Wolf Signs PICPA-Backed Local Tax Measure into Law
Gov. Tom Wolf signed several bills into law this week, including a local tax measure sponsored by Rep. Zach Mako (R-Lehigh, Northampton) and championed by the PICPA. House Bill 2058, now Act 17 of 2022, aligns the filing deadline for local earned income tax and net profits tax returns with the deadline to file state personal income tax returns. The new law takes effect immediately and applies to returns due after the effective date.
Wolf also signed into law the following:
- Senate Bill 478: Amends the act authorizing political subdivisions, municipality authorities, and transportation authorities to enter into contracts for the purchase of goods and the sale of real and personal property where no bids are received.
- Senate Bill 479: Amends the Municipalities Financial Recovery Act.
- Senate Bill 1020: Permits land exchanges between the state and certain individuals so that certain lands can be incorporated into state park lands.
- House Bill 221: Amends act authorizing Pennsylvania and local governments to preserve, acquire, or hold land for open space uses.
- House Bill 245: Amends the Medical Practice Act of 1985.
In addition to these signatures, Wolf vetoed House Bill 1184, which would have authorized the creation of new boroughs from any area of a municipality by petition to the court of common pleas.
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PICPA Sits with State Leaders to Get Your Questions Answered
If there was ever any doubt that PICPA continually pushes for you and your profession in Harrisburg, the proof of the effort – and your influence – has been reinforced over the past couple weeks. At the end of March we held an exclusive Q&A session with Pennsylvania Gov. Wolf to press our concerns and get the answers you need. This was followed by an update with Pennsylvania House Speaker Bryan Cutler (R-Lancaster). If you missed these sessions, recordings of these sessions are housed on our Advocacy Overview & Legislative Priorities webpage.
Next month, we have yet another opportunity for members to engage with state leadership. The PICPA government relations team will host an in-depth virtual discussion with Rep. Matthew Bradford (Montgomery), Democrat chair of the House Appropriations Committee, on May 26, from 10:00 a.m. to 11:00 a.m. Registration is now open. This PICPA State Advocacy Update will examine the 2022-2023 state budget, related tax proposals, and how state lawmakers plan to spend the remaining federal stimulus dollars.
As a final reminder, there is still time to register for the May 3 webcast with the Philadelphia Department of Revenue for an offers-in-compromise program overview. The program will run from 10:00 a.m. to 11:00 a.m.
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DOR Equipment Rental SUT Bulletin Reviewed by PICPA
Pennsylvania Sales and Use Tax Bulletin 2021-05 covers the taxation of equipment rentals as well as equipment rentals with operators. The bulletin was issued Nov. 2, 2021, and was effective immediately. Recently, Mark Balistrieri, CPA, director, state and local tax, with KPMG LLP in Pittsburgh and chair of PICPA’s Sales and Use Tax Thought Leadership Committee, provided insight and guidance on the bulletin in a CPA Now blog post.
For more information on how you can get involved in one of PICPA’s thought leadership committees, contact the PICPA government relations team at email@example.com.
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Film Tax Credit Program Focus of Senate Hearing
The Pennsylvania Senate Finance Committee held a public hearing in Pittsburgh on the expansion of the state’s film tax credit program. Pennsylvania's film tax credit has existed since 2007 and is currently funded at $70 million.
Senators heard from several champions for expanding the program, including local labor unions and the director of the Pittsburgh Film Office.
Sen. Camera Bartolotta (R-Washington) has introduced legislation to increase the amount of the program to $125 million. Senate Bill 321 is pending in the Finance committee. Bartolotta is working to include an increase as part of this year’s budget.
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Senators Unveil Plan to Improve Nursing Home Transparency
A new package of legislation proposed by state Sens. Maria Collett (D-Montgomery, Bucks) and Nikil Saval (D-Philadelphia) will bring greater transparency, accountability, and support to residents and staff at Pennsylvania’s nursing homes to help ensure high-quality, lifesaving care for seniors.
In Pennsylvania, nursing home residents and their loved ones often lack access to information about providers, while incomplete reporting requirements mean the legislature also lacks the data to fully address providers’ funding needs. The proposed legislation claims to fill the holes in Pennsylvania’s current system, ensuring accountability along the continuum of care, say Collett and Saval.
The legislative package will include four bills, which will require consolidated financial reports for licensed operators and their related business entities to be submitted annually to providers’ licensing departments and require a minimum of 75% of all state funding for skilled nursing facilities go to direct bedside care.
One bill will require complete ownership information for each individual or entity that owns more than a minimum reporting threshold (established within the bill) of the operating, parent, or related businesses of the skilled nursing facility.
Another bill in the package will prohibit the licensure of facilities that have a majority or controlling interest in related businesses/parent companies that have a history of closing skilled nursing facilities in Pennsylvania or across the country, unless granted special relief from these requirements.
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AICPA Urges Support for Supply Chain Disruption Relief Act
The AICPA Tax Executive Committee recently submitted a letter in support of continued efforts by Congress to provide tax relief to automobile dealers in their struggles to replace inventories in the wake of disruptions in foreign trade and the global supply chain.
In a letter dated April 14, 2022, to U.S. Reps. Dan Kildee (D-MI) and Jodey Arrington (R-TX), the AICPA offered its support to provide tax relief to automobile dealers who use the last-in first-out (LIFO) accounting method. The letter specifically called attention the AICPA’s support of the Supply Chain Disruptions Relief Act, which would allow dealerships to choose to wait until as late as 2025 for their inventory to be replaced to determine the income attributable to the sale of inventory during 2020 or 2021.
The letter goes on to highlight the need for the U.S. Treasury Department to offer Section 473 relief to eligible taxpayers. Section 473 authorizes Treasury and the IRS to permit taxpayers to reduce the unanticipated income from a qualified liquidation of LIFO inventories by replacing the inventory over a three-year period.
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IFO Updates Property Tax Replacement Estimates
The Independent Fiscal Office (IFO) updated its revenue estimates for potential property tax replacement proposals. The update was prompted by a request from Rep. Frank Ryan (R-Lebanon).
According to its analysis, IFO estimates that 58% of statewide property taxes are paid by homeowners if all Act 1 allocations are also included. Furthermore, results of an American Community Survey show that senior homeowners (age 65 or older) remit 30% of property taxes paid by homeowners throughout the state. Therefore, the IFO estimates that senior homeowners paid $2.73 billion in school property taxes.
The report also updates IFO’s estimates for potential replacement revenue sources if school district property taxes were eliminated, as proposed by Ryan’s House Bill 13.
House Bill 13 proposes to eliminate school property taxes and replace the lost revenue accordingly:
- An additional sales and use tax of 2% on all currently taxable items that would be paid to the county and distributed to local school districts.
- A new sales tax of 2% on food and clothing that would be sent to the counties to then distribute to the local school districts.
- A personal income tax of 1.85% paid directly to the local school district, in addition to the current state personal income tax of 3.07%, for a total personal income tax of 4.92%.
- Expand the personal income tax to include retirement income, with certain exemptions.
The bill is pending in the House Finance Committee.
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