HB 1694 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for tax amnesty program for fiscal year 2025-2026.

PRINTER'S NO.   2084

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1694
                                                  Session of
                                                    2025

     INTRODUCED BY CEPEDA-FREYTIZ, HILL-EVANS, SANCHEZ, MAYES,
        HADDOCK, T. DAVIS, D. WILLIAMS, NEILSON, HOHENSTEIN AND
        BELLMON, JULY 2, 2025

     REFERRED TO COMMITTEE ON FINANCE, JULY 7, 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," providing for tax amnesty program for fiscal year
11      2025-2026.
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 an article to
16   read:
17                               ARTICLE XXIX-J
18            TAX AMNESTY PROGRAM FOR FISCAL YEAR 2025-2026
19   Section 2901-J.    Definitions.
20      The following words and phrases when used in this article
21   shall have the meanings given to them in this section unless the
22   context clearly indicates otherwise:
 1      "Amnesty period."     The time period of 90 consecutive days
 2   established by the Governor ending no later than June 30, 2026.
 3      "Department."     The Department of Revenue of the Commonwealth.
 4      "Eligible tax."     As follows:
 5          (1)   A tax administered by the department under this act
 6      that became delinquent during a taxable period.
 7          (2)   The term includes any interest, penalty or fee on an
 8      eligible tax.
 9          (3)   For an unknown liability, the term only includes
10      taxes due during a taxable period.
11          (4)   For purposes of taxes collected under the
12      International Fuel Tax Agreement, the term applies only to
13      taxes, interest and penalties owed to the Commonwealth, not
14      to other states or Canadian provinces.
15      "Program."      The tax amnesty program established under section
16   2902-J as provided for in this article.
17      "Taxable period."     A taxable year beginning after December
18   31, 2019, and ending no later than December 31, 2024.
19      "Taxpayer."      As follows:
20          (1)   A person, association, fiduciary, partnership,
21      corporation or other entity required to pay or collect any of
22      the eligible taxes.
23          (2)   The term does not include a taxpayer that:
24                (i)    prior to the amnesty period, has received notice
25          that the taxpayer is the subject of a criminal
26          investigation for an alleged violation of any law
27          imposing an eligible tax;
28                (ii)    prior to the amnesty period, has been named as
29          a defendant in a criminal complaint alleging a violation
30          of any law imposing an eligible tax; or

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 1                   (iii)    is a defendant in a pending criminal action
 2            for an alleged violation of any law imposing an eligible
 3            tax.
 4      "Unknown liability."         A liability for an eligible tax for
 5   which:
 6            (1)    a return or report has not been filed, a payment has
 7      not been made and the taxpayer has not been contacted by the
 8      department concerning the unfiled returns or reports or
 9      unpaid tax; or
10            (2)    a return or report has been filed, the tax was
11      underreported and the taxpayer has not been contacted by the
12      department concerning the underreported tax and is not
13      already under audit when the amnesty period begins.
14   Section 2902-J.         Establishment of program.
15      (a)   Establishment and administration.--Subject to sections
16   2902-F(c) and 2902-G(c), a tax amnesty program is established
17   and shall be administered by the department.
18      (b)   Applicability.--Subject to sections 2902-F(c) and 2902-
19   G(c), the program shall apply to a taxpayer that became
20   delinquent on payment of a liability for an eligible tax during
21   a taxable period, including a liability for returns not filed,
22   liabilities according to records of the department during a
23   taxable period, liabilities not reported, underreported or not
24   established, but delinquent during a taxable period.
25      (c)   Future amnesty program participation.--A taxpayer that
26   participates in the program shall not be eligible to participate
27   in a future tax amnesty program.
28      (d)   Deferred payment plan agreement.--An existing deferred
29   payment plan agreement between a taxpayer and the department
30   where the agreement applies to a tax liability for which amnesty

