Week Ending Feb. 2, 2018

by PICPA Government Relations | Feb 02, 2018

PICPA Urges Delay in Implementation of 1099 Requirement 

In a letter dated Jan. 26, 2018, the PICPA asked the Pennsylvania Department of Revenue to delay implementation of new 1099-MISC withholding and reporting requirements until Jan. 1, 2019.

Act 43 of 2017 ushered in a new and complicated withholding obligation for Pennsylvania businesses. Beginning Jan. 1, 2018, certain payors of Pennsylvania-source income and lessees of Pennsylvania real estate of at least $5,000 to nonresident individuals and single-member LLCs that have a nonresident individual member will be required to withhold Pennsylvania personal income tax on these payments.

“Shifting the burden to businesses to determine the source of income and payments to its nonresident vendors is proving to be a challenge for businesses in Pennsylvania,” wrote Mike Colgan, PICPA CEO and executive director. “The additional administrative burden and compliance costs to businesses are significant, and taxpayers have had very limited time to comply with the new requirement. Moreover, the guidance to date has been murky at best.”

PICPA member and state Rep. Frank Ryan, CPA (R-Lebanon), recently introduced House Bill 2027 that would repeal the requirement in its entirety. Ryan’s bill has been referred to the House Finance Committee.


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A Look at the Week of Feb. 5 in the State Capitol

It's a busy week as both the House and Senate are in session. Gov. Tom Wolf presents his budget for the 2018-2019 fiscal year to a joint session of the General Assembly on Feb. 6. You can watch the governor’s address live here.

Also on Feb. 6, the House Finance Committee will meet to consider House Resolution 291 (study of statewide collection of the earned income tax), House Bill 908 (exempting Olympic winnings from state income tax), and House Bill 2017 (reverses Corporation Tax Bulletin 2017-02 on bonus depreciation). The PICPA supports HB 2017 and has prepared an issue brief for legislators and the public.

On Feb. 7, the House Professional Licensure Committee has a meeting scheduled to consider House Bill 1343 (allows CPE carryover for licensees under the Bureau of Professional and Occupational Affairs) and Senate Bill 892 (amends the Chiropractic Practice Act).

Following this week’s session, the House and Senate appropriations committees begin several weeks of budget hearings. The House is scheduled to return to session on March 12 and the Senate on March 19.

For a complete list of committee meetings, click here.   


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Wolf Nominates Two PICPA Members to State Board of Accountancy

PICPA members Paul J. Kelly III, CPA, and Michael D. Ocker, CPA, were recently nominated by Gov. Tom Wolf to the State Board of Accountancy. The nominees, who must be confirmed by the state Senate, will serve four-year terms.

Kelly, of Lower Gwynedd, Pa., has been a member of the board since 2013. He is an assurance manager for the public service group with CliftonLarsonAllen LLP in Plymouth Meeting, Pa.

Ocker, of Chambersburg, Pa., joined Ocker & Associates PC in 1989, and now owns the firm. Ocker is a board member for the Boys and Girls Club of Chambersburg and Shippensburg, The ARC of Franklin & Fulton Counties, and SpiriTrust Lutheran Home Care & Hospice Inc.


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Inheritance, Sales Tax Measures Clear Senate Committee

The state Senate Finance Committee this week approved bills addressing both the inheritance tax and the sales tax.

House Bill 291, sponsored by Rep. Carl Metzgar (R-Bedford, Somerset), amends the Pennsylvania Tax Reform Code by providing for an exemption from the inheritance tax for a transfer of property to or for the use of a child of 21 years or younger from a natural parent, adoptive parent, or stepparent.

The committee also approved a bill that would allow volunteer fire companies to keep more of the money they generate during fundraisers. Senate Bill 952, sponsored by Sen. Scott Martin (R-Lancaster), would exempt volunteer fire companies from paying sales tax on food and beverages sold during fundraising events.

Both bills go to the full Senate for consideration.


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IFO Gives Midyear Budget Update

The Independent Fiscal Office (IFO) released a midyear update of its revenue estimate for fiscal year (FY) 2017-2018. The revised estimate is $34.780 billion, which is $35 million higher than the IFO’s November 2017 estimate.

As part of the update, the IFO provides an advance look at revenue projections for the next fiscal year. For FY 2018-2019, revenues are projected to be $33.914 billion, a decrease of 2.5 percent over the current year.

The presentation also addresses the impact of recent federal tax law changes on the Pennsylvania budget. The changes affect estimates for corporate net income, personal income, and sales tax revenues in FY 2017-2018 and FY 2018-2019.

The IFO will update the estimate in its next round of revenue projections to be released in early May.


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Senate Passes Economic Development, Clean Energy Initiative

The state Senate overwhelmingly approved legislation that would generate significant economic development, create jobs, and enhance Pennsylvania’s clean energy portfolio.

Senate Bill 234, sponsored by state Sen. John Blake (D-Lackawanna/Luzerne/Monroe), would establish a Pennsylvania Property Assessed Clean Energy (PACE) program, a financing mechanism that enables low-cost, long-term funding for efficiency, renewable energy, and water conservation upgrades to commercial, agricultural, or industrial properties.

Under the bill, a local government would be able to choose to participate in or develop a PACE financing program. PACE financing would not require any public funds; participating local communities would be tasked with collecting the assessment on the improved building and remit it for payment on the debt incurred from the building’s energy-efficiency and clean energy technology upgrades.

The bill goes to the House for consideration.


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Growing Greener III Program Gains Senate Approval

Legislation that would create a framework for the Growing Greener III program to better protect Pennsylvania’s natural resources was approved this week by the state Senate.

Senate Bill 799, sponsored by Sen. Rich Alloway (R-Franklin, Adams), was amended to add a proposal to authorize a new Growing Greener program to support critical environmental and quality-of-life projects in communities throughout the state. SB 799 would establish a framework to ensure the program will continue to fund vital environmental projects well into the future.

Created in 1999, the original Growing Greener program has funded hundreds of environmental projects, including local parks and trails, open space preservation, farmland preservation, flood mitigation, stream and waterway restoration, watershed protection initiatives, and drinking and wastewater treatment improvements.

The bill was sent to the state House for consideration.


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Ohio Amnesty Program Winding Down

The Ohio Department of Taxation is reaching out to Pennsylvania tax practitioners who know of clients with an unreported or underreported Ohio tax liability who may qualify for the Ohio Tax Amnesty program, which ends at the close of business on Feb. 15.

Individuals or businesses who qualify for amnesty will pay no penalty and only half of the normal interest. The amnesty is available for most major taxes, including the state income tax, sales and uses taxes, and commercial activity tax, and for taxes due before May 1, 2017. Interested parties are required to file all applicable returns and pay in full before the amnesty ends.

For more information, visit www.Ohiotaxamnesty.gov or call (800) 304-8211.


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The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest and fourth-largest state CPA organization in the United States.

Learn more about how you can become involved in the legislative process, through PICPA's Key Contact Program and CPA-PAC.

Contact the Government Relations Team at governmentrelations@picpa.org or (717) 232-1821.

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Harrisburg, PA 17101