HB 856 — 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, further providing for assessment; in personal income tax, further providing for assessment; in corporate net income tax, further providing for assessments; in procedure and administration, further providing for petition for reassessment; and, in general provisions, further providing for petitions for refunds and providing for compromise or adjustment of assessments.

PRINTER'S NO.   894

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 856
                                                Session of
                                                  2025

     INTRODUCED BY WEBSTER, SANCHEZ, HILL-EVANS AND MALAGARI,
        MARCH 11, 2025

     REFERRED TO COMMITTEE ON FINANCE, MARCH 11, 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, further providing for
11      assessment; in personal income tax, further providing for
12      assessment; in corporate net income tax, further providing
13      for assessments; in procedure and administration, further
14      providing for petition for reassessment; and, in general
15      provisions, further providing for petitions for refunds and
16      providing for compromise or adjustment of assessments.
17      The General Assembly of the Commonwealth of Pennsylvania
18   hereby enacts as follows:
19      Section 1.    Sections 230(a), 338(d) and 407.1(b) of the act
20   of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
21   1971, are amended to read:
22      Section 230.    Assessment.--(a)   The department is authorized
23   and required to make the inquiries, determinations and
24   assessments of the tax (including interest, additions and
25   penalties) imposed by this article. A notice of assessment and
 1   demand for payment shall be mailed to the taxpayer. The notice
 2   shall set forth the basis of the assessment. A notice of
 3   assessment or notice of adjustment issued by the department
 4   shall contain information concerning the items being adjusted
 5   and an explanation regarding why items are being adjusted in the
 6   notice of assessment or notice of adjustment.
 7      * * *
 8      Section 338.   Assessment.--* * *
 9      (d)   A notice of assessment issued by the department pursuant
10   to this article shall be mailed to the taxpayer. The notice
11   shall set forth the basis of the assessment. A notice of
12   assessment or notice of adjustment issued by the department
13   shall contain information concerning the items being adjusted
14   and an explanation regarding why items are being adjusted in the
15   notice of assessment or notice of adjustment.
16      Section 407.1.   Assessments.--* * *
17      (b)   A notice of assessment and demand for payment shall be
18   mailed to the taxpayer. The notice shall set forth the basis of
19   the assessment. The assessment shall be paid to the department
20   upon receipt of the notice of assessment. A notice of assessment
21   or notice of adjustment issued by the department shall contain
22   information concerning the items being adjusted and an
23   explanation regarding why items are being adjusted in the notice
24   of assessment or notice of adjustment. Payment of the assessment
25   shall be without prejudice to the right of the taxpayer to file
26   a petition for reassessment in the manner prescribed by Article
27   XXVII.
28      * * *
29      Section 2.   Section 2702(a)(1) of the act, amended October
30   29, 2024 (P.L.1086, No.123), is amended and the section is

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 1   amended by adding a subsection to read:
 2   Section 2702.    Petition for reassessment.
 3      (a)   General rule.--
 4            (1)   Except as provided under paragraph (2), a taxpayer
 5      may file a petition for reassessment with the department
 6      within 60 days after the mailing date of the notice of
 7      assessment. The 60-day period for a taxpayer to file a
 8      petition for reassessment with the department shall not
 9      commence unless the notice of assessment or notice of
10      adjustment issued by the department contains information
11      concerning the items being adjusted and an explanation
12      regarding why items are being adjusted in the notice of
13      assessment or notice of adjustment.
14            * * *
15      (a.3)   Extension for filing petition.--Notwithstanding any
16   other provision of law, the department may extend the date for
17   filing a petition for reassessment under subsection (a) if all
18   of the following apply:
19            (1)   A taxpayer files a written application to the
20      department that demonstrates good cause for the extension.
21            (2)   The department finds that granting the written
22      application under paragraph (1) will not prejudice the
23      Commonwealth.
24      * * *
25      Section 3.    Section 3003.1 of the act is amended by adding a
26   subsection to read:
27      Section 3003.1.    Petitions for Refunds.--* * *
28      (d.1)   In the case of the Department of Revenue applying a
29   tax overpayment or tax credit to satisfy, either in whole or in
30   part, an assessment, a petition for refund must be filed with

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 1   the department within six months of the mailing date of the
 2   notice of adjustment.
 3         * * *
 4         Section 4.   The act is amended by adding a section to read:
 5         Section 3003.26.   Compromise or Adjustment of Assessments.--
 6   (a)    Notwithstanding any other provision of law, in the case of
 7   doubtful liability or financial hardship of a taxpayer or in
 8   order to promote effective tax administration, the Department of
 9   Revenue may compromise an assessment of a tax imposed under this
10   act without the requirement that the taxpayer appeal the
11   assessment.
12         (b)   Notwithstanding any other provision of law, the
13   Department of Revenue shall adjust an assessment of a tax
14   imposed under this act without the requirement that the taxpayer
15   appeal the assessment if any of the following apply:
16         (1)   The assessment is a result of a clerical error made by
17   the Department of Revenue.
18         (2)   There is an issue with the existence of a payment or tax
19   credit.
20         (3)   The taxpayer failed to provide necessary documentation
21   with a tax return.
22         Section 5.   This act shall take effect in 60 days.




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