HB 542 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in sales and use tax, further providing for definitions, for imposition of tax and for exclusions from tax, providing for marketplace providers and marketplace sellers and further providing for remote sales reports; in personal income tax, providing for the Pennsylvania ABLE Savings Program Tax Exemption, repealing provisions relating to contribution for Korea/Vietnam Memorial National Education Center, further providing for operational provisions, providing for definitions, further providing for requirement of withholding tax, providing for withholding tax requirement for non-employer payors, further providing for information statement, providing for information statement for non-employer payors and for information statement for payees, further providing for time for filing withholding returns, providing for time for filing payors' returns, further providing for payment of taxes withheld, providing for payment of taxes withheld for non-employer payors, further providing for liability for withheld taxes, providing for payor's liability for withheld taxes and for payor's failure to withhold, further providing for amount of withholding tax and for treatment of nonresident partners, members or shareholders, providing for withholding on income and for annual withholding statement and further providing for requirements concerning returns, notices, records and statements and for additions, penalties and fees; in corporate net income tax, further providing for definitions and providing for qualified manufacturing innovation and reinvestment deduction; in realty transfer tax, further providing for definitions and for exempt parties; providing for tax credit eligibility; in entertainment production tax credit, further providing for definitions and for credit for qualified film production expenses, providing for film production tax credit districts and establishing the Entertainment Economic Enhancement Program; in city revitalization and improvement zones, further providing for certifications, for restrictions and for transfer of property; in neighborhood improvement zones, providing for transfer of property; in keystone opportunity zones, keystone opportunity expansion zones and keystone opportunity improvement zones, further providing for additional keystone opportunity zones; in inheritance tax, further providing for timely mailing treated as timely filing and payment; in Public Transportation Assistance Fund, further providing for fund; providing for fireworks; in procedure and administration, further providing for petition for reassessment and for review by board; providing for tobacco master settlement payment revenue bonds and sale of revenue; making related repeals; and making editorial changes.

PRIOR PRINTER'S NO.

568 PRINTER'STHE NO.GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

1563 THE GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

COSTA, FEBRUARY 17, 2017 ASREFERRED REPORTEDTO FROM COMMITTEE ON FINANCE, HOUSEFEBRUARY OF17, REPRESENTATIVES, AS AMENDED, APRIL 25, 2017 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 imposingimposingg taxes thereon;

providing procedures for the payment, forcollection, taxadministration creditsand inenforcement certainthereof; cases;

conferringproviding powersfor andvidingtax imposingcredits dutiesin upon the Department of Revenue, certain employers,cases; fiduciaries, individuals, persons, corporations and other entities;

conferring powers and imposing duties upon the Department of Revenue, certain employers, fiduciaries, individuals, persons, corporations and other entities;

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 DEFINITIONS AND PROVIDING FOR NOTICE REQUIREMENTS FOR REMOTE SELLERS.

The act of March 4, 1971 (P.L.6, No.2), known as <-- the Tax Reform Code of 1971, is amended by adding a section to read:

SECTIONSection 1.2.

SECTION 201 OF THE ACT OF MARCH 4, 1971 (P.L.6, <-- NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, IS AMENDED BY ADDING A CLAUSE TO READ:

SECTION 201.

DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND PHRASES WHEN USED IN THIS ARTICLE II SHALL HAVE THE MEANING ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT CLEARLY INDICATES A DIFFERENT MEANING:

* * * (EEE) "REMOTE SELLER." A VENDOR LOCATED OUTSIDE THIS COMMONWEALTH THAT SELLS TANGIBLE PERSONAL PROPERTY OR SERVICES THAT ARE NOT EXEMPT FROM THE TAX IMPOSED UNDER THIS ARTICLE TO A 20170HB0542PN1563 - 2 - PURCHASER IN THIS COMMONWEALTH BUT DOES NOT COLLECT THE TAX.

SECTION 2.

THE ACT IS AMENDED BY ADDING A SECTION TO READ:

SECTION 248.7.

NOTICE REQUIREMENTS FOR REMOTE SELLERS.--(A) A REMOTE SELLER MAKING A SALE IN THIS COMMONWEALTH SHALL NOTIFY THE PURCHASER THAT SALES OR USE TAX IS DUE ON THE NONEXEMPT PURCHASE AND THAT THE COMMONWEALTH REQUIRES THE PURCHASER TO PAY THE TAX DUE ON THE PURCHASER'S TAX RETURN.

FAILURE TO PROVIDE THE NOTICE REQUIRED UNDER THIS SUBSECTION SHALL SUBJECT THE REMOTE SELLER TO A PENALTY OF FIVE DOLLARS ($5.00) FOR EACH FAILURE, UNLESS THE REMOTE SELLER SHOWS REASONABLE CAUSE FOR THE FAILURE.

(B) ON OR BEFORE JANUARY 31 OF EACH YEAR, A REMOTE SELLER SHALL SEND NOTICE TO EACH PURCHASER IN THIS COMMONWEALTH WHO MADE FIVE HUNDRED DOLLARS ($500.00) OR MORE OF PURCHASES FROM THE REMOTE SELLER IN THE PREVIOUS CALENDAR YEAR.

THE NOTICE SHALL INCLUDE ALL OF THE FOLLOWING:

(1) THE TOTAL AMOUNT PAID BY THE PURCHASER FOR PURCHASES MADE FROM THE REMOTE SELLER IN THE PREVIOUS CALENDAR YEAR.

(2) A STATEMENT THAT THE COMMONWEALTH REQUIRES A SALES OR USE TAX RETURN TO BE FILED AND SALES OR USE TAX TO BE PAID ON NONEXEMPT PURCHASES MADE BY THE PURCHASER FROM THE REMOTE SELLER.

(3) ANY INFORMATION REQUIRED BY THE DEPARTMENT BY RULE.

THE NOTICE SHALL BE SENT SEPARATELY BY FIRST-CLASS MAIL OR ELECTRONIC MAIL AND MAY NOT BE INCLUDED WITH ANY OTHER SHIPMENTS.

THE NOTICE SHALL INCLUDE THE NAME OF THE REMOTE SELLER AND THE WORDS "IMPORTANT TAX DOCUMENT ENCLOSED" ON THE EXTERIOR OF THE MAILING.

FAILURE TO SEND THE NOTICE REQUIRED UNDER THIS SUBSECTION SHALL SUBJECT THE REMOTE SELLER TO A PENALTY OF TEN DOLLARS ($10.00) FOR EACH FAILURE, UNLESS THE 20170HB0542PN1563 - 3 - REMOTE SELLER SHOWS REASONABLE CAUSE FOR THE FAILURE.

(C) THE DEPARTMENT IS AUTHORIZED TO ADOPT RULES AND PROCEDURES AND CREATE FORMS NECESSARY TO IMPLEMENT THIS SECTION.

Section 2 3.

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