
for taxable years beginning after December 31, 2006.
(III) The greater of fifteen per cent of the taxable income
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as determined under subclause 1 or, if applicable, subclause 2
or three million dollars ($3,000,000) for taxable years
beginning after December 31, 2008.
(IV) The greater of twenty per cent of the taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
three million dollars ($3,000,000) for taxable years beginning
after December 31, 2009.
(C) For taxable years beginning after December 31, 2013,
there shall be no maximum on the amount of the net loss
deduction.
* * *
(8) "Unitary business." A single economic enterprise that
is made up of separate parts of a single corporation, of a
commonly controlled group of corporations, or both, that are
sufficiently interdependent, integrated and interrelated through
their activities so as to provide a synergy and mutual benefit
that produces a sharing or exchange of value among them and a
significant flow of value to the separate parts. A unitary
business includes only those parts and corporations which may be
included as a unitary business under the Constitution of the
United States.
(9) "Water's-edge basis." A system of reporting that
includes the business income and apportionment factor of certain
corporations of a unitary business, described as follows:
1. The business income and apportionment factor of any
member incorporated in the United States or formed under the
laws of any state of the United States, the District of
Columbia, any territory or possession of the United States or
the Commonwealth of Puerto Rico.
2. The business income and apportionment factor of any
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member, regardless of the place incorporated or formed, if the
average of its property, payroll and sales factors within the
United States is twenty per cent or more.
3. The business income and apportionment factor of any
member which is a domestic international sales corporation as
described in sections 991, 992, 993 and 994 of the Internal
Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §§ 991, 992,
993 and 994); a foreign sales corporation as described in former
sections 921, 922, 923, 924, 925, 926 and 927 of the Internal
Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §§ 921, 922,
923, 924, 925, 926 and 927); or any member which is an export
trade corporation, as described in sections 970 and 971 of the
Internal Revenue Code of 1986 (Public Law 99-514 26 U.S.C. §§
970 and 971).
4. Any member not described in subclauses 1, 2 and 3 shall
include the portion of its business income derived from or
attributable to sources within the United States, as determined
under the Internal Revenue Code of 1986 without regard to
Federal treaties, and its apportionment factor related thereto.
5. Any member that is a "controlled foreign corporation" as
defined in section 957 of the Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. § 957), to the extent the business
income of that member is income defined in section 952 of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
952), Subpart F income, not excluding lower-tier subsidiaries'
distributions of such income which were previously taxed,
determined without regard to Federal treaties, and the
apportionment factor related to that income; any item of income
received by a controlled foreign corporation and the
apportionment factor related to such income shall be excluded if
20100HB2560PN3862 - 16 -
the corporation establishes to the satisfaction of the Secretary
of Revenue that such income was subject to an effective rate of
income tax imposed by a foreign country greater than ninety per
cent of the maximum rate of tax specified in section 11 of the
Internal Revenue Code of 1986 (Public Law 99-54, 26 U.S.C. §
11). The effective rate of income tax determination shall be
based upon the methodology set forth under 26 CFR 1.954-1
(relating to foreign base company income).
6. The business income and apportionment factor of any
member that is not described in subclauses 1, 2, 3, 4 and 5 and
that is doing business in a tax haven. The business income and
apportionment factor of a corporation doing business in a tax
haven shall be excluded if the corporation establishes to the
satisfaction of the Secretary of Revenue that its income was
subject to an effective rate of income tax imposed by a country
greater than ninety per cent of the maximum rate of tax
specified in section 11 of the Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. § 11).
Section 2. Section 402(b) of the act, amended June 29, 2002
(P.L.559, No.89), is amended to read:
Section 402. Imposition of Tax.--* * *
(b) The annual rate of tax on corporate net income imposed
by subsection (a) for taxable years beginning for the calendar
year or fiscal year on or after the dates set forth shall be as
follows:
Taxable Year Tax Rate
January 1, 1995, [and each taxable year thereafter] through taxable
20100HB2560PN3862 - 17 -
years beginning after December
31, 2009 9.99%
January 1, 2010, and each taxable year thereafter 7.90%
* * *
Section 3. Sections 2701 and 2702(b) of the act, amended
October 18, 2006 (P.L.1149, No.119), are amended to read:
Section 2701. 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:
["Board." The Board of Finance and Revenue.]
"Department." The Department of Revenue of the Commonwealth.
"Return." The term includes a tax report.
"Secretary." The Secretary of Revenue of the Commonwealth.
Section 2702. Petition for reassessment.
* * *
(b) Special rule for shares taxes.--Notwithstanding any
provision of law to the contrary, section [1104.1 of the act of
April 9, 1929 (P.L.343, No.176), known as The Fiscal Code,]
2703(g) shall constitute the exclusive method by which an appeal
from the assessment of the tax imposed by Article VII or VIII
may be made.
