Bill Text: PA SB905 | 2009-2010 | Regular Session | Introduced

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Bill Title: Imposing a tax on the extraction of natural gas; providing for natural resource severance tax license, for duties of the Department of Revenue, for tax assessments and tax liens; imposing penalties; providing for service of process, for rulemaking, for cooperation with other governments and for bonds; and making an appropriation.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Introduced - Dead) 2009-06-04 - Referred to FINANCE [SB905 Detail]

Download: Pennsylvania-2009-SB905-Introduced.html

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PRINTER'S NO. 1088
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 905 Session of2009
INTRODUCED BY MUSTO, TARTAGLIONE, HUGHES, STACK AND DINNIMAN, JUNE 4, 2009
REFERRED TO FINANCE, JUNE 4, 2009
AN ACT
Amending Title 72 (Taxation and Fiscal Affairs) of the
Pennsylvania Consolidated Statutes, imposing a tax on the
extraction of natural gas; providing for natural resource
severance tax license, for duties of the Department of
Revenue, for tax assessments and tax liens; imposing
penalties; providing for service of process, for rulemaking,
for cooperation with other governments and for bonds; and
making an appropriation.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 72 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 15
SEVERANCE TAX
Sec.
1501. Short title of chapter.
1502. Definitions.
1503. Imposition of tax.
1504. Return and payment.
1505. Natural resource severance tax registration.
1505.1 Meters.
1506. Assessments.
1507. Time for assessment.
1508. Extension of limitation period.
1509. Reassessments.
1510. Interest.
1511. Penalties.
1512. Criminal acts.
1513. Abatement of additions or penalties.
1514. Bulk and auction sales.
1515. Collection upon failure to request reassessment, review
or appeal.
1516. Tax liens.
1517. Tax suit reciprocity.
1518. Service.
1519. Refunds.
1520. Refund petition.
1521. Rules and regulations.
1522. Recordkeeping.
1523. Examinations.
1524. Unauthorized disclosure.
1525. Cooperation with other governments.
1526. Bonds.
1527. Appropriation.
§ 1501. Short title of chapter.
This chapter shall be known and may be cited as the Natural
Resource Severance Tax Act.
§ 1502. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Association." A partnership, limited partnership or any
other form of unincorporated enterprise owned or conducted by
two or more persons.
"Corporation." A corporation, joint stock association,
limited liability company, business trust or any other
incorporated enterprise organized under the laws of this
Commonwealth, the United States or any other state, territory or
foreign country or dependency.
"Department." The Department of Revenue of the Commonwealth.
"Gross value." The volume-weighted average market price for
all arms-length transactions that a producer receives at the
sales meter for natural gas during a reporting period.
"Meter." A device to measure the passage of volumes of gases
or liquids past a certain point.
"Natural gas." A fossil fuel consisting of a mixture of
hydrocarbon gases, primarily methane, possibly including ethane,
propane, butane, pentane, carbon dioxide, oxygen, nitrogen and
hydrogen sulfide and other gas species. The term includes
natural gas from oil fields known as associated gas or casing
head gas, natural gas fields known as nonassociated gas, coal
beds, shale beds and other formations.
"Non-producing site." A point of severance that is not
capable of producing a natural gas in paying quantities.
"Paying quantities." Profit to the producer, however small,
over the producer's current operating expenses.
"Person." Every natural person, including a corporation,
limited liability company, business trust, trust, guardian or
other fiduciary, association, government entity or corporation.
"Producer." A person who engages or continues within this
Commonwealth in the business of severing natural gas for sale,
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profit or commercial use. The term does not include a person who
severs natural gas from a storage field.
"Producing site." A point of severance capable of producing
natural gas in paying quantities.
"Reporting period." A calendar month in which natural gas is
severed.
"Sales meter." A meter at the point where natural gas is
sold or transported to a purchaser or market.
"Sever," "severing" or "severance." The extraction or other
removal of a natural resource from the soil or water of this
Commonwealth.
"Tax." The tax imposed under this chapter.
"Taxpayer." A person subject to the tax imposed by this
chapter.
