PSTAP/DOR Annual Meeting Agenda TY 2016 Form Changes 2017 Tax - - PowerPoint PPT Presentation

2016 PSTAP/DOR Annual Meeting

Agenda

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 TY 2016 Form Changes  2017 Tax Amnesty  Modernization Initiatives  E-Statement of Account  Questions & Answer Session

Recent Form Changes

Corporation Tax Forms

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• Revised Tax Forms for 2016
• RCT 101
• RCT 128
• Only one tax being reported
• Both forms are tax year specific
• Prevent filing the wrong form for TY prior to

2016

• New addback and credit lines added

RCT 101 - Page #1

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• Step B: New Checkboxes
• Royalty/Related Interest

Addback (Act 52 of 2013)

• S-Corp Taxable Built-in Gains
• Step C:
• Added address information for

foreign corporations to report special items that don’t “fit” the “normal” address.

• Step D:
• Revised to only reflect the CNI

Tax figures

RCT 101 - Page #2

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Similar to the old page #3

• Sect A:

Bonus Depreciation

• Sect B:

PA Corporate Net Income Tax

• Sch C-1: Apportionment

Sch.

RCT 101 - Page #3 & 4

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• Same information as the previous pgs #5 – 6
• Bulk Sale Clearance and Tax Preparer areas include the new

address information for foreign corporations

BIT Forms and Instructions Changes

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• PA-40 Form -- No Changes for 2016
• PA-40 Schedules E, J, T and O—Added line

numbers and column references

• PA-40 Schedule T – Revised Header and

Line 2 instructions

• PA-40 Schedule OC -- Added new credit
• PA-40 Schedule F – Revised home office

deduction and use tax instructions

BIT Forms and Instructions Changes

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• REV-276—Revised PA-41 extension period
• PA-40 Schedule SP -- Part C, Line 5, Gifts,

awards and prizes

• PA-40 Schedules A, B, D, E, J, O, SP, T, UE

and W-2s—Line-by-Line instructions developed

• PA-41 Form – No changes for 2016
• PA-41 Schedule A – Revised Line 14

instructions

BIT Forms and Instructions Changes

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• No PA-1000 Form or Schedules

Changes for 2016

REV-717 Form Changes

REV-717 Retailers’ Information Guide Changes

11

Sales Tax Vendor Discount

The vendor discount for licensees for timely filed returns and payments has been limited to the lesser of:

• $25 or 1% of the tax collected for a

monthly filer

• $75 or 1% for a quarterly filer
• $150 or 1% for a semi -annual filer

12

Electronically or Digitally Delivered Items

Sales and use tax extended to items delivered to a customer electronically or digitally or by streaming. This includes music or any other audio, video such as movies and streaming services, e-books and any otherwise taxable printed matter, apps and in-app purchases, ringtones,

• nline

games, and canned software, as well as any updates, maintenance or support of these items.

13

E-911 Fee

The E-911 Surcharge is a fee collected by retailers on each prepaid wireless telephone

• r prepaid telecommunication service sold.

The fee increased to $1.65 per retail

• transaction. The surcharge is charged and

collected by the retailer in addition to any

• ther charges or fees but is not to be

included when calculating sales tax.

14

E-911 Discount

The discount available to retailers that timely remit pre-paid e-911 surcharge returns and payments is 1.5 percent. This discount is separate from the timely remitting of sales tax returns and payments and will automatically be calculated by the

• department. Both discounts are applicable
• nly if the return is filed and payment in full

is made on or before the sales tax due date.

15

Monthly Prepayment Obligations

Sales and use tax licensees whose actual tax liability for the third calendar quarter of the preceding year is $25,000 but less than $100,000 must pay 50 percent of the tax liability for the same month of the previous year or remit at least 50 percent of the actual tax liability required to be reported for the same month in the current year.

16

Monthly Prepayment Obligations

Businesses remitting $100,000 or more for the third calendar quarter of the preceding year must remit 50 percent of the tax liability due for the same month of the previous

• year. Prepayments are due by the 20th of

the current month, and returns for the period are due on or by the 20th of the subsequent month. .

17

Wine Sold for Off Premises Consumption

Act 39 created a wine expanded permit (WEP) for restaurant and hotel licensees. This permit allows it holders to sell wine for

• ff-premises consumption

A maximum of 3,000ml (3 liters) can be sold in a single transaction.

18

Wine Sold for Off Premises Consumption

Holders must pay sales tax on purchases made from PLCB at the time of purchase and are required to collect the tax from the consumer purchasing the wine-to-go. WEP holders may recover the tax paid on the original purchase price when filing their Sales, Use, and Hotel Occupancy Tax Return with the Pennsylvania Department of Revenue.

