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PA Bulletin, Doc. No. 01-2079


Notice of Comments Issued

[31 Pa.B. 6359]

   Section 5(d) of the Regulatory Review Act (71 P. S. § 745.5(d)) provides that the designated standing committees may issue comments within 20 days of the close of the public comment period, and the Independent Regulatory Review Commission (Commission) may issue comments within 10 days of the close of the committees' comment period. The Commission's comments are based upon the criteria contained in section 5.1(h) and (i) of the Regulatory Review Act (71 P. S. § 745.5a(h) and (i)).

   The Commission issued comments on the following proposed regulation. The agency must consider these comments in preparing the final-form regulation. The final-form regulation must be submitted by the date indicated.

Reg. No.Agency/Title Issued Deadline
#15-418 Department of Revenue 11/1/01 10/1/03
   Personal Income Tax;
   Employer Withholding

(31 Pa.B. 4956 (September 1, 2001))

Department of Revenue Regulation No. 15-418
Personal Income Tax; Employer Withholding
November 1, 2001

   We submit for consideration the following objections and recommendations regarding this regulation. Each objection or recommendation includes a reference to the criteria in the Regulatory Review Act (71 P. S. § 745.5a(h) and (i)) which have not been met. The Department of Revenue (Department) must respond to these Comments when it submits the final-form regulation. If the final-form regulation is not delivered by October 1, 2003, the regulation will be deemed withdrawn.

1. Section 113.3. Computing withholding of Pennsylvania Personal Income Tax.--Consistency with Statute; Clarity.

Subsections (d) and (e)--Employer failure or refusal to pay over any withheld tax.

   These two subsections implement a statutory provision at 72 P. S. § 7320 that states that all taxes withheld by an employer will constitute a trust fund for the Commonwealth. The existing regulations do not specifically address the concept of a trust fund for employer withholding tax purposes.

   This proposed regulation adds these two subsections to an existing section related to computing the withholding of personal income tax. For clarity, Subsections (d) and (e) of Section 113.3 should be placed in a separate and distinct section that specifically addresses the concept of a trust fund for employer withholding tax purposes.

Subsection (f)--Cafeteria plans.

   This subsection describes what is nontaxable under a qualifying cafeteria plan. There are two concerns.

   First, Subparagraph (f)(3) addresses payments that are outside of a qualifying cafeteria plan but are still nontaxable for Pennsylvania Personal Income Tax purposes. Hence, it should appear as a separate subsection.

   Second, the nontaxable payments alluded to in Subparagraph (f)(3) are delineated in existing regulations at 61 Pa. Code § 101.6. Therefore, this subparagraph should reference Section 101.6.

2. Section 113.3b. Registration.--Clarity.

   This section requires employers to use a ''form prescribed by instructions of the Department.'' The form is available on the Commonwealth's website or at Department district offices throughout the State. This fact should be included in the regulation. In addition, the regulation should identify the form by number or title.

3. Section 113.4. Time and place for filing reconciliation and withholding statements.--Clarity.

   Subsection (c) states that when employers file withholding statements via electronic or magnetic media, the data will be forwarded as ''specified in the instructions of the Department.'' It is our understanding that the Department will be flexible in accepting filings via electronic or magnetic media, and will accept filings based on Federal standards and requirements. For clarity, the Department should explain what the instructions are and where they can be found.


[Pa.B. Doc. No. 01-2079. Filed for public inspection November 16, 2001, 9:00 a.m.]

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