"Unit." A thousand cubic feet of natural gas measured at the
wellhead at a temperature of 60 degrees Fahrenheit and an
absolute pressure of 14.73 pounds per square inch in accordance
with American Gas Association Standards and according to Boyle's
law for the measurement of gas under varying pressures with
deviations as follows:
(1) The average absolute atmospheric pressure shall be
assumed to be 14.4 pounds to the square inch, regardless of
elevation or location of point of delivery above sea level or
variations in atmospheric pressure from time to time.
(2) The temperature of the gas passing the meters shall
be determined by the continuous use of a recording
thermometer installed to properly record the temperature of
gas flowing through the meters. The arithmetic average of the
temperature recorded each 24-hour day shall be used in
computing gas volumes. If a recording thermometer is not
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installed, or if installed and not operating properly, an
average flowing temperature of 60 degrees Fahrenheit shall be
used in computing gas volume.
(3) The specific gravity of the gas shall be determined
annually by tests made by the use of an Edwards or Acme
gravity balance, or at intervals as found necessary in
practice. Specific gravity determinations shall be used in
computing gas volumes.
(4) The deviation of the natural gas from Boyle's Law
shall be determined by annual tests or at other shorter
intervals as found necessary in practice. The apparatus and
method used in making the test shall be in accordance with
recommendations of the National Bureau of Standards or Report
No. 3 of the Gas Measurement Committee of the American Gas
Association, or amendments thereto. The results of the tests
shall be used in computing the volume of gas delivered under
this chapter.
"Wellhead meter." A meter placed at a producing or
nonproducing site to measure the volume of natural gas severed.
§ 1503. Imposition of tax.
(a) Establishment.--There is levied a privilege tax on every
producer who severs natural gas.
(b) Rate.--The tax imposed in subsection (a) shall be 5% of
the gross value of units severed at the wellhead during a
reporting period, plus 4.7 cents per unit severed.
§ 1504. Return and payment.
(a) Requirement.--Every producer is required to file a
return with the department, on a form to be prescribed by the
department, reporting all severed natural gas resources per
reporting period and the tax due as imposed under section 1503
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(relating to imposition of tax).
(b) Filing.--The return required by subsection (a) shall be
filed with the department within 15 days following the end of
the second calendar month after a reporting period.
(c) Deadline.--The tax imposed under section 1503 is due on
the day required to be filed and becomes delinquent if not
remitted to the department by that date.
§ 1505. Natural resource severance tax registration.
(a) Application.--Before a producer severs natural gas in
this Commonwealth, the producer shall apply to the department
for a severance tax registration certificate.
(a.1) Application fee.--The department may charge an
application fee to cover the administrative costs associated
with the application and registration process. If the department
charges an application fee, the department shall not register a
producer or issue a certificate until the producer has paid the
application fee.
(a.2) Declaration.--As part of the application for
registration, the producer is required to provide a declaration
of all sites in this Commonwealth used for the severance of
natural gas. The declaration is to include all producing sites
and nonproducing sites. The producer is required to update the
declaration when the producer adds or removes a producing or
nonproducing site in this Commonwealth or when there is a change
in the status of a producing or nonproducing site. The producer
shall update the declaration within 30 days after a calendar
month in which a change to the declaration occurs.
(b) Issuance.--After the receipt of an application, the
department shall issue the certificate applied for under
subsection (a), provided that said applicant shall have filed
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all required State tax reports and paid any State taxes not
subject to a timely perfected administrative or judicial appeal
or subject to a duly authorized deferred payment plan. The
certificate shall be nonassignable. All registrants shall be
required to renew their registration on a staggered renewal
system established by the department. After the initial
staggered period, a certificate issued shall be valid for a
period of five years.
(c) Refusal, suspension or revocation.--The department may
refuse to issue, suspend or revoke the certificate if the
applicant or any person holding a certificate has not filed
required State tax reports and paid State taxes not subject to a
timely perfected administrative or judicial appeal or subject to
a duly authorized deferred payment plan. The department shall
notify the applicant or registrant of any refusal, suspension or
revocation. The notice shall contain a statement that the
refusal, suspension or revocation may be made public. The notice
shall be made by first class mail. An applicant or registrant
aggrieved by the determination of the department may file an
appeal under the provisions for administrative appeals in the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971. In the case of a suspension or revocation which is
appealed, the registration and certificate shall remain valid
pending a final outcome of the appeals process. Notwithstanding
sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the
Tax Reform Code of 1971 or any other provision of law, if no
appeal is taken or if an appeal is taken and denied at the
conclusion of the appeal process the department may disclose, by
publication or otherwise, the identity of a person and the fact
that the person's registration and certificate has been refused,
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suspended or revoked under this subsection. Disclosure may
include the basis for refusal, suspension or revocation.