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 1   is sought by the taxpayer for amounts remaining on the tax
 2   liability, the taxpayer, as a condition of receiving amnesty,
 3   shall pay the liability, notwithstanding terms of the agreement
 4   to the contrary, in full during the amnesty period.
 5   Section 2903-J.        Required payment.
 6      (a)   Taxpayer requirements.--Subject to section 2904-J, each
 7   taxpayer that participates in the program shall comply with all
 8   of the following:
 9            (1)    During the amnesty period:
10                   (i)    File a tax amnesty return, in the form and
11            manner prescribed by the department, which contains the
12            information that the department requires. A tax amnesty
13            return shall be considered to be timely filed if, during
14            the amnesty period, the tax amnesty return is postmarked
15            or filed electronically or otherwise.
16                   (ii)    Make payment of all taxes due to the
17            Commonwealth in accordance with the tax amnesty return
18            that is filed. The taxpayer shall not be required to pay
19            any penalty, interest or fee applicable to an eligible
20            tax.
21            (2)    As applicable, file:
22                   (i)    Complete tax returns for all required years for
23            which the taxpayer previously has not filed a tax return.
24                   (ii)    Complete amended tax returns for all required
25            years for which the taxpayer underreported eligible tax
26            liability.
27      (b)   Prohibitions.--
28            (1)    The department may not collect any penalty, interest
29      or fee waived under subsection (a)(2).
30            (2)    Except as otherwise provided in this article, the

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 1      department may not pursue administrative or judicial
 2      proceeding against a taxpayer with respect to an eligible tax
 3      that is disclosed on a tax amnesty return.
 4      (c)   Refund.--A taxpayer shall not be owed a refund under
 5   this article.
 6   Section 2904-J.       Amnesty contingent on continued compliance.
 7      The department may assess and collect from a taxpayer granted
 8   amnesty under this article all penalties and interest waived
 9   through the program if, within two years after the end of the
10   program, either of the following occurs:
11            (1)   The taxpayer:
12                  (i)    becomes delinquent for three consecutive periods
13            in payment of taxes due or filing of returns required on
14            a semimonthly, monthly, quarterly or other basis; and
15                  (ii)   has not contested the tax liability through a
16            timely valid administrative or judicial appeal.
17            (2)   The taxpayer:
18                  (i)    becomes delinquent and is eight or more months
19            late in payment of taxes due or filing of returns on an
20            annual basis; and
21                  (ii)   has not contested the tax liability through a
22            timely valid administrative or judicial appeal.
23   Section 2905-J.       Limitation of deficiency assessment.
24      If, subsequent to the amnesty period, the department issues a
25   deficiency assessment with respect to a tax amnesty return, the
26   department may impose penalties and pursue a criminal action
27   only with respect to the difference between the amount shown on
28   that tax amnesty return and the current amount of tax.
29   Section 2906-J.       Overpayment of tax.
30      If an overpayment of eligible tax is refunded or credited

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 1   within 180 days after the tax amnesty return is filed or the
 2   eligible tax is paid, whichever is later, interest shall not be
 3   allowed on the overpayment.
 4   Section 2907-J.     Previously paid interest and penalties.
 5      A refund or credit shall not be allowed for any interest or
 6   penalty on eligible taxes paid to the department prior to the
 7   amnesty period.
 8   Section 2908-J.     Proceedings relating to tax amnesty return
 9                  barred.
10      Participation in the program shall be conditioned upon the
11   taxpayer's agreement that the right to protest or pursue an
12   administrative or judicial proceeding with regard to tax amnesty
13   returns filed under the program or to claim a refund of money
14   paid under the program is barred.
15   Section 2909-J.     Undisclosed liabilities.
16      Nothing in this article shall be construed to prohibit the
17   department from instituting civil or criminal proceedings
18   against a taxpayer with respect to an amount of tax that is not
19   disclosed on the tax amnesty return or an amount disclosed on
20   the amnesty return that is not paid.
21   Section 2910-J.     Duties of department.
22      (a)   Guidelines.--
23            (1)   The department shall develop guidelines to implement
24      and administer the provisions of this article.
25            (2)   Within 60 days of the effective date of this
26      paragraph, the department shall transmit notice of the
27      development of the guidelines under this subsection to the
28      Legislative Reference Bureau for publication in the next
29      available issue of the Pennsylvania Bulletin, which must
30      contain the following:

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 1                  (i)    An explanation of the program and the
 2            requirements for eligibility for the program.
 3                  (ii)    The dates during which a tax amnesty return may
 4            be filed.
 5                  (iii)    A specimen copy of the tax amnesty return.
 6                  (iv)    The amnesty revenue estimates required under
 7            section 2912-J(b).
 8      (b)   Publicity.--The department shall publicize the program
 9   to maximize public awareness of and participation in the
10   program. The department shall coordinate to the highest degree
11   possible its publicity efforts and other actions taken to
12   implement this article.
13      (c)   Reports.--The department shall issue reports to the
14   General Assembly detailing program implementation. The reports
15   shall contain the following information:
16            (1)   Within 30 days after the end of the amnesty period:
17                  (i)    A detailed breakdown of the department's
18            administrative costs in implementing the program.
19                  (ii)    The total dollar amount of revenue collected
20            under the program.
21            (2)   Within 180 days after the end of the amnesty period:
22                  (i)    The number of tax amnesty returns filed and a
23            breakdown of the number and dollar amount of revenue
24            raised for each tax by calendar year during which the tax
25            period ended. In addition, the gross revenues shall be
26            broken down in the following categories:
27                         (A)   Amounts represented by assessments
28                  receivable established by the department on or before
29                  the first day of the amnesty period.
30                         (B)   All other amounts.

