Current through Register Vol. 54, No. 45, November 9, 2024
Section 35.3 - Lien for taxes(a)Lien imposed. If a person liable to pay a tax, interest, addition or penalty neglects or refuses to pay the same after demand, upon entry of record by the prothonotary of the county where the property is situated, the amount shall be a lien in favor of the Commonwealth against real property and personal property-except merchandise regularly sold in the course of the taxpayer's business-of the person.(b)Priority and effect of lien. The Commonwealth will have priority from the date of entry of the lien and shall be fully paid and satisfied out of the judicial sale of the property subject thereto before any subsequent obligation attaching to the property. However, the Commonwealth lien is subject to mortgages or other liens existing and recorded at the time of the entry of the tax lien, and local real property taxes and municipal claims against real property. In the case of a judicial sale upon a claim over which the tax lien has priority, the sale shall discharge the tax lien only to the extent that the proceeds are applied to its payment and the lien shall continue in full force as to the balance remaining unpaid. The lien shall continue for 5 years from date of entry and may be revived in the manner now or hereafter provided for renewal of judgments or as may be provided in the FC (72 P. S. §§ 1-1855).(c)Priority of tax. In the distribution, voluntary or compulsory, in receivership, insolvency, assignment for benefit of creditors or otherwise of the property or estate of a person, taxes imposed by the act which are due and unpaid will be paid from the first money available for distribution in priority to unsecured claims and junior lien claims except insofar as the laws of the United States may give a prior claim to the Federal Government. However, in the distribution of a decedent's estate or bankruptcy, the priority of the tax claim is controlled by the Fiduciaries Act and 11 U.S.C. §§ 101 - 151326, known as the Federal Bankruptcy Act. A person charged with the administration or distribution of the property who violates this chapter will be personally liable for taxes imposed by the act which are accrued and unpaid and are chargeable against the person whose property or estate is being administered or distributed.