* * *
Section 4. Section 2703 of the act is amended by adding a
subsection to read:
Section 2703. Petition procedure.
* * *
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(g) Special rule for shares taxes.--Upon sufficient cause
shown by a taxpayer that the payment of tax assessed under
Article VII or VIII would irreparably harm the taxpayer, the
department may take jurisdiction of a petition for refund
challenging the assessed tax without the tax being paid if the
petition is filed within two years after the mailing date of the
assessment.
Section 5. Section 2704 of the act, added October 18, 2006
(P.L.1149, No.119), is repealed.
[Section 2704. Review by board.
(a) Petition for review of a decision and order.--Within 90
days after the mailing date of the department's notice of
decision and order on a petition filed with it, a taxpayer may
petition the board to review the decision and order of the
department.
(b) Petition for review of denial by department's failure to
act.--A petition for review may be filed with the board within
90 days after the mailing date of the department's notice to the
petitioner of its failure to dispose of the petition within the
time periods prescribed by section 2703(d) or (e).
(c) Contents of petition.--
(1) A petition for review of the department's decision
and order on a petition for reassessment shall state all of
the following:
(i) The tax type and tax periods included within the
petition.
(ii) The amount of the tax that the taxpayer claims
to have been erroneously assessed.
(iii) The basis upon which the taxpayer claims that
the assessment is erroneous.
20100HB2560PN3862 - 19 -
(2) A petition for review of the department's decision
and order on a petition for refund shall state all of the
following:
(i) The tax type and tax periods included within the
petition.
(ii) The amount of the tax that the taxpayer claims
to have been overpaid.
(iii) The basis of the taxpayer's claims for refund.
(3) A petition may satisfy the requirements of
paragraphs (1)(iii) or (2)(iii) by incorporating by reference
the petition filed with the department in which the basis of
the taxpayer's claim is specifically stated.
(d) Affidavit.--A petition shall be supported by an
affidavit by the petitioner or the petitioner's authorized
representative that the petition is not made for the purpose of
delay and that the facts set forth in the petition are true.
(e) Decision and order.--The board shall issue a decision
and order disposing of a petition on any basis as it deems to be
in accordance with law and equity.
(f) Time limit for decision and order.--
(1) Except as provided in paragraph (2), the board shall
issue a decision and order disposing of a petition within six
months after receipt of the petition.
(2) If at the time of the filing of a petition
proceedings are pending in a court of competent jurisdiction
in which any claim made in the petition may be established,
the board, upon the written request of the petitioner, may
defer consideration of the petition until the final judgment
determining the question or questions involved in the
petition has been decided. If consideration of the petition
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is deferred, the board shall issue a decision and order
disposing of the petition within six months after the final
judgment.
(g) Failure of board to take action.--The failure of the
board to dispose of the petition within the time period provided
for by subsection (f) shall act as a denial of the petition.
Notice of the board's failure to take action and the denial of
the petition shall be issued to the petitioner.]
Section 6. The act is amended by adding a section to read:
Section 2704.1. Review by Pennsylvania Tax Review
Tribunal.--(a) Petition for review of a decision and order.--
Within 90 days after the mailing date of the department's notice
of decision and order on a petition filed with it, a taxpayer
may petition the Pennsylvania Tax Review Tribunal to review the
decision and order of the department.
(b) Petition for review of denial by department's failure to
act.--A petition for review may be filed with the Pennsylvania
Tax Review Tribunal within 90 days after the mailing date of the
department's notice to the petitioner of its failure to dispose
of the petition within the time periods prescribed by section
2704(d) or (e).
Section 7. The act is amended by adding an article to read:
ARTICLE XXVIII
TAX REVIEW TRIBUNAL
Section 2801. 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:
"Department." The Department of Revenue of the Commonwealth.
"Judge." An administrative law judge appointed to the
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Pennsylvania Tax Review Tribunal pursuant to section 2802.
"Tribunal." The Tax Review Tribunal established in section
2802.
Section 2802. Tax Review Tribunal; establishment.
(a) Establishment.--The Tax Review Tribunal is hereby
established as an administrative board in the Treasury
Department and independent from the department.
(b) Appointment of judges.--The tribunal shall consist of no
less than five qualified and competent administrative law
judges, including a chief administrative law judge. The
administrative law judges shall be appointed by the State
Treasurer, with the approval of the Board of Finance and
Revenue. The State Treasurer, with the approval of the Board of
Finance and Revenue, shall have the power to appoint as many
additional qualified and competent administrative law judges as
may be necessary to fulfill the duties of the tribunal.
(c) Temporary appointees.--If the docket of the tribunal is
congested or any judge of the tribunal is absent or unable to
perform the duties of the office, the State Treasurer, with the
approval of the Board of Finance and Revenue, may appoint
qualified and competent persons who meet the minimum standards
established by this article to temporarily serve as
administrative law judges until the docket is no longer
congested or the judge returns to the judge's official duties.