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 1                  (ii)    The total dollar amount of penalties, interest
 2            and fees waived under the program.
 3                  (iii)    The demographic characteristics of tax amnesty
 4            participants, including North American Industry
 5            Classification System codes of participants, type of
 6            taxpayer, consisting of individual, partnership,
 7            corporation or other entity, size of tax liability and
 8            geographical location.
 9      (d)   Notification.--The department shall notify in writing
10   each known tax delinquent, at the last known valid address of
11   the taxpayer, of the existence of the program. The sole purpose
12   of the letter sent by the department to the taxpayer shall be
13   notification of the program.
14   Section 2911-J.        Method of payment.
15      All tax payments under the program shall be made by certified
16   check, money order, electronic transfer, credit card or other
17   financial instrument acceptable to the department.
18   Section 2912-J.        Use of revenue.
19      (a)   Restricted revenue account.--
20            (1)   All revenue generated by this article shall be
21      deposited into a restricted revenue account in the General
22      Fund.
23            (2)   Revenue from the restricted revenue account shall be
24      distributed as follows:
25                  (i)    All money from General Fund sources shall be
26            deposited in the General Fund no later than June 30,
27            2026, less repayment of any costs for administration of
28            the program to the department.
29                  (ii)    All revenue from Motor License Fund sources
30            shall be deposited in the Motor License Fund no later

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 1            than June 30, 2026.
 2                  (iii)    All revenue from Liquid Fuels Tax Fund sources
 3            shall be deposited in the Liquid Fuels Tax Fund no later
 4            than June 30, 2026.
 5      (b)   Revenue estimates.--
 6            (1)   The department shall transmit to the Legislative
 7      Reference Bureau for publication in the next available issue
 8      of the Pennsylvania Bulletin:
 9                  (i)    A separate amnesty revenue estimate for revenue
10            generated under this article from the following sources:
11                         (A)   The General Fund.
12                         (B)   The Motor License Fund.
13                         (C)   The Liquid Fuels Tax Fund.
14                  (ii)    The methodology used to develop the estimate.
15            (2)   All amnesty revenue estimates shall be submitted for
16      publication in accordance with section 2910-J(a)(2)(iv).
17   Section 2913-J.        Additional penalty.
18      (a)   General rule.--Subject to the limitations provided under
19   subsection (b), a penalty of 5% of the unpaid tax liability and
20   penalties and interest shall be levied against a taxpayer
21   subject to an eligible tax if the taxpayer failed to remit an
22   eligible tax due or had an unreported or underreported liability
23   for an eligible tax on or after the first day following the end
24   of the amnesty period.
25      (b)   Nonapplicability.--The penalty provided in this section
26   shall not apply to a taxpayer that:
27            (1)   pays the liability in full or entered into a duly
28      approved and executed deferred payment plan on or before the
29      last day of the amnesty period; or
30            (2)   has filed a timely and valid administrative or

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 1      judicial appeal contesting the liability on or before the
 2      last day of the amnesty period.
 3      (c)   Penalty in addition.--The penalty provided by this
 4   section shall be in addition to other penalties provided by law.
 5   Section 2914-J.    Construction.
 6      Except as expressly provided in this article, this article
 7   shall not:
 8            (1)   Be construed to relieve a person, corporation or
 9      other entity from the filing of a return or from a tax,
10      penalty or interest imposed by the provisions of any law.
11            (2)   Affect or terminate a petition, investigation,
12      prosecution, legal or otherwise, or other proceeding pending
13      under the provisions of any law.
14            (3)   Prevent the commencement or further prosecution of a
15      proceeding by the proper authorities of the Commonwealth for
16      violation of any law or for the assessment, settlement,
17      collection or recovery of tax, penalty or interest due to the
18      Commonwealth under any law.
19   Section 2915-J.    Suspension of inconsistent acts.
20      All acts or parts of acts inconsistent with the provisions of
21   this article are suspended to the extent necessary to carry out
22   the provisions of this article.
23      Section 2.     This act shall take effect immediately.




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