(d) Violation.--A person severing natural gas in this
Commonwealth without holding a valid registration and
certificate under subsection (b) shall be guilty of a summary
offense and shall, upon conviction, be sentenced to pay a fine
of not less than $300 nor more than $1,500. In the event the
person convicted defaults, he shall be sentenced to imprisonment
for not less than five days nor more than 30 days. The penalties
imposed by this subsection shall be in addition to any other
penalties imposed by this chapter. For purposes of this
subsection, the severing of a natural gas during any calendar
day shall constitute a separate violation. The Secretary of
Revenue may designate employees of the department to enforce the
provisions of this subsection. The employees shall exhibit proof
of and be within the scope of the designation when instituting
proceedings as provided by the Pennsylvania Rules of Criminal
Procedure.
(e) Failure to obtain license.--Failure to obtain a
registration and certificate does not relieve a person from
liability for the tax imposed by this chapter.
§ 1505.1. Meters.
A producer shall provide for and maintain a discrete wellhead
and sales meters. A producer shall ensure that the meters are
maintained according to industry standards.
§ 1506. Assessments.
(a) Authorization and requirement.--The department is
authorized and shall make the inquiries, determinations and
assessments of the tax, including interest, additions and
penalties imposed under this chapter.
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(b) Notice.--The notice of assessment and demand for payment
shall be mailed to the taxpayer. The notice shall set forth the
basis of the assessment. The department shall issue a notice of
the assessment to the producer. The notice shall set forth the
department's basis for the assessment. The department shall send
the notice of assessment to the producer at his registered
address via certified mail if the assessment increases the
producer's tax liability by $300. Otherwise, the notice of
assessment may be sent via regular mail.
§ 1507. Time for assessment.
(a) Requirement.--An assessment as provided under section
1506 (relating to assessments) shall be made within three years
after the date when the return provided for by section 1504
(relating to return and payment) is filed or the end of the year
in which the tax liability arises, whichever shall occur last.
For the purposes of this subsection and subsection (b), a return
filed before the last day prescribed for the filing period shall
be considered as filed on the last day.
(b) Exception.--The assessment may be made at any time
within six years after the return is filed if the total tax that
is properly included on the return is in excess of 25% of the
total tax reported on the return.
(c) Intent to evade.--Where no return is filed or where the
taxpayer files a false or fraudulent return with intent to evade
the tax imposed by this chapter, the assessment may be made at
any time.
(d) Erroneous credit or refund.--Within three years of the
granting of a refund or credit or within the period in which an
assessment or reassessment may have been filed by the department
for the taxable period for which the refund was granted,
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whichever period shall last occur, the department may file an
assessment to recover a refund or credit made or allowed
erroneously.
§ 1508. Extension of limitation period.
Notwithstanding the provisions of this chapter, the
assessment period may be extended where a taxpayer has provided
written consent before the expiration of the period provided in
section 1507 (relating to time for assessment) for a tax
assessment. The amount of tax due may be assessed at any time
within the extended period. The period extended may be extended
further by subsequent written consents made before the
expiration of the extended period.
§ 1509. Reassessments.
A producer against whom an assessment is made may petition
the department for a reassessment under Article XXVII of the act
of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971.
§ 1510. Interest.
The department shall assess interest on any delinquent tax at
the rate prescribed under section 806 of the act of April 9,
1929 (P.L.343, No. 176), known as The Fiscal Code.
§ 1511. Penalties.
The department shall enforce the following penalties:
(1) A penalty against a producer without a natural gas
severance tax registration and certificate. The penalty shall
be $1 for every unit severed without a registration and
certificate. The department may assess this penalty
separately from or in conjunction with any assessment of tax.
(2) A penalty against a producer for failure to file a
return as required under section 1504 (relating to return and
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payment). The penalty shall be 5% of the tax liability to be
reported on the return for each day beyond the due date that
the return is not filed.
