Tax clarity needed
Pennsylvania businesses have been facing a troublesome tax situation. A state Supreme Court decision dismantled the traditional framework for determining the business privilege tax (BPT) and established the potential for double taxation of receipts for companies conducting business in multiple jurisdictions.
The Pennsylvania Institute of Certified Public Accountants (PICPA) applauds the state House for overwhelmingly approving a measure that would clarify when a political subdivision may levy a BPT and eliminate the potential for double taxation.
House Bill 1513 passed the House on Oct. 16 and will likely be referred to the Senate Finance Committee. The bill defines “base of operations” and clarifies the scope of transactions that may be subject to the local BPT. It also provides that any gross receipts subject to tax through a base of operations shall not include any receipts subject to tax measured by conducting transactions for all or part of 15 or more calendar days within the calendar year.
This legislation is critical to the business community because it restores clarity and predictability to assessment of the BPT. PICPA strongly supports HB 1513 because it is consistent with our guiding principle of good tax policy. If enacted, it would apply to taxable years beginning on or after Jan. 1, 2014.
Rep. George Dunbar, R-Penn Township, is the bill’s prime sponsor. We encourage the Senate to act quickly on this bill to ensure that the Pennsylvania business climate remains fair, reasonable and favorable.
Robert F. Firely
The writer, a CPA, is president of the Pennsylvania Institute of Certified Public Accountants (picpa.org).