Pennsylvania Bestows Amnesty Upon Delinquent Taxpayers

Dusty Elias Kirk |  kirkd@pepperlaw.com
Karissa L. Schepis | schepisk@pepperlaw.com

On October 9, 2009, Pennsylvania enacted Act 48 of 2009, which established the Pennsylvania Tax Amnesty Program to provide relief to taxpayers with state taxes delinquent through June 30, 2009. Under the program, the Pennsylvania Department of Revenue will waive penalties and half of the outstanding interest on delinquent taxes paid during an amnesty period between April 26, 2010 and June 18, 2010. All taxes administered by the department are eligible for the program (except that under the International Fuel Tax Agreement, only tax owed to the commonwealth is eligible). Although participation in the program does not come without concessions on the taxpayers' part, it provides an opportunity for taxpayers to avoid substantial costs while encouraging collections to aid the strained state budget.

An important provision for the real estate arena is that delinquent real estate transfer taxes are eligible for the program's benefits. Pennsylvania imposes a tax of 1 percent on the value of real estate (including contracted-for improvements) transferred by deed, instrument, long-term lease or other writing in Pennsylvania. Both the transferor and transferee are held jointly and severally liable for payment of the tax.

Under the program, the department will provide amnesty to taxpayers (individuals, businesses and other entities) that owe delinquent transfer taxes incurred during the period from 1955 through June 30, 2009. As all penalties and half of the outstanding interest will be waived if transfer taxes are paid during the amnesty period, those with delinquent taxes, whether or not they have previously reported the liability to the department, stand to realize significant savings if the full amount of the liability is paid during the amnesty period. However, eligible taxpayers who do not opt to take advantage of the amnesty program will be penalized for non-participation.

The department recently issued guidance on the program that clarifies its substantive and procedural requirements, an overview of which follows.

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Recovery Zone Facility Bonds May Offer Low-Cost Financing for Development

Gordon R. Downing |  downingg@pepperlaw.com 

Time is running out quickly for the use of Recovery Zone Facility Bonds (RZFBs), a new type of tax-exempt bond that benefits private companies and is authorized by the American Recovery and Reinvestment Act of 2009 (ARRA).

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Pepper Partners Speaking at Real Estate Seminar - January 27, 2010

On Wednesday, January 27, Pepper Hamilton will host a Commercial Real Estate for Women (CREW) Lunch 'N Learn on Tax Assessment Appeals in our Pittsburgh office.

Pepper real estate partners, Dusty Elias Kirk and Sharon F. DiPaolo , will lead the discussion on the current state of Allegheny County's real estate property tax assessment system. Participants will leave with an understanding of the Court of Common Pleas ruling in Clifton v. Allegheny County, which challenged the constitutionality of a "base year" property tax system and the subsequent Pennsylvania Supreme Court decision and legislative actions which could have statewide implications for pending and future tax assessment appeals.