(d) Term of office.--Administrative law judges shall be
appointed for terms of five years. The administrative law judges
initially appointed upon the establishment of the tribunal shall
be given terms of varying lengths so that all judges' terms do
not expire in the same year. However, no appointment shall be
for less than three years nor more than five years.
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Administrative law judges may be reappointed upon the expiration
of their terms.
(e) Chief administrative law judge.--The State Treasurer,
with the approval of the Board of Finance and Revenue, shall
designate one of the administrative law judges as chief
administrative law judge. The chief administrative law judge
shall be responsible for assigning a hearing judge to every
cause, matter and proceeding coming before the tribunal. The
chief administrative law judge shall receive remuneration above
that of any other administrative law judge.
(f) Continuation in office.--Once appointed each judge shall
continue in office until the judge's term expires and until a
successor has been appointed and qualified.
(g) Vacancy.--A vacancy in the tribunal occurring otherwise
than by expiration of a term shall be filled for the unexpired
term.
(h) Removal.--The State Treasurer, with approval of the
Board of Finance and Revenue, may remove an administrative law
judge, after notice and an opportunity to be heard, for neglect
of duty, inability to perform duties or malfeasance in office.
(i) Location of offices.--The offices of the tribunal shall
be located separate and apart from the department.
Section 2803. Qualifications of judges and prohibition.
(a) Requirements.--Each judge of the tribunal must meet and
maintain the following minimum requirements:
(1) Be a citizen of the United States.
(2) Be a resident of this Commonwealth.
(3) Be an attorney in good standing before the Supreme
Court of Pennsylvania.
(4) Have at least five years experience in a position
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requiring substantial knowledge of Pennsylvania tax law and
the tax appeal process.
(b) Oath of office.--Before entering upon the duties of
office, a judge shall take and subscribe to an oath or
affirmation to faithfully discharge the duties of the office.
(c) Prohibition.--Each judge shall be devoted full time
during business hours to the duties of the office. No person,
while a judge, shall engage in any other gainful employment or
business nor hold another office or position of profit in a
government of this Commonwealth, any other state or the United
States.
Section 2804. Administration.
(a) Executive administrator.--The State Treasurer, with
approval of the Board of Finance and Revenue, shall appoint an
executive administrator who shall be responsible for the day-to-
day administration and operation of the tribunal.
(b) Chief clerk.--The State Treasurer, with approval of the
Board of Finance and Revenue, shall appoint a chief clerk who
shall be responsible for recording all filings and maintaining a
record of all proceedings before the tribunal. The chief clerk
shall be responsible for certifying the record established at
the tribunal in the event of an appeal to Commonwealth Court.
(c) Expenditures.--The chief administrative law judge or his
designee may appoint and fix the compensation of accountants,
attorneys, stenographers and other employees and make other
expenditures, including expenditures for library, publications
and equipment, as necessary to permit the tribunal to
efficiently execute its functions.
(d) Limitation.--No employee of the tribunal shall act as
attorney, representative or accountant for others in a matter
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involving any tax imposed or levied by the Commonwealth.
Section 2805. Jurisdiction of tribunal.
(a) Exclusive and final authority.--Except as permitted by
section 2817, the tribunal shall be the sole, exclusive and
final authority for the hearing, review and determination of
questions of law and fact arising under a decision and order of
the department pursuant to Article XXVII. Notwithstanding any
other provision of law, the tribunal shall have jurisdiction
over all matters relating to decisions of the department mailed
after December 31, 2009, regarding reassessment,
redetermination, resettlement or refund.
(b) Improper commencement.--Except as permitted by section
2817, no person shall contest any matter within the jurisdiction
of the tribunal in any action, suit or proceeding in
Commonwealth Court or any other court of the Commonwealth. If a
person attempts to do so, then the action, suit or proceeding
shall be transferred to the tribunal.
(c) Amounts asserted as due.--The taxpayer shall have the
right to have the taxpayer's case heard by the tribunal prior to
the payment of any of the amounts asserted as due by the
department and prior to the posting of any bond except in any
case:
(1) Involving the denial of a claim for refund.
(2) Where a bond is required by statute.
(d) Characterization of certain petitions.--If the taxpayer
pays all or part of the tax or other amount at issue before the
tribunal has rendered a decision, the tribunal shall treat the
taxpayer's petition as a protest of a denial of a claim for
refund of the amount paid without further action on the part of
the taxpayer.
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(e) Constitutionality issues.--The tribunal shall decide
questions regarding the constitutionality of the application of
statutes to the taxpayer and the constitutionality of
regulations promulgated by the department but shall not have the
power to declare a statute unconstitutional on its face. A
taxpayer desiring to challenge the constitutionality of a
statute on its face may file a petition with the tribunal with
respect to all issues other than the constitutional challenge
and preserving the constitutional challenge until the entire
matter, including the constitutional issue, is presented to the
Commonwealth Court.