(3) In addition to the penalty under paragraph (2), a
penalty against the producer for a willful failure to file a
return. The penalty shall be 200% of the tax liability
required to be reported on the return.
(4) A penalty against a producer for failure to timely
pay the tax as required by section 1504(c). The penalty shall
be 5% of the amount of tax due for each day beyond the
payment date that the tax is not paid.
§ 1512. Criminal acts.
(a) Fraudulent return.--Any person with intent to defraud
the Commonwealth, who willfully makes or causes to be made a
return required by this chapter which is false, is guilty of a
misdemeanor and shall, upon conviction, be sentenced to pay a
fine of not more than $2,000 or to imprisonment for not more
than three years, or both.
(b) Other crimes.--
(1) Except as otherwise provided by subsection (a), a
producer is guilty of a misdemeanor and shall, upon
conviction, be sentenced to pay a fine of not more than
$1,000 and costs of prosecution or to imprisonment for not
more than one year, or both, for any of the following:
(i) Willfully failing to timely remit the tax to the
department.
(ii) Willfully failing or neglecting to timely file
a return or report required by this chapter.
(iii) Refusing to timely pay a tax, penalty or
interest imposed or provided for by this chapter.
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(iv) Willfully failing to preserve his books, papers
and records as directed by the department.
(v) Refusing to permit the department or its
authorized agents to examine its books, records or
papers.
(vi) Knowingly make any incomplete, false or
fraudulent return or report.
(vii) Preventing or attempting to prevent the full
disclosure of the amount of tax due.
(viii) Providing any person with a false statement
as to the payment of tax with respect to any pertinent
facts.
(ix) Making, uttering or issuing a false or
fraudulent statement.
(2) The penalties imposed by this section shall be in
addition to other penalties imposed by this chapter.
§ 1513. Abatement of additions or penalties.
Upon the filing of a petition for reassessment or a petition
for refund by a taxpayer as provided under this chapter,
additions or penalties imposed upon the taxpayer by this chapter
may be waived or abated in whole or in part where the petitioner
establishes that he acted in good faith, without negligence and
with no intent to defraud.
§ 1514. Bulk and auction sales.
A person that sells or causes to be sold at auction, or that
sells or transfers in bulk, 51% or more of a stock of goods,
wares or merchandise of any kind, fixtures, machinery,
equipment, buildings or real estate or is involved in a business
for which the person is licensed or required to be licensed
under the provisions of this chapter shall be subject to the
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provisions of section 1403 of the act of April 9, 1929 (P.L.343,
No.176), known as The Fiscal Code.
§ 1515. Collection upon failure to request reassessment, review
or appeal.
(a) Power of department.--The department may collect a tax:
(1) If an assessment of tax is not paid within 30 days
after notice to the taxpayer when no petition for
reassessment has been filed.
(2) Within 60 days of the reassessment, if no petition
for review has been filed.
(3) If no appeal has been made, within 30 days of:
(i) the Board of Finance and Revenue's decision of a
petition for review; or
(ii) the expiration of the board's time for acting
upon the petition.
(4) In all cases of judicial sales, receiverships,
assignments or bankruptcies.
(b) Prohibition.--In a case for the collection of taxes
under subsection (a), the person against whom they were assessed
shall not be permitted to set up a ground of defense that might
have been determined by the department, the Board of Finance and
Revenue or the courts, provided that the defense of failure of
the department to mail notice of assessment or reassessment to
the taxpayer and the defense of payment of assessment or
reassessment may be raised in proceedings for collection by a
motion to stay the proceedings.
§ 1516. Tax liens.
(a) Lien imposed.--If any person liable to pay a tax
neglects or refuses to pay the tax after demand, the amount,
including interest, addition or penalty, together with
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additional costs that may accrue, shall be a lien in favor of
the Commonwealth upon the real and personal property of the
person but only after the same has been entered and docketed of
record by the prothonotary of the county where the property is
situated. The department may, at any time, transmit to the
prothonotaries of the respective counties certified copies of
all liens for taxes imposed by this act and penalties and
interest. It shall be the duty of the prothonotary receiving the
lien to enter and docket the same of record to the office of the
prothonotary. The lien shall be indexed as judgments are now
indexed. No prothonotary shall require as a condition precedent
to the entry of the lien the payment of costs incidental to its
entry.
