Shaking things up in state and local tax
Shaking things up in state and local tax
On November 20, 2024, the Pennsylvania Supreme Court concluded that its decision to invalidate a limitation (or “cap”) on net operating loss (NOL) carryforwards should be applied prospectively only.
The issue of whether to provide retroactive relief to taxpayers injured by the NOL cap arose based on two of its prior decisions:
The Pennsylvania Supreme Court held that the City of Philadelphia is not required to provide a city wage tax credit for income tax payments that a resident made to another state. For the purposes of a dormant Commerce Clause analysis, the court found that state and local taxes do not need to be considered in…
On July 13, 2023, the Pennsylvania Board of Finance and Revenue (“BF&R”) denied a pharmaceuticals developer’s corporate net income tax refund claim based on adjustments to its apportionment formula and taxable income. The taxpayer filed, and the Pennsylvania Department of Revenue denied, a refund claim for the 2019 tax year on three grounds: (1) the…
The Multistate Tax Commission (MTC)’s 2023 Fall Committee Meetings are off to an exciting start, considering the announcement that Philadelphia will be joining the MTC’s Joint Audit Program. The District of Columbia and Philadelphia are the Program’s only non-state members.
The MTC’s Joint Audit Program provides audit services to the participating taxing authorities. The Program’s…
On March 1, 2023, a Florida Circuit Court rejected the Department of Revenue’s attempt to achieve a market-based sourcing result under Florida’s costs of performance sourcing rule that applies to receipts from services. In Billmatrix Corp. et al. v. Dep’t of Revenue, the court granted summary judgment in favor of a number of affiliated…
The Pennsylvania Supreme Court held that a taxpayer was not eligible for a sales tax refund on purchases made using coupons because the receipts did not sufficiently describe the coupons, and did not clearly indicate which item(s) the coupon discounted. Where a consumer uses a coupon, Pennsylvania sales tax is generally not due on discount…
Pennsylvania recently codified the state’s corporate income tax economic nexus threshold, making corporations with no physical presence in Pennsylvania responsible for corporate income tax if they have sales of $500,000 or more per year sourced to Pennsylvania for tax years beginning after December 31, 2022. The legislation also includes a non-exhaustive list of other nexus…
In General Motors Corporation v. Commonwealth, the Pennsylvania Supreme Court held that the state’s prior flat $2 million cap on a corporate taxpayer’s net operating loss (NOL) deduction violated the state constitution’s Uniformity Clause and, therefore, the state’s NOL deduction statute must be stricken in its entirety.1 Nevertheless, the Court determined that the…
The Pennsylvania Commonwealth Court issued its much-anticipated decision on July 24 in Synthes USA HQ Inc. v. Commonwealth of Pennsylvania.
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On April 22, 2020, the Pennsylvania Supreme Court issued an opinion that could have a material impact on the unemployment insurance obligations of businesses that engage independent contractors in the state. In A Special Touch v. Pennsylvania Dep’t of Labor & Indust., involving a nail salon, the state supreme court construed the second prong of…