Section 2806. Filing fees.
(a) Fees.--Upon filing a petition pursuant to Article XXVII,
the taxpayer shall pay to the chief clerk a fee in the amount of
$100, except that, in case of a petition filed in the small
claims division as provided for in section 2816, the fee shall
be $50. A similar fee shall be paid by other parties making an
appearance in the proceeding, except that no fee shall be
charged to a government body or government official appearing in
a representative capacity.
(b) Records related fees.--The tribunal may fix a fee, not
in excess of the fees charged and collected by the clerks of the
Commonwealth Court, for comparing or for preparing and comparing
a transcript of the record, or for copying any record, entry or
other paper and the comparison and certification thereof.
(c) Disposition of fees.--All fees and other money received
or collected by the tribunal shall be paid over to the State
Treasurer and shall be held in the General Fund as miscellaneous
receipts.
Section 2807. Pleadings.
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(a) Commencement of proceeding.--A taxpayer may commence a
proceeding in the tribunal by filing a petition for review as
provided in Article XXVII.
(b) Taxpayer election.--A taxpayer may elect to proceed in
the small claims division of the tribunal by filing a petition
in the form prescribed by the tribunal for small claims. A
taxpayer may not revoke an election to proceed in the small
claims division and shall not have any further right to appeal
or bring suit.
(c) Answer.--The department shall file its answer with the
tribunal no later than 75 days after its receipt of the
tribunal's notification that the taxpayer has filed a petition.
Upon written request, the tribunal may grant up to 15 additional
days to file an answer. If the petitioner files an amended
petition as set forth in the preceding section, the department's
time period for filing its responsive pleading shall run from
the filing date of the amendment. The department shall serve a
copy on the taxpayer's representative or, if the taxpayer is not
represented, on the taxpayer, and shall file proof of service
with the answer. Material facts alleged in the petition, if not
expressly admitted or denied in the answer, shall be deemed
admitted. If the department fails to answer within the
prescribed time, all material facts alleged in the petition
shall be deemed admitted.
(d) Reply.--The taxpayer may file a reply in the tribunal
within 30 days after receipt of the answer. The taxpayer shall
serve a copy on the authorized representative of the department
and shall file proof of service with the reply. Material facts
alleged in the answer, if not expressly admitted or denied in
the reply, shall be deemed admitted. If the taxpayer does not
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file a reply, all material facts alleged in the answer shall be
deemed denied. Upon the filing of a reply or 30 days after the
filing of the answer if no reply is filed, the controversy shall
be deemed at issue and scheduled for hearing.
(e) Amendment of pleading.--Either party may amend a
pleading once without leave at any time before the period for
responding to it expires. After expiration of the response
period, a pleading may be amended only with the written consent
of the adverse party or with the permission of the tribunal. The
tribunal shall freely grant consent to amend upon just terms.
Except as otherwise ordered by the tribunal, there shall be an
answer or reply to an amended pleading if an answer or reply is
required to the pleading being amended. Filing of the answer,
or, if the answer has already been filed, the amended answer,
shall be made no later than 75 days after filing of the amended
petition. Filing of the reply or, if the reply has already been
filed, the amended reply, shall be made within 30 days after
filing of the amended answer. The taxpayer may not amend a
petition after expiration of the time for filing a petition, if
the amendment would have the effect of conferring jurisdiction
on the tribunal over a matter which otherwise would not come
within its jurisdiction. An amendment of a pleading shall relate
back to the time of filing of the original pleading unless the
tribunal shall order otherwise either on motion of a party or on
the tribunal's own initiative.
Section 2808. Presiding judge.
(a) Requirements for presiding judge.--There shall preside
at the taking of evidence and conduct of all hearings one or
more administrative law judges assigned by the chief
administrative law judge as provided in section 2802. The
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functions of all presiding judges shall be conducted in an
impartial manner. Any judge may at any time withdraw from a
proceeding if the judge deems himself disqualified, and the
chief administrative law judge may require a withdrawal upon the
appeal of any party from a decision of the presiding judge not
to withdraw. Upon disqualification of any judge, the chief
administrative law judge shall assign the matter to another
judge.
(b) Authority of presiding judge.--The presiding judge shall
have authority, subject to the provisions of this article and
the published rules of the tribunal, to:
(1) Administer oaths and affirmations.
(2) Issue subpoenas authorized by law.
(3) Rule upon offers of proof and receive relevant
evidence, take or cause depositions to be taken whenever the
ends of justice would be served thereby.
(4) Regulate the course of the hearing.
(5) Hold conferences for settlement or simplification of
the issues by consent of the parties.
