HB 1552 — 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, providing for frivolous refund claim.

PRINTER'S NO.   1856

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1552
                                                Session of
                                                  2025

     INTRODUCED BY SIEGEL, JUNE 6, 2025

     REFERRED TO COMMITTEE ON FINANCE, JUNE 9, 2025


                                     AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," in sales and use tax, providing for frivolous
11      refund claim.
12      The General Assembly of the Commonwealth of Pennsylvania
13   hereby enacts as follows:
14      Section 1.    The act of March 4, 1971 (P.L.6, No.2), known as
15   the Tax Reform Code of 1971, is amended by adding a section to
16   read:
17      Section 252.1.     Frivolous Refund Claim.--(a)   If a taxpayer
18   files a claim for refund of tax paid under this article as
19   described in subsection (b), the department shall assess and
20   collect, in addition to other penalties provided by law, a
21   penalty as follows:
22      (1)   Five per centum of the amount of the refund claim if the
23   claim is found to be materially incomplete.
 1      (2)     Ten per centum of the amount of the refund claim that is
 2   found to be duplicative or lacking a reasonable basis in law or
 3   in fact.
 4      (b)     A claim for refund is subject to the penalty under this
 5   section if:
 6      (1)     the claim is incomplete;
 7      (2)     the claim includes a purchase for which an earlier claim
 8   for refund has already been filed;
 9      (3)     the claim, or any part of it, lacks a reasonable basis
10   in law or in fact; or
11      (4)     the taxpayer fails to provide the department with proof
12   the tax for which a refund is claimed was actually paid.
13      (c)     (1)   A claim for refund is incomplete if it does not
14   include the form and substantially all of the pertinent data,
15   information and documentation required by section 2703 and the
16   department's regulations.
17      (2)     Prior to assessing a penalty for a claim for refund due
18   to incompleteness under subsection (b)(1), the department shall
19   notify the taxpayer or the preparer of the claim that the claim
20   appears to be incomplete. The notification shall specify the
21   pertinent data, information and documentation that appears to be
22   missing and shall state that failure to either correct the
23   omission or withdraw the claim for refund within sixty days of
24   the date of the notice, plus any additional time allowed by the
25   department for reasonable cause shown, will result in the
26   assessment and collection of the penalty under subsection (b).
27   Correcting the omission shall require the taxpayer or preparer
28   of the claim to provide the missing data, information and
29   documentation and to demonstrate why the claim is not
30   incomplete.

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 1      (d)   If an application for refund is identified at the time
 2   of filing as a protective claim filed in order to preserve the
 3   right to a refund prior to the expiration of the statute of
 4   limitations, the department shall determine if the claim for
 5   refund is subject to the penalty under this section after the
 6   claim for refund is perfected.
 7      (e)   The department may waive the penalty imposed by this
 8   section if the person against whom the penalty is assessed:
 9      (1)   establishes that a duplicate claim was not intentional
10   and was either minimal or immaterial; or
11      (2)   demonstrates other good cause for waiver of the penalty.
12      (f)   The penalty imposed by this subsection applies only to
13   claims totaling five thousand dollars ($5,000) or more.
14      (g)   The department shall assess and collect the penalty
15   imposed by this section from the taxpayer unless the claim for
16   refund is prepared, in whole or in part, by a person other than
17   the taxpayer, in which case the penalty shall be imposed on that
18   person. The penalty imposed by this section shall be assessed
19   and collected in the manner provided for in Chapter IV.
20      Section 2.   This act shall take effect immediately.




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