Marcum LLP
Insights

Tax Flash - State & Local Taxation

 

In This Edition

Pennsylvania Governor Tom Wolf Signs Tax Budget Bill

Contributor: Anthony Zalaf, Staff Accountant, Tax & Business Services

Share:

On October 30, 2017, Pennsylvania Governor Tom Wolf signed into law House Bill 542, a $1.6 billion revenue bill aimed at addressing the state's $2.3 billion budget deficit. Most of the anticipated revenue for this bill comes from borrowing against future revenues due the state from the 1998 National Tobacco settlement.

Highlights of the House bill include:

  • Removing the $5 million cap on net operating loss (NOL) deductions and increasing the percentage cap (currently 30% of taxable income) to 35% in 2018 and 40% in 2019 and thereafter.
  • By March 1, 2018, requiring remote sellers, marketplace facilitators, and referrers (Amazon, eBay, etc.) with aggregate Pennsylvania sales of $10,000 or more in the previous calendar year to elect either to: (1) collect and remit the sales tax; or (2) comply with new Pennsylvania notice and reporting rules. This is similar to provisions adopted earlier this year in Massachusetts, Minnesota, Rhode Island, and Washington.
  • Excluding separately invoiced help desk and call center support services from the sales tax by expanding the definition of “tangible personal property,” effective immediately.
  • Shortening the time a taxpayer has to file a petition with the Board of Finance Revenue (BFR) to appeal a Board of Appeals (BOA) decision from 90 days to 60 days. This provision becomes effective December 29, 2017, and is estimated to generate additional revenues of $20 million annually for the state.

In addition, House Bill 542 does the following:

  • Expands the sales and use tax exemption for wrapping supplies to now include beer kegs.
  • Extends the application date for additional Keystone Opportunity Zones that are currently available from October 2016 to October 2018.
  • Requires entities paying nonresidents more than $5,000 in rent and royalties on Pennsylvania property to withhold personal income tax on those payments.
  • Requires companies that bring out-of-state independent contractors into Pennsylvania for work and pay them more than $5,000 to withhold Pennsylvania personal income tax on that compensation.
  • Modifies the Manufacturing Innovation and Reinvestment deduction.

While House Bill 542 will create additional revenues for the Commonwealth, Pennsylvania had to borrow $1.5 billion against future revenues in order to balance the state's budget, so taxpayers should expect additional changes in 2018 and beyond.

Please contact your Marcum State and Local Tax advisor should you have any questions related to this new legislation.

 
Contributor
 
 
 
HAVE A QUESTION? ASK MARCUM
 
STAY IN TOUCH.

SIGN UP TODAY FOR MARCUM'S NEWSLETTERS.

ABOUT MARCUM LLP

Marcum LLP is one of the largest independent public accounting and advisory services firms in the nation, with offices in major business markets throughout the U.S., as well as Grand Cayman, China and Ireland.

Learn More

CONNECT WITH US
OFFICES

Headquarters
750 3rd Avenue, 11th Floor
New York, NY 10017

Find an Office

(855) MARCUM1
info@marcumllp.com

FOUNDATION

Marcum Foundation

AFFILIATIONS

Leading Edge Alliance

Privacy Policy

This website uses cookies to learn how visitors interact with our website so that we can improve our services and your online experience. By using this website, you agree to our privacy policy.