(6) Dispose of procedural requests or similar matters.
(7) Make decisions or recommend decisions in conformity
within this article.
(8) Take any other action authorized by law or the rules
of the tribunal.
(c) Presiding judge to decide.--The same presiding judge
shall to the fullest extent possible preside at the reception of
all evidence in a particular case to which the judge has been
assigned. The same presiding judge who presides at the reception
of evidence shall issue the proposed decision and order on the
petition except where the presiding judge becomes unavailable to
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the tribunal.
Section 2809. Procedures in general.
(a) Admissibility of evidence.--Any oral or documentary
evidence may be received, but the tribunal shall as a matter of
policy provide for the exclusion of irrelevant, immaterial or
unduly repetitious evidence.
(b) Submission of evidence.--A party is entitled to present
the party's case or defense by oral or documentary evidence, to
submit rebuttal evidence and to conduct cross-examination as
required for a full and true disclosure of the facts. The
tribunal may adopt rules for the submission of all or part of
the evidence in written form.
(c) Record, briefs and argument.--The transcript of a
hearing, the transcript of testimony and exhibits, together with
all papers and motions filed in the proceeding, constitutes the
exclusive record for decision. Briefing and oral argument shall
be held in accordance with rules established by the tribunal.
(d) Official notice of facts.--When the tribunal's decision
rests on official notice of a material fact not appearing in the
evidence in the record, upon notification that facts are about
to be or have been noticed, any party adversely affected shall
have the opportunity upon timely request to show that the facts
are not properly noticed or that alternative facts should be
noticed. The tribunal in its discretion shall determine whether
written presentations suffice or whether oral argument, oral
evidence or cross-examination is appropriate in the
circumstances. Nothing in this subsection shall affect the
application by the tribunal in appropriate circumstances of the
doctrine of judicial notice.
(e) Actions of parties and counsel.--A party who fails to be
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represented at a scheduled conference or hearing after being
notified of the conference or hearing, shall be deemed to have
waived the opportunity to participate in the conference or
hearing and shall not be permitted thereafter to reopen the
disposition of any matter accomplished at the conference or
hearing, or to recall for further examination of witnesses who
were excused, unless the presiding judge shall determine that
failure to be represented was unavoidable and that the interests
of the other parties would not be prejudiced by permitting the
reopening or further examination. If the actions of a party or
counsel in a proceeding shall be determined by a panel of
administrative law judges assigned by the chief administrative
law judge, after due notice and opportunity for hearing, to be
obstructive to the orderly conduct of the proceeding and
inimical to the public interest, the panel may reject any claim
for relief or dismiss any proceeding and, with respect to
counsel, may impose sanctions upon counsel or a party as
appropriate or bar further participation by that counsel in any
proceedings before the tribunal.
(f) Interlocutory appeals.--An interlocutory appeal from a
ruling of a presiding judge shall be allowed to a panel of
administrative law judges assigned by the chief administrative
law judge upon certification by the presiding judge that the
ruling involves a material question which should be resolved at
that time. Notwithstanding the presiding judge's certification,
the panel shall have the authority to dismiss summarily the
interlocutory appeal if it should appear that the certification
was improvident. An interlocutory appeal shall not result in a
stay of the proceedings except upon a finding by the presiding
judge or the panel that extraordinary circumstances exist.
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Section 2810. Prehearing procedures.
(a) Conferences.--The presiding judge shall have the
authority to hold one or more prehearing conferences during the
course of the proceeding on the judge's motion or at the request
of a party to the proceeding. The presiding judge may direct the
parties to exchange their evidentiary exhibits and witness lists
at a prehearing conference. Where good cause exists, the parties
may at any time amend, by deletion or supplementation, their
evidentiary exhibits and witness lists.
(b) Disclosure of information on witnesses.--At the
prehearing conference or at some other reasonable time prior to
the hearing as determined by rule of the tribunal or order of
the president judge, each party to the proceeding shall make
available to the other parties to the proceeding the names of
the witnesses the party expects to call and the subject matter
of the witnesses' expected testimony. Where good cause exists,
the parties shall have the right at any time to amend, by
deletion or supplementation, the list of names of the witnesses
the parties plan to call and the subject matter of the expected
testimony of those witnesses.
(c) Scheduling.--The presiding judge shall have the
authority to impose schedules on the parties to the proceeding
specifying the periods of time during which the parties may
pursue discovery. The schedules and time periods shall be set
with a view to accelerating disposition of the case to the
fullest extent consistent with fairness.
Section 2811. Oaths and subpoenas.
(a) Oaths.--Any employee of the tribunal designated in
writing for the purpose by the chief administrative law judge
may administer oaths.