(b) Priority of lien and effect on judicial sale.--Except
for the costs of the sale and the writ upon which the sale was
made and real estate taxes and municipal claims against the
property, the lien imposed under this section shall have
priority from the date of its recording and shall be fully paid
and satisfied out of the proceeds of any judicial sale of
property subject to, before any other obligation, judgment,
claim, lien or estate to which the property may subsequently
become subject, but shall be subordinate to mortgages and other
liens existing and duly recorded or entered of record prior to
the recording of the tax lien.
(c) No discharge by sale on junior lien.--In the case of a
judicial sale of property subject to a lien imposed under this
section, upon a lien or claim over which the lien imposed under
this section has priority, the sale shall discharge the lien
imposed under this section to the extent only that the proceeds
are applied to its payment, and the lien shall continue in full
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force and effect as to the balance remaining unpaid. There shall
be no inquisition or condemnation upon any judicial sale of real
estate made by the Commonwealth under the provisions of this
chapter. The lien of the taxes, interest and penalties shall
continue as provided in the act of April 9, 1929 (P.L.343,
No.176), known as The Fiscal Code, and a writ of execution may
directly issue upon the lien without the issuance and
prosecution to judgment of a writ of scire facias, provided that
not less than ten days before issuance of any execution on the
lien, notice of the filing and the effect of the lien shall be
sent by registered mail to the taxpayer at his last known post
office address, provided further that the lien shall have no
effect upon any stock of goods, wares or merchandise regularly
sold or leased in the ordinary course of business by the person
against whom the lien has been entered, unless and until a writ
of execution has been issued and a levy made upon said stock of
goods, wares and merchandise.
(d) Duty of prothonotary.--Any willful failure of any
prothonotary to carry out any duty imposed upon him by this
section shall be a misdemeanor. Upon conviction, he shall be
sentenced to pay a fine of not more than $1,000 and costs of
prosecution or to imprisonment for not more than one year, or
both.
(e) Priority.--Except as provided in this chapter, the
distribution, voluntary or compulsory, in receivership,
bankruptcy or otherwise of the property or estate of any person,
all taxes imposed by this chapter which are due and unpaid and
are not collectible under the provisions of section 225 of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971, shall be paid from the first money available for
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distribution in priority to all other claims and liens, except
as the laws of the United States may give priority to a claim to
the Federal Government. A person charged with the administration
or distribution of the property or estate who violates the
provisions of this section shall be personally liable for the
taxes imposed by this chapter which are accrued and unpaid and
chargeable against the person whose property or estate is being
administered or distributed.
(f) Other remedies.--Subject to the limitations contained in
this chapter as to the assessment of taxes, nothing contained in
this section shall be construed to restrict, prohibit or limit
the use by the department in collecting taxes due and payable of
another remedy or procedure available at law or equity for the
collection of debts.
§ 1517. Tax suit reciprocity.
The courts of this Commonwealth shall recognize and enforce
liabilities for natural gas severance taxes lawfully imposed by
any other state, provided that the other state recognizes and
enforces the tax set forth in this chapter.
§ 1518. Service.
A producer is deemed to have appointed the Secretary of the
Commonwealth its agent for the acceptance of service of process
or notice in a proceeding for the enforcement of the civil
provisions of this chapter and service made upon the Secretary
of the Commonwealth as agent shall be of the same legal force
and validity as if the service had been personally made upon the
person. Where service cannot be made upon the person in the
manner provided by other laws of this Commonwealth relating to
service of process, service may be made upon the Secretary of
the Commonwealth. In that case, a copy of the process or notice
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shall be personally served upon any agent or representative of
the person who may be found within this Commonwealth or, where
no agent or representative may be found, a copy of the process
or notice shall be sent via registered mail to the person at the
last known address of his principal place of business, home
office or residence.
§ 1519. Refunds.
