The Pennsylvania Department of Revenue Plans to Implement New Integrated Tax System Beginning with Corporation Taxes

State and Local Tax

By Cathleen Condrac

Beginning in March 2013, the Pennsylvania Department of Revenue (Department) will begin implementation of its new integrated tax system (ITS) starting with corporation taxes. The new system will replace the 38-year-old mainframe system installed in 1975 and is expected to eventually improve the processing of all state taxes through greater automation, improved data accessibility and enhanced process uniformity.

Corporate taxpayers will be assigned a new 10-digit identification number, which will replace the current Pennsylvania Account Identification Number or Box Number. However, during the transition phase, the new ITS will have the ability to accept and recognize old state and federal identification numbers. The Department plans to wait until May to notify corporate taxpayers of their new identification numbers in order to avoid confusion during the 2013 tax season. These new identification numbers will provide the Department with an integrated view of taxpayer accounts as more tax types are transitioned to the ITS.

Additional ITS changes for corporation taxes will include:

  • The application of delinquent corporation tax payments first to tax, then interest, followed by penalty and legal fees, starting with the oldest delinquent period until it is paid in full (beginning in March 2013).
  • An enhanced capability allowing the Department to offset credits in one tax against unsatisfied liabilities in other taxes. Offsets will first be made against liabilities existing in the same tax type, and then will be applied against the oldest delinquencies of other tax types.
  • The capability to automatically apply restricted tax credits to a liability where a taxpayer will receive the greatest benefit before the credits expire.
  • A more comprehensive enforcement of corporate taxpayers’ estimated payments. In order to avoid penalties, the Department suggests that taxpayers make appropriate estimated payments.
  • Improved or more taxpayer-friendly correspondence from the Department

The Department intends to make all efforts necessary to minimize interruptions in customer service as corporation taxes are transitioned to the ITS. Additional information shall be provided as it becomes available.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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