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(b) Subpoenas.--A judge or the chief clerk of the tribunal,
on the request of any party to the proceeding, shall have the
power to issue subpoenas requiring the attendance of witnesses
and giving of testimony and subpoenas duces tecum requiring the
production of any returns, books, papers, documents and
correspondence and other evidence pertaining to the matter under
inquiry in the manner prescribed by the Pennsylvania Rules of
Civil Procedure.
Section 2812. Discovery.
(a) Informal discovery preferred.--The parties to a
proceeding shall make reasonable effort in good faith to achieve
discovery by informal means before invoking the formal discovery
mechanisms authorized by this article.
(b) Depositions.--Any party to the proceeding shall be able
to take depositions of witnesses upon oral examination or
written questions for purposes of discovering relevant,
unprivileged information. To that end, a party may obtain
subpoenas requiring the attendance of witnesses and the
production of returns, books, papers, documents, correspondence
and other evidence pertaining to the matter under inquiry.
(c) Interrogatories.--Any party to a proceeding may serve
written interrogatories upon any other party for purposes of
discovering relevant, unprivileged information. A party served
with interrogatories may, before the time prescribed by the
tribunal for answering the interrogatories, apply to the
presiding judge for the holding of a prehearing conference for
the mutual exchange of evidence exhibits and other information.
Each interrogatory which requests information not previously
supplied at a prehearing conference or hearing shall be answered
separately and fully in writing under oath unless it is objected
20100HB2560PN3862 - 33 -
to, in which event the reasons for the objections shall be
stated in lieu of an answer. The party upon whom the
interrogatories have been served shall serve a copy of the
answers and objections within the time prescribed by the
tribunal unless otherwise specified, upon the party submitting
the interrogatories. The party submitting the interrogatories
may petition the presiding officer for an order compelling an
answer to an interrogatory or interrogatories to which there has
been an objection or other failure to answer.
(d) Requests for admissions.--A party to a proceeding may
serve upon any other party a written request for the admission
of any relevant, unprivileged, undisputed facts, the genuineness
of any document described in the request, the admissibility of
evidence, the order of proof and other similar matters. The
parties shall stipulate, to the fullest extent to which complete
or qualified agreement can or fairly should be reached, all
matters not privileged which are relevant to the proceeding.
(e) Protective orders.--The presiding judge shall have the
authority, upon motion by a party or by the person from whom
discovery is sought, and for good cause shown, to make any order
which justice requires to protect the party or person.
(f) Fees and mileage costs.--Any witness subpoenaed or whose
deposition is taken shall receive fees and mileage costs.
(g) Other discovery.--The tribunal may provide for other
forms of discovery.
(h) Enforcement.--The tribunal may enforce its orders on
discovery and other procedural issues, among other means, by
deciding issues wholly or partly against the offending party.
Section 2813. Hearings.
(a) Proceedings.--Proceedings before the tribunal shall be
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tried de novo and, to the extent permissible under the
Constitution of the United States and the Constitution of
Pennsylvania, without a jury.
(b) Role of tribunal.--Except as set forth in this article
or otherwise precluded by law, the tribunal shall take evidence,
conduct hearings and issue final and interlocutory decisions.
(c) Hearings to be public; exceptions.--
(1) Except as set forth in paragraph (2), all hearings
of the tribunal shall be transcribed and open to the public.
(2) On motion of either party the tribunal shall issue a
protective order or an order closing part or all of the
hearing from the public when the party opposing disclosure of
certain information shows good cause to protect the
information from being disclosed to the public.
(d) Evidence.--The tribunal shall admit relevant evidence if
it is probative of a material fact in controversy. The tribunal
shall exclude irrelevant and unduly repetitious evidence. A rule
of privilege recognized by law applies.
(e) Testimony.--Testimony may be given only on oath or
affirmation.
(f) Pleadings to conform to proof.--The petition and other
pleadings in the proceeding shall be deemed to conform to the
proof presented at the hearing unless a party satisfies the
tribunal that presentation of the evidence would unfairly
prejudice the party in maintaining its position on the merits or
unless deeming the taxpayer's petition to conform to the proof
would confer jurisdiction on the tribunal over a matter that
would not otherwise come within its jurisdiction.
(g) Official reporting.--Proceedings before the tribunal,
except those before the small claims division as provided for in
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section 2816 shall be officially reported. The Commonwealth
shall pay the expense of reporting from the appropriation for
the tribunal.
Section 2814. Decisions.
(a) Decision in writing.--The tribunal shall render its
decision in writing, including a concise statement of the facts
found and the conclusions of law reached. The tribunal's
decision shall, subject to law, grant the relief, invoke the
remedies and issue the orders as it deems appropriate to carry
out its decision.
(b) Failure to render decision.--If the tribunal fails to
render a decision within the prescribed time period, either
party may institute an action in mandamus to compel the issuance
of a decision.