Under Article XXVII of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, the department
shall refund all taxes, interest and penalties paid to the
Commonwealth under the provisions of this chapter to which the
Commonwealth is not rightfully entitled. The refunds shall be
made to the person or the person's heirs, successors, assigns or
other personal representatives who paid the tax, provided that
no refund shall be made under this section regarding a payment
made by reason of an assessment where a taxpayer has filed a
petition for reassessment under section 2702 of the Tax Reform
Code of 1971 to the extent the petition is adverse to the
taxpayer by a decision which is no longer subject to further
review or appeal. Nothing in this chapter shall prohibit a
taxpayer who has filed a timely petition for reassessment from
amending it to a petition for refund where the petitioner paid
the tax assessed.
§ 1520. Refund petition.
(a) General rule.--Except as provided for in subsection (b),
the refund or credit of tax, interest or penalty provided for by
section 1519 (relating to refunds) shall be made only where the
person who has paid the tax files a petition for refund with the
department under Article XXVII of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, within the
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time limits of section 3003.1 of the Tax Reform Code of 1971.
(b) Severance tax license.--A refund or credit of tax,
interest or penalty paid as a result of an assessment made by
the department under section 1505 (relating to natural resource
severance tax registration), shall be made only where the person
who has paid the tax files with the department a petition for a
refund with the department under Article XXVII within the time
limits of section 3003.1 of the Tax Reform Code of 1971. The
filing of a petition for refund, under the provisions of this
subsection, shall not affect the abatement of interest,
additions or penalties to which the person may be entitled by
reason of his payment of the assessment.
§ 1521. Rules and regulations.
The department is charged with the enforcement of the
provisions of this chapter and is authorized and empowered to
prescribe, adopt, promulgate and enforce rules and regulations
not inconsistent with the provisions of this chapter relating to
any matter or thing pertaining to the administration and
enforcement of the provisions of this chapter and the collection
of taxes, penalties and interest imposed by this chapter. The
department may prescribe the extent, if any, to which any of the
rules and regulations shall be applied without retroactive
effect.
§ 1522. Recordkeeping.
(a) General rule.--Every person liable for any tax imposed
by this chapter, or for the collection, shall keep records,
including those enumerated in subsection (b), render statements,
make returns and comply with the rules and regulations as the
department may prescribe regarding matters pertinent to the
person's business. Whenever it is necessary, the department may
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require a person, by notice served upon the person or by
regulations, to make returns, render statements or keep records
as the department deems sufficient to show whether or not a
person is liable to pay tax under this chapter.
(a.1) Records.--Records to be maintained are:
(1) Wellhead and sales meter charts for each reporting
period and the meter calibration and maintenance records. If
turbine meters are in use, the maintenance records will be
made available to the department upon request.
(2) Records, statements and other instruments furnished
to a producer by a person to whom the producer delivers for
sale, transport or delivery of natural gas.
(3) Records, statements and other instruments as the
department may prescribe by regulation.
(b) Records of nonresidents.--A nonresident who does
business in this Commonwealth as a producer shall keep adequate
records of the business and of the tax due as a result. The
records shall be retained within this Commonwealth unless
retention outside this Commonwealth is authorized by the
department. The department may require a taxpayer who desires to
retain records outside this Commonwealth to assume reasonable
out-of-State audit expenses.
(c) Keeping of separate records.--A person doing business as
a producer, who at the same time is engaged in another business
or businesses which do not involve the severing of natural gas
taxable under this chapter, shall keep separate books and
records of the businesses so as to show the taxable severing of
natural gas under this chapter separately from other business
activities not taxable hereunder. If any person fails to keep
separate books and records, the person shall be liable for a
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penalty equaling 100% of tax due under this chapter for the
period where separate records were not maintained.
§ 1523. Examinations.
The department or any of its authorized agents are authorized
to examine the books, papers and records of any taxpayer in
order to verify the accuracy and completeness of any return made
or, if no return was made, to ascertain and assess the tax
imposed by this chapter. The department may require the
preservation of all books, papers and records for any period
deemed proper by it but not to exceed three years from the end
of the calendar year to which the records relate. Every taxpayer
is required to give to the department or its agent the means,
facilities and opportunity for examinations and investigation
under this section. The department is further authorized to
examine any person, under oath, concerning the taxable severing
of natural gas by any taxpayer or concerning any other matter
relating to the enforcement or administration of this chapter,
and to this end may compel the production of books, papers and
records and the attendance of all persons whether as parties or
witnesses whom it believes to have knowledge of relevant
matters. The procedure for the hearings or examinations shall be
the same as that provided by the act of April 9, 1929 (P.L.343,
No. 176), known as The Fiscal Code.