19

Wine Sold for Off Premises Consumption

A licensee may claim a “Taxes Paid – Purchases Resold” (TPPR) credit on a sales tax return within three years of a purchase that is resold and should keep documentation supporting the TPPR credits for at least three years from the date the return is filed.

20

Tax Amnesty

2017 TAX AMNESTY PROGRAM

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 Pennsylvania authorized (under Act 84 of 2016) a 60-day PA Tax Amnesty program  April 21, 2017 through June 19, 2017  100% of penalties and half of the interest will be waived  Legislative initiative intended to provide $100 million to the General Fund.  Last tax amnesty was in 2010

2017 TAX AMNESTY PROGRAM

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 The overwhelming majority of taxpayers pay their state taxes on time.  Pa Tax Amnesty is an opportunity for the rest to pay back taxes and for taxpayers with delinquencies unknown to the Department of Revenue to come forward.

ELIGIBLE TAXES

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 All taxes administered by the department are eligible.  More than 30 taxes in all, including:

 Corporate net income tax  Personal income tax  Capital stock/foreign franchise tax  Inheritance tax  Sales and use tax  Cigarette tax  Employer withholding tax

ELIGIBLE DELINQUENCIES

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 Taxes delinquent as of December 31, 2015 are eligible; taxes delinquent after January 1, 2016 are ineligible.

 Example: 2014 is the last PIT return eligible for amnesty.

 Unknown tax delinquencies as of January 1, 2011 must be filed and paid before amnesty ends.  Non-filed periods due before December 31, 2015 must be filed before the amnesty period end.

PARTICIPATION RESTRICTIONS

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 Unemployment compensation (administered by the PA Department of Labor & Industry) or any taxes administered by another state, local government or the IRS are ineligible.  Any taxpayer under criminal investigation, criminal prosecution, or criminal restitution for an alleged violation of tax law is ineligible.  Non-Amnesty eligible non-filed returns (e.g. 2015 personal income tax return must be filed but are not required to be paid to participate in amnesty.  2010 tax amnesty participants are ineligible, but 1996 Tax Amnesty participants are eligible.

PARTICIPATION RESTRICTIONS

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 A taxpayer in bankruptcy is ineligible unless permission is granted by the Bankruptcy Court.  Taxpayers with eligible tax liabilities that are under appeal must withdraw the appeal to participate.  Participants that become delinquent within two years of the program may be required to pay all waived penalties and interest.

CONSEQUENCES OF NONPARTICIPATION

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 Eligible individuals or businesses who do not participate in the 2017 PA Tax Amnesty program to settle back taxes will have:

 a 5 percent non-participation penalty added to delinquencies and;  may face other enforcement actions.

HOW TO APPLY

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 To obtain PA Tax Amnesty, a taxpayer must do the following between April 21 and June 19, 2017:  file an Amnesty application;  file necessary returns, if applicable; and  pay all delinquent taxes and 50 percent

• f the interest due.

NOTIFICATION

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 Letters will be mailed to taxpayers with known tax delinquencies.  Next, phones calls may be made to taxpayers with known tax delinquencies.  Additional information about the notifications will be provided closer to the start of the program.

CONDITIONS TO PARTICIPATE

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 Taxpayers must agree not to protest or petition for a refund of money paid under the PA Tax Amnesty program.  Taxpayers cannot receive refunds of penalty or interest paid prior to the PA Tax Amnesty program.  A taxpayer participating in the 2017 Tax Amnesty program is NOT eligible to participate in any future Tax Amnesty program.

APPEALS

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 To participate in Tax Amnesty, a taxpayer must agree to withdraw an appeal of the eligible liability.  However, not all appeals must be surrendered to qualify for Tax Amnesty.  Only appeals on liabilities for which the taxpayer would like to take advantage

• f Tax Amnesty must be withdrawn.

APPEALS

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 A taxpayer who applies for Tax Amnesty effectively waives all future appeal rights for liabilities paid through the PA Tax Amnesty program.  Taxpayers may appeal denial of amnesty.

MORE INFORMATION

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 The 2017 Tax Amnesty Program guidelines and a Q&A are online at revenue.pa.gov.  Additional information, including on how to apply, will be announced before the program begins.  The Voluntary Disclosure Office will remain

• pen during the 2017 Amnesty Program.

VOLUNTARY DISCLOSURE

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 The Voluntary Disclosure Office will remain

• pen during the 2017 Amnesty Program.

