The changes in Act 123 grant a longer timeline for submission and provide an option for settlements to resolve tax disputes. The result is less red tape for business owners and an economic environment that makes Pennsylvania more business friendly.
The PICPA is proud to have played a central role in shaping the improvements to the tax appeal process that are now delivering measurable results. What began as a series of conversations in fall 2022 has culminated in a more efficient, more accessible, and more business-friendly system that benefits taxpayers, tax practitioners, and state government alike.
In late 2022, the PICPA began working collaboratively with the Pennsylvania Treasury Department to examine opportunities to improve the state’s tax appeals process. A core working group of PICPA members from our State Taxation Steering Committee joined Treasury officials to share practitioner insight and identify the procedural barriers that were creating unnecessary friction.
The issues were not abstract. CPAs across Pennsylvania saw many tax appeals dismissed, not because the merits were weak but because filing deadlines were rigid. Taxpayers were forced into costly litigation when alternative resolution mechanisms could have delivered fair outcomes more efficiently. The system, while well-intentioned, needed modernization.
After months of discussion and drafting, Senate Bill 1051 was formally introduced in the Pennsylvania Senate on Jan. 29, 2024. The bill’s legislative journey was not without challenges. It narrowly passed the Senate on June 24 by a vote of 29–21, but through continued dialogue and education, support broadened. Final passage came in the House on Oct. 9, 2024, with a unanimous vote of 202–0. The Senate concurred that same day with a vote of 47–2.
From initial conversations to final approval, the effort took about two years, a remarkably short time in the world of legislation. The rapid passage of Act 123 stands as a testament to what sustained collaboration and good-faith policymaking can achieve.
Act 123 introduced two fundamental reforms to the Board of Finance & Revenue (BF&R), Pennsylvania’s independent administrative tax court responsible for the second and final level of administrative appeal before state court review.
First, the law extended the timeline for filing certain personal income tax appeals from 60 days to 90 days, with the option of a 30-day extension for good cause. This seemingly modest change has had a profound impact.
By Dec. 31, 2025, BF&R was able to decide 154 cases on their merits that otherwise would have been dismissed for jurisdictional reasons under the old timeline. That is 154 taxpayers who received substantive review rather than procedural rejection.
The law also extended filing timelines at the Department of Revenue’s Board of Appeals, reducing technical filing issues upstream. As a result, BF&R received 141 fewer personal income tax appeals with deadline defects in 2025.
Second, Act 123 introduced a settlement option – a no-cost process that allows taxpayers and the Department of Revenue to resolve disputes more efficiently.
By the end of 2025, 55 requests and recommendations for settlement had been made. Of those, 45% resulted in amicable resolutions. These are disputes resolved without prolonged administrative proceedings or costly litigation, saving time, resources, and uncertainty for all parties involved.
Importantly, BF&R also has seen an overall reduction in decisions appealed to Commonwealth Court: 378 appeals in 2025 compared to 457 in 2024. Fewer cases escalating to state court suggest that more disputes are being resolved effectively at the administrative level.
These outcomes validate the intent behind the reform.
Tax policy is about more than revenue collection. It is also about predictability, fairness, and administrative efficiency. For job creators, entrepreneurs, and growing companies, procedural rigidity can translate into real economic cost.
Act 123 reflects a recognition that competitiveness is not solely about tax rates, it is also about tax administration.
By providing reasonable filing timelines and a structured settlement option, Pennsylvania has made its tax dispute resolution process more practical and more aligned with modern business realities. The reforms reduce administrative friction while maintaining accountability and legal rigor.
For CPAs and tax practitioners, these changes allow us to focus on substance, ensuring that tax laws are applied correctly and fairly, rather than navigating unnecessary procedural traps. That benefits our clients and strengthens confidence in the system.
One of the most encouraging aspects of working on this reform was how it came together.
Act 123 was supported by a broad coalition, including the PICPA, the Pennsylvania Chamber of Business and Industry, the National Federation of Independent Business, and the Pennsylvania Society of Enrolled Agents. Legislative champions in Sen. Scott Hutchinson and Rep. Tim Briggs helped shepherd the bill through the process.
Equally important, what began with some institutional hesitation ultimately concluded with broad bipartisan support. The unanimous House vote and overwhelming Senate concurrence demonstrate that practical, well-crafted reforms can transcend partisan divides when they focus on solving problems.
For the PICPA, this effort reflects our broader mission: to bring practitioner expertise to the policymaking table and advocate for solutions that serve taxpayers and the public interest. Led by Peter N. Calcara, PICPA’s vice president of government relations, our State Taxation Steering Committee members who participated in the working group offered invaluable real-world insight. Their contributions ensured that the final legislation addressed operational realities, not just theoretical concerns.
One year of implementation data confirms that Act 123 is working. More cases are being decided on their merits. Fewer appeals are being dismissed on technicalities. Mediation is resolving disputes efficiently. Court caseloads are declining.
But the broader lesson extends beyond tax administration. When policymakers engage directly with practitioners, when agencies and stakeholders collaborate early, and when reforms are grounded in practical experience, government works better.
Pennsylvania’s tax system is stronger today because of that approach.
At the PICPA, we remain committed to continuing this kind of constructive engagement. Modernizing systems is an ongoing responsibility. Act 123 demonstrates what is possible when we align around shared goals: fairness, efficiency, and competitiveness.
Two years of collaboration have yielded tangible results. For taxpayers, businesses, and the Commonwealth, that is a success worth building upon.
Jennifer Cryder, CPA, is CEO of the Pennsylvania Institute of Certified Public Accountants (PICPA) in Philadelphia. She was named one of the 100 Most Influential People in Accounting by Accounting Today. She can be reached at jcryder@picpa.org.
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