Week Ending Jan. 11, 2019

Jan 11, 2019


Peifer Chosen to Lead House Finance Committee 

State Rep. Mike Peifer (R-Pike/Wayne) will serve as majority chair for the House Finance Committee for the 2019-2020 Legislative Session.

“With my accounting background, I am uniquely qualified to help modernize and develop consistent and fair tax policy for the people and businesses of the Commonwealth,” Peifer said. “While also serving as the chairman of the Pennsylvania Higher Education Assistance Agency (PHEAA), I have the opportunity to stress the importance of a strong financial literacy foundation for students to help achieve their career goals.”

Peifer graduated from Rider University in 1990 with a degree in accounting. He pursued his accounting career with Price Waterhouse LLP, qualifying as a CPA in 1991. In 1995 he opened his own accounting and tax firm, Michael T. Peifer CPA, and was elected to the state House in 2006.

On the Democratic side, State Rep. Jake Wheatley (D-Allegheny) will retain the top position on the Finance Committee, as he was named the Democratic chair for another two-year term.

“I intend to continue to work closely with my counterpart, Rep. Michael Peifer, to ensure that the voices and interests of all Pennsylvanians are represented in the deliberations of our committee, and to build on the strong culture of bipartisanship we have established,” Wheatley noted.

The Finance Committee oversees matters relating to taxation and fiscal policy, investment of the Commonwealth’s money, and regulations of the Department of Revenue.

 

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Revenue Department Issues Wayfair Clarification

The Pennsylvania Department of Revenue issued Sales and Use