HB 959 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for refund or credit of overpayment and providing for interest on refund or credit of overpayments; in general provisions, providing for interest on taxes due the Commonwealth and for interest on overpayments; and making repeals.

Bill Text

• Printer's No. PN1033 View text Current pdf

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The bill amends the Tax Reform Code of 1971 to provide for interest on tax overpayments and establish guidelines for interest on taxes due to the Commonwealth.

• Section 346

  [(b) The department is authorized to prescribe regulations providing for the crediting against the estimated tax for any taxable year of the amount determined to be an overpayment of the tax for a preceding taxable year.]

  This removes an obsolete provision regarding regulations for crediting overpayments.

• Section 346.1. Interest on Refund or Credit of Overpayments.--Any tax paid by a taxpayer under this article determined to be an overpayment shall be awarded interest in accordance with Article XXX.

  This creates a new section ensuring that overpayments will accrue interest.

• Section 3003.26. Interest on Taxes Due the Commonwealth.--(a) All taxes due the Commonwealth shall bear simple interest from the date the taxes become due and payable until paid.

  This establishes that taxes due will accrue simple interest until paid.

• Section 3003.27. Interest on Overpayments.--(a) Simple interest shall be allowed and paid by the Commonwealth upon an overpayment to the Commonwealth of any tax.

  This introduces a new section mandating interest to be paid on tax overpayments.

• The interest shall be allowed and paid for the period during which the Commonwealth retained the overpayment, beginning with the date of the overpayment.

  This specifies the duration for which interest is applicable on overpayments.

• Interest on overpayments shall be allowed and paid at the rate as is prescribed for underpayments under section 346.1 less two per cent.

  This defines the interest rate for overpayments as lower than the rate for underpayments.

• Interest on overpayments shall be allowed and paid as follows: (1) In the case of a cash refund, from the date of the overpayment to a date preceding the date of the Commonwealth's refund check by not more than thirty days.

  This outlines the specifics of how and when interest on overpayments will be calculated.

• Interest on overpayment shall not be allowed or paid if a taxpayer indicates an intent to carry forward a refund or credit to be applied in a succeeding taxable year.

  This prohibits interest accumulation on overpayments if the taxpayer chooses to carry the amount forward.

• The Fiscal Code

  Sections 806 and 806.1 of the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, are repealed.

  This repeals outdated sections of The Fiscal Code in order to effectuate the new provisions.

• A reference in any other act to former section 806 or 806.1 of the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, shall be deemed to be a reference to section 3003.26 or 3003.27.

  This ensures that references to repealed sections point to the new sections dealing with interests.

Action History

1. March 18, 2025

   Referred to Finance

Sponsors

• Seth Grove · Cosponsor
• Barbara Gleim · Primary
• Joe Hamm · Cosponsor
• Milou Mackenzie · Cosponsor
• Rob W. Kauffman · Cosponsor
• David H. Rowe · Cosponsor
• David H. Zimmerman · Cosponsor
• Wendy Fink · Cosponsor

Subjects