Digital Product Sales Tax Enacted

by Kevin McGarry 4. August 2016 09:11
Residents of Pennsylvania are now subject to a six percent sales tax on digital products as defined under Act 84 of 2016. Digital products, as it pertains to this tax, include “any product transferred electronically to a customer by download, streaming, or through other electronic means”. Examples of this include e-books, digital video streamed through Netflix or Hulu, songs downloaded or streamed through iTunes or Google Play, and downloaded apps or add-ons. The tax is collected by the vendors of the product and the location of the sale is determined by the customer’s billing address. For more information on the Digital Product Sales Tax and other PA tax updates, please visit the Pennsylvania Department of Revenue’s website.
Categories: Tax

Legislative Changes Applicable to PA Business Taxpayers

by Tim Marshall 9. August 2012 10:15
With the passage of both H.B. 761 and Senate Bill 1263 in July, the Commonwealth of Pennsylvania has enacted selected legislative changes for its business taxpayers.  These changes, some of which became effective in July, affect areas including Corporate Net Income Tax, Sales Tax, Administrative Tax Appeals Request For Compromise, Research and Development Credits, 1099-MISC Reporting Obligations and Penalties, and EFT Payments.   More information is available in this alert from BDO’s State and Local Tax office.
Categories: Tax

Hiring in PA? Great! (but avoid this common compliance issue)

by Kevin McGarry 29. June 2012 09:23
  In 1997, the Commonwealth of Pennsylvania enacted Act 58, requiring all employers to report information on the employees they hired.  This legislation was created to assist The Commonwealth to locate parents who were not making their child support payments.  This system also assisted The Commonwealth to detect unemployment and workers compensation fraud overpayments.  Most employers have not continued to follow this mandate, as the quarterly unemployment tax reporting appeared to be addressing this issue.  However, The Commonwealth is actively notifying employers that this new hire reporting requirement is still required by law. Our advice to employers: when a new employee is hired, comply with this law.  A new hire form can be obtained through the Commonwealth Workforce Development System website. This is a standard form that employers need to complete and submit on behalf of a new employee, and include a copy in personnel files as you do with the W-4, I-9 and Local Certificate of Residency. You can manually prepare these forms and fax to 866-748-4473 or mail to: Commonwealth of PA, New Hire Reporting Program, P.O. Box 69400, Harrisburg, PA  17106-9400. You can also submit them via web-upload upon registering with PA CareerLink.  If you have any questions or you would like to discuss this, please give Urish Popeck a call.  
Categories: Advisory

Closing the "Delaware Loophole"

by Steven Sodini 13. April 2012 09:45
The Pennsylvania House has approved a corporate tax reform bill designed to eliminate the "Delaware Loophole," which will “create a more competitive and fair business climate in Pennsylvania”, according to bill sponsor Rep. Dave Reed (R-Indiana). The loophole allows businesses headquartered in other states to avoid paying the state Corporate Net Income (CNI) Tax on their operations in PA. According to the PICPA, House Bill 2150 attempts to eliminate the loophole by requiring companies to “add-back” intangible expenses such as royalties and patent payments that do not have a “valid business purpose” as defined in the legislation. An amendment adopted by members of the House Finance Committee added interest income from a loan made to a related company which must meet the valid business purpose to qualify for a deduction. The bill also lowers the corporate net income tax rate from 9.99 percent to 6.99 percent over a six-year period, gradually uncaps net operating loss carry-forward over an eight-year period, and moves to a single sales factor apportionment for tax years beginning after Dec. 31, 2012.
Categories: Tax

Are YOU Prepared for the New Local Income Tax System?

by Tim Caskey 18. July 2011 10:16
You may have heard about the Pennsylvania State legislature’s plan to restructure and streamline the local earned income tax (EIT) collection system. Act 32, which was passed in 2008, provides for the local EIT to be collected by each county rather than 560 different localities. Each county other than Philadelphia and Allegheny will have one tax collector. Allegheny County, encompassing Pittsburgh and surrounding municipalities, will have four tax collection districts. Philadelphia City/County will continue using its own consolidated tax system. Beginning January 1, 2012, employers will need to follow the new withholding rules and remit local income taxes withheld from employee paychecks to their designated tax collector. Here are the basics of compliance: 1. Each of your employees will fill out the form located at http://www.newpa.com/webfm_send/1738 This form certifies the employee’s address and your place of business, using uniform codes for each municipality. 2. Employers are required to withhold local income tax at a rate which is the higher of: a. The resident EIT rate for the municipality where the employee resides; or b. The non-resident EIT rate for the municipality where the employee is employed. 3. Employers with multiple locations in Pennsylvania may remit all withholding amounts to the county tax collection district where they are headquartered. If you choose this option, you will be required to remit electronically on a monthly basis. 4. For more information, there is an informative FAQ link and other information at http://www.newpa.com/get-local-gov-support/tax-information/dceds-act-32-eit-collection-system
Categories: Tax

Marcellus Shale and Industry Risk Factors

by Tim Marshall 7. July 2011 10:09
Here in Western and Central Pennsylvania, we are reminded daily of the many and complex issues relating to developing the Marcellus Shale gas reserves. Evolving regulatory and legislative actions include environmental policy issues, disputes over regulatory jurisdiction, neighbor vs. neighbor conflicts, and the pending enactment of extraction taxes/impact fees.  The ever-increasing presence of energy companies such as Exxon emphasizes the high stakes and the fact that decisions that are made now can have a lifetime impact on our region’s development and quality of life. As we advise our clients here in Pennsylvania on Marcellus Shale issues, we are also taking into account conditions in the oil and gas industry at large. Risks in the oil and gas industry have never been more pronounced, and regulatory uncertainty and volatile oil and gas prices are at the top of the list. Spills, natural disasters and geopolitical issues have hit the industry in rapid succession over the past year, setting off a wave of regulatory intervention and soaring oil prices. To supplement our locally-based Marcellus knowledge, Urish Popeck professionals are supported by the national knowledge base of BDO’s Natural Resources practice.  They recently published the 2011 BDO Oil and Gas Risk Factor Report.  In it you will find the risk factors listed in the most recent SEC 10-K filings of the 100 largest publicly traded U. S. E&P companies.
Categories: Advisory