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

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