§ 1524. Unauthorized disclosure.
Any information gained by the department as a result of any
return, examination, investigation, hearing or verification
required or authorized by this chapter shall be confidential
except for official purposes and except in accordance with
proper judicial order or as otherwise provided by law, and any
person unlawfully divulging the information shall be guilty of a
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misdemeanor and shall, upon conviction, be sentenced to pay a
fine of not more than $1000 and costs of prosecution or to
imprisonment for not more than one year, or both.
§ 1525. Cooperation with other governments.
Notwithstanding the provisions of section 1517 (relating to
tax suit reciprocity), the department may permit the
Commissioner of the Internal Revenue Service of the United
States, the proper officer of any state or the authorized
representative of either officer to inspect the tax returns of
any taxpayer, or may furnish to the officer or to his authorized
representative an abstract of the return of any taxpayer, or
supply him with information concerning any item contained in any
return or disclosed by the report of any examination or
investigation of the return of any taxpayer. This permission
shall be granted only if the statutes of the United States or
another state grant substantially similar privileges to the
proper officer of the Commonwealth charged with the
administration of this chapter.
§ 1526. Bonds.
(a) Taxpayer to file bond.--The department may require a
nonresident natural person or any foreign corporation,
association, fiduciary, partnership or other entity, not
authorized to do business within this Commonwealth or not having
an established place of business in this Commonwealth and
subject to the tax imposed by section 1503 (relating to
imposition of tax), to file a bond issued by a surety company
authorized to do business in this Commonwealth and approved by
the Insurance Commissioner as to solvency and responsibility, in
amounts as it may fix, to secure the payment of any tax or
penalties due or which may become due from a natural person or
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corporation whenever it deems it necessary to protect the
revenues obtained under this chapter. In order to protect the
revenues obtained under this chapter, the department shall
require a nonresident natural person or a foreign corporation,
association, fiduciary, partnership or entity who is not
authorized to do business or does not have an established place
of business in this Commonwealth and is subject to the tax
imposed by section 1503, to file a bond issued by a surety
company authorized to do business in this Commonwealth and
approved by the Insurance Commissioner as to solvency and
responsibility, in amounts as it may fix, to secure the payments
of any tax or penalties due or which may become due from a
natural person, corporation or other entity. The department may
also require a bond of a person petitioning the department for
reassessment in the case of any assessment over $500 or where,
in its opinion, the ultimate collection is in jeopardy. For a
period of three years, the department may require a bond of any
person who has, on three or more occasions within a 12-month
period, either filed a return or made payment to the department
more than 30 days late. In the event the department determines a
taxpayer is required to file a bond, it shall give notice to the
taxpayer specifying the amount of the bond required. The
taxpayer shall file the bond within five days after notice is
given by the department unless, within five days, the taxpayer
shall request in writing a hearing before the Secretary of
Revenue or his representative. At the hearing, the necessity,
propriety and amount of the bond shall be determined by the
secretary or the secretary's representative. The determination
shall be final and the taxpayer shall comply with it within 15
days after notice is mailed to the taxpayer.
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(b) Securities in lieu of bond.--In lieu of the bond
required by this section securities approved by the department
or cash in a prescribed amount may be deposited. The securities
or cash shall be kept in the custody of the department. The
department may apply the securities or cash to a tax and
interest or penalties due without notice to the depositor. The
securities may be sold by the department to pay a tax and/or
interest or penalties due at public or private sale upon five
days' written notice to the depositor.
(c) Failure to file bond.--The department may file a lien
under section 1516 (relating to tax liens) against any taxpayer
who fails to file a bond when required to do so under this
section. All funds received upon execution of the judgment on
the lien shall be refunded to the taxpayer with 3% interest,
should a final determination be made that he does not owe any
payment to the department.
§ 1527. Appropriation.
The amount of the proceeds from the tax imposed by this
chapter as shall be necessary for the payment of refunds,
enforcement or administration under this chapter, is hereby
appropriated for such purposes.
Section 2. This act shall take effect October 1, 2009.
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