(c) Precedent.--Except as provided in section 2816(k), the
tribunal's interpretation of a taxing statute subject to contest
in one case shall be followed by the tribunal in subsequent
cases involving the same statute, and its application of a
statute to the facts of one case shall be followed by the
tribunal in subsequent cases involving the same material facts
unless the tribunal's interpretation or application conflicts
with that of an appellate court or the tribunal provides
satisfactory reasons for reversing prior precedent, provided:
(1) It is necessarily involved and essential to the
determination of the case.
(2) There is a full consideration of the question by the
tribunal.
(3) The decision is a professed deliberate determination
of the question.
Section 2815. Proposed decision; review by panel.
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(a) Proposed decision and order.--The presiding judge shall
issue a proposed decision and order, including proposed findings
of fact and conclusions of law, within six months after
submission of the last brief filed subsequent to completion of
the hearing or, if briefs are not submitted, then no later than
six months after completion of the hearing.
(b) Final order; submission to panel.--The proposed decision
and order shall be subject to review by a panel of
administrative law judges assigned by the chief administrative
law judge upon the filing of exceptions pursuant to subsection
(c). The panel shall include the presiding judge that issued the
proposed decision and order. If no exceptions are filed, the
proposed decision and order shall become final, without further
action.
(c) Exceptions procedure.--
(1) Within 15 days of the issuance of the proposed
decision and order, a party may file exceptions to the
proposed decision and order including:
(i) alternative proposed findings of fact or
conclusions of law, if appropriate; and
(ii) the supporting reasons for the exceptions and
any alternative proposed findings of fact or conclusions
of law.
(2) Within 30 days of the filing of exceptions to the
proposed decision and order, the panel shall either:
(i) issue an order adopting the proposed decision
and order as the final decision and order of the
tribunal; or
(ii) issue an alternative decision and order,
including findings of fact and conclusions of law, as the
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final decision and order of the tribunal.
(d) Record.--The record shall show the ruling on each
finding of fact, conclusion of law or exception presented. All
decisions and orders, including proposed decisions and orders,
are a part of the record and shall include a statement of:
(1) Findings and conclusions, and the reasons or basis
for the findings and conclusions, on all material issues of
fact, law or discretion presented on the record.
(2) The appropriate rule, order, relief or denial
thereof.
(e) Decision final.--A final decision and order shall
finally decide the matters in controversy unless any party to
the matter timely appeals the decision as provided for in
section 2817.
(f) Effect.--A final decision and order shall have the same
effect and shall be enforced in the same manner as a judgment of
any court of competent jurisdiction.
Section 2816. Small claims division.
(a) Establishment.--There is hereby established a small
claims division of the tribunal.
(b) Judge to preside.--An administrative law judge assigned
by the chief administrative law judge as provided in section
2802 shall preside over proceedings within the jurisdiction of
the small claims division.
(c) Amounts in controversy.--If the taxpayer elects in its
petition for review filed pursuant to Article XXVII, the small
claims division shall have jurisdiction over any proceeding with
respect to any calendar year for which the net amount of the tax
deficiencies and claimed refunds in controversy does not exceed
$25,000, exclusive of interest and penalties.
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(d) Jurisdiction.--If the taxpayer elects in its petition
for review filed pursuant to Article XXVII and the department
agrees in its answer to the taxpayer's petition, the small
claims division shall have jurisdiction over any proceeding
regardless of the amount in controversy.
(e) Answer.--No later than 30 days after receipt of notice
that the taxpayer has filed a petition in proper form or at
other times as the tribunal may order, the department shall file
with the tribunal an answer similar to that required by section
2807.
(f) Withdrawal.--At any time prior to entry of judgment, a
taxpayer may withdraw a proceeding in the small claims division
by notifying the chief clerk of the tribunal in writing. A
withdrawal shall be with prejudice and shall not have the effect
of revoking the election to proceed in the small claims
division.
(g) Hearings informal.--Hearings in the small claims
division shall be informal, and the judge may receive evidence
as the judge deems appropriate for determination of the case.
Testimony shall be given under oath or affirmation.
(h) Time frame.--The presiding judge shall issue a final
decision and order, including findings of fact and conclusions
of law, within 90 days after the closing of the record.
(i) Record.--The record shall show the ruling on each
finding of fact and conclusion of law. All decisions and orders
are a part of the record and shall include a statement of:
(1) Findings and conclusions, and the reasons or basis
for the findings and conclusions, on all material issues of
fact, law or discretion presented on the record.
(2) The appropriate rule, order, relief or denial
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thereof.
(j) Decision final.--A final decision and order of the small
claims division shall be conclusive upon all parties and may not
be appealed. A decision and order of the small claims division
shall not be considered as precedent in any other case, hearing
or proceeding.
(k) Inapplicability.--Sections 2815, 2818, 2819 and this
section shall not apply to proceedings in the small claims
division.
Section 2817. Appeals.
