Section 9.18. Cost of collection

(a) Definition. The following term, when used in this section, has the following meaning:

Cost of collection—Limited only to lien filing costs, costs imposed under a Federal or other State tax refund offset program, or costs incurred by the Department or the Office of Attorney General in paying commissions or other remuneration, such as private attorneys’ fees, or fees to private collection agencies to collect the Department collectible tax liabilities.

(b) Reimbursement for cost of collection.

(1) The costs of collection incurred by the Department or the Office of Attorney General on a liability for taxes administered by the Department, in addition to all tax principal, interest, penalties and fees, must be paid in full before the delinquent taxpayer’s liability will be extinguished by the Department on its records unless the cost of collection is discharged by operation of law.

(2) Exceptions are as follows:

(i) Fuels tax liabilities.

(ii) Motor Carrier Road Tax liabilities. The fuel tax system is excluded from these provisions because statutory provisions in 75 Pa.C.S. § 9014(b) (relating to collection of unpaid taxes) already establish a commission that shall be paid by a delinquent distributor when a delinquent fuel tax liability is paid by the distributor, after institution of a suit by the Office of Attorney General and the commissions under 75 Pa.C.S. § 9014(b) already constitute a lien on a delinquent distributor’s property.

(c) Cost of collection.

(1) The costs of collection shall be added to the amount of the liability for taxes administered by the Department and constitute a lien against the real and personal property of the person, with or without any evidence of the specific itemized breakdown of the costs of collection being stated on the underlying filed tax lien or on the State tax lien certificate itself. The tax lien will not be satisfied until all of the tax, interest, penalty and cost of collection directly associated with the liened tax liability have been entirely paid or discharged by operation of law.

(2) Private attorneys’ fees or expenses incurred by a private attorney to file and argue the need for a supersedeas bond or any other form of adequate security while the private attorney is still litigating the underlying merits of a contested State tax appeal will not be deemed a cost of collection.

(3) The costs of collection may be collected by the Commonwealth in any other lawful way or method that the underlying tax liability can be collected.

The provisions of this § 9.18 adopted July 14, 2006, effective July 15, 2006, 36 Pa.B. 3673.