HARRISBURG, PA — Pennsylvania’s Senate Finance Committee approved Senate Bill 1051 on Thursday. The move, commended by Pennsylvania Treasurer Stacy Garrity, aims to level the playing field between average taxpayers and the Department of Revenue (DOR).
Showcasing a commitment to taxpayer equality, SB 1051, sponsored by Sen. Scott Hutchinson (R-21), modifies the Act of March 4, 1971. This Act, which outlines Pennsylvania’s stance on tax reform and state taxation, is set for an overdue revamp. The new bill allows the Board of Finance and Revenue (BF&R) to accept late-filed appeals under certain circumstances and establishes a new alternative settlement process, which would replace the formal and lengthy court appeals process.
In the words of Pennsylvania State Treasurer Stacy Garrity, “For me, this legislation boils down to one question. Do you want to create an even playing field for Pennsylvania taxpayers, or do you want to maintain a system that’s tilted in favor of the massive bureaucracy at the Department of Revenue?” A clear answer has been given with the support of SB 1051, paving the way for an optimized tax dispute resolution process that favors taxpayers and not bureaucracy.
Under the traditional system, taxpayers disputing a final decision made by the DOR had a tight 60-day window to appeal to the BF&R. Any delay often resulted in dismissals based on technicalities instead of the case merits – an unfair scenario for taxpayers. SB 1051 offers room for flexibility, authorizing BF&R to accept late-filed applications when justified by the taxpayer, and when not resulting in prejudice for either party.
The bill also introduces the power to create a settlement process, enabling the resolution of tax disputes without requiring a final Board decision – a move that holds the promise of reduced litigation costs for taxpayers. This is a bold stride away from the status quo, where BF&R lacked the authority to direct a settlement process.
This legislative shift is of paramount importance not only for taxpayers but for the BF&R itself. As Treasurer Garrity points out, “Sen. Hutchinson’s legislation will help taxpayers and business owners resolve tax issues more quickly and help BF&R be more efficient by directing resources to more complex appeals.”
With over 4,200 appeals making their way to the BF&R each year, the need for a more efficient, fairest system is evident. Currently, only around 13% of appeals find resolution through settlement before reaching the Commonwealth Court, a figure that SB 1051 could significantly increase.
As it stands, BF&R, an independent administrative tax tribunal, is responsible for the second and final level of administrative appeal, except for minor exceptions. Its board, made up of three members, two appointed by the Governor and confirmed by the Pennsylvania Senate and the third being the State Treasurer or their designee, is tasked with resolving appeals within six months of filing. If they fail, it defaults to upholding the DOR decision.
SB 1051, in reconfiguring the landscape of Pennsylvania’s tax dispute resolution, has received endorsement from various organizations ranging from the Pennsylvania Chamber of Business and Industry and the National Federation of Independent Businesses to accountant societies and enrolled agents.
Alongside these tweaks in the tax dispute resolution process, Rep. Tim Briggs (D-29) introduced a companion bill, House Bill 1994, highlighting a determined and joint effort by Pennsylvania’s legislative bodies to protect taxpayer rights while also ensuring a smooth, fair, and efficient tax system.
The implications of SB 1051 go beyond resolving disputes and aim to fundamentally improve the tax experience for residents and businesses in Pennsylvania. This is a significant step towards a more equitable tax system, one where bureaucracy does not overshadow the rights of hardworking taxpayers.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and Microsoft Start.