(a) Individual review.--The taxpayer or the department shall
be entitled to judicial review of a final decision of the
tribunal, except a final decision of the small claims division,
in accordance with Pa.R.A.P. Ch. 15 (relating to judicial review
of governmental determinations).
(b) Review of interlocutory decision.--The taxpayer or the
department may obtain judicial review of an interlocutory
decision of the tribunal by filing a petition as provided in
Pa.R.A.P. Ch. 13 (relating to interlocutory appeals by
petition).
(c) Record.--The record on judicial review shall include the
decision and order of the tribunal, the stenographic transcript
of the hearing before the tribunal, the pleadings, exhibits,
documents and other items admitted into evidence.
Section 2818. Representation.
(a) Taxpayer.--Appearances in proceedings conducted by the
tribunal may be by the taxpayer or by an attorney admitted to
practice in this Commonwealth. Parties may also be represented
by an attorney who is a member of or is employed by an
accounting or other professional services firm, by an accountant
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licensed in this Commonwealth or by an enrolled agent authorized
to practice before the Internal Revenue Service provided the
representation does not constitute the unauthorized practice of
law as determined by the Supreme Court of this Commonwealth.
(b) Department.--The department shall be represented by its
authorized representative in all proceedings before the
tribunal.
Section 2819. Publication of decisions.
Except for decisions issued by the small claims division, the
chief clerk shall cause the final decisions of the tribunal to
be indexed and published in print or electronic format as it
deems best adapted for public convenience. Publications shall be
made permanently available and constitute the official reports
of the tribunal.
Section 2820. Service of process.
(a) Personal service.--The mailing by first class mail,
postage prepaid, to the address of the taxpayer, as given on the
taxpayer's petition, or to the address of the taxpayer's
representative of record, if any, or to the usual place of
business of the department, or its representative of record,
shall constitute personal service on the other party. The
tribunal may by rule prescribe that notice by other means shall
constitute personal service and may in any individual case order
that notice be given to additional persons or by other means.
(b) Date.--Mailing by registered or certified mail and
delivery by a private delivery service approved by the Internal
Revenue Service in accordance with section 7502(f) of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
7502(f)), of any pleading, decision, order, notice or other
document in respect to proceedings before the tribunal shall be
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deemed to have occurred on the date of mailing or the date of
submission to the private delivery service.
Section 2821. Code of ethics.
(a) General rule.--The administrative law judges and the
officers and employees of the tribunal shall conform to the
following code of ethics. An administrative law judge, officer
or employee of the tribunal must:
(1) Avoid impropriety and the appearance of impropriety
in all activities.
(2) Perform all duties impartially and diligently.
(3) Not participate in any ex parte communications
regarding matters before the tribunal.
(4) Abstain publicly from expressing, other than in
public session, personal views on the merits of a matter
pending before the tribunal.
(5) Observe the standards of fidelity and diligence that
apply to the position of judge, office or employee.
(6) Disqualify himself from proceedings in which
impartiality might be reasonably questioned.
(7) Regulate extracurricular activities to minimize the
risk of conflict with official duties. An administrative law
judge, officer or employee of the tribunal may speak, write
or lecture, and any reimbursed expenses, honoraria, royalties
or other money received in connection therewith shall be
disclosed annually. Disclosure statements shall be filed with
the executive administrator of the tribunal and shall be open
to public inspection during the normal business hours of the
tribunal during the tenure of the administrative law judge,
officer or employee.
(8) Conform to additional rules as the tribunal may
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prescribe.
(b) Ex parte communications.--Ex parte communications
prohibited in this section shall mean any off-the-record
communications to or by any administrative law judge, officer or
employee of the tribunal regarding the merits or any fact in
issue of any matter pending before the tribunal.
(c) Removal for violation.--An administrative law judge,
officer or employee of the tribunal who violates the provisions
of subsection (a) shall be subject to removal from office after
notice and an opportunity to be heard.
(d) Construction.-- Nothing in this act shall be interpreted
to prohibit the administrative law judges, officers and
employees of the tribunal from serving in the Pennsylvania
National Guard and the reserves of the armed forces of the
United States while appointed to or employed by the tribunal.
Section 2822. Rules and forms.
The tribunal is authorized to promulgate and adopt all
reasonable regulations and forms as necessary or appropriate to
carry out the intent and purposes of this article.
Section 2823. Application of rules of administrative practice
and procedure.
Except where inconsistent with this article and the
regulations adopted by the tribunal, all actions and proceedings
before the tribunal are subject to 2 Pa.C.S. Ch. 5 Subch. A
(relating to practice and procedure of Commonwealth agencies)
and Ch. 7 Subch. A (relating to judicial review of Commonwealth
agency action) and 1 Pa. Code Pt. II (relating to general rules
of administrative practice and procedure).
Section 8. This act shall take effect immediately.
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