 Under Voluntary Disclosure, if tax and interest is paid, penalties are waived.  Taxpayers should consider whether Voluntary Disclosure or Tax Amnesty is their best option.

MORE INFORMATION

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 The 2017 Tax Amnesty Program guidelines and a Q&A are online at revenue.pa.gov.  Additional information, including on how to apply and payment options, will be announced before the program begins.

2010 TAX AMNESTY

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 The 2010 tax amnesty collected $254.6 million from 59,461 taxpayers.

 PA vs out-of-state  88% of participants were from PA, providing 51% of the revenue.  12% of participants were out-of- state, providing 49% of revenue

2010 TAX AMNESTY

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2010 TAX AMNESTY

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 In the 2010 Tax Amnesty program:

 68% of participants were individuals and small businesses, providing 26%

• f collections.

 21% of participants were larger businesses, providing 71% of collections.

STAY INFORMED

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 Get an e-alert when the PA

Department of Revenue posts press releases, research reports, and/or the PA Tax Update newsletter to its website.  Visit revenue.pa.gov and select News and Statistics

Modernization Initiatives

Modernization Initiatives: BTS Update

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 Significant progress resolving challenges created during the modernization of the Business Tax System (BTS)

 2014: Automated business return processing was nearly at a standstill  2015: Department restructured and made eliminating backlog a top priority  Today:  8 million business tax returns have been processed, including  98% of Business Trust Fund returns  98% of the Corporate Tax returns

Modernization Initiatives: BTS Update

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 New Email Addresses:

 RA-PAnoticeofadjustment@pa.gov: for practitioners to report possible administrative errors.  RA-RVNONFILENOTEREV@pa.gov: for taxpayers who believe a nonfiler notice was sent in error.

 Top 10 BTS Filing Tips: Corporation Taxes

 http://www.revenue.pa.gov/GeneralTaxInformation/Tax %20Types%20and%20Information/Documents/CT_top_ 10_%20tips.pdf

New Modernization Initiatives - TRO

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In response to requests from several businesses and tax practitioners, the Pennsylvania Department of Revenue is pleased to announce the launch of the Tax Registration Office (TRO). This newly established office will:

• Combine business registration functions previously

managed separately by the Bureau of Business Trust Fund Taxes and the Bureau of Corporation Tax into one centralized area

• Streamline internal process
• Improve customer service

For more information contact the office directly at 717 705- 6225 (Corp), menu option 8 for Registration, or 717 783-3653 (Trust Fund).

New Modernization Initiatives

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 The department will soon begin a multi-year modernization of individual taxes, including:

 Personal Income Tax  Inheritance Tax  Realty Transfer Tax  Pass Through Entity Processing  Property Tax / Rent Rebate  International Fuel Tax Agreement (IFTA)  Motor Fuel and Liquid Fuel Taxes

Other Initiatives

Other initiatives

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 Sales Tax Desk Review Unit Launched

• Helps businesses stay up-to-date with sales tax

reporting requirements

• Compares returns with a business’ reported activity

with its sales and use tax return  Electronic filing of liens

• Transitioning from paper files to electronic filing in

Bucks, Cumberland, Montgomery and Philadelphia counties.

• E-filing reduces costs and improves staff efficiency

Electronic Delivery of the Statement of Account in e-TIDES

With the introduction of the e-TIDES Document Center you can now…

Electronically request the e-SOA Electronically receive the e-SOA the next business day in PDF format Benefit from enhanced detail of account status

Electronic Statement of Account

Previously, to receive a Statement of Account:

Business taxpayer

• r tax practitioner

would contact the department and request the SOA The SOA would be printed in hardcopy during

• vernight batch

processing The hardcopy SOA was sent to the business taxpayer

• r tax practitioner

via US Mail

The hardcopy SOA provided summary information for all tax types for which the business was required to file How is the request process changing?

Now, to receive an e-SOA:

Business taxpayer

• r tax practitioner

accesses e-TIDES and requests an e-SOA The e-SOA is available in the Document Center in PDF format the next business day

Now, the e-SOA can be requested for single tax types

• r a combined statement showing all tax types, with

both summary and detailed financial information How is the request process changing?

You can access the help documents for the Document Center and the e-SOA processes by:

– Visiting the Get Assistance section in e-TIDES – Scanning the QR code to the left with your smartphone to link directly to the e-SOA instructional documents

Where can I go for more information?

http://eniesrwda01.state.pa.u s/gm/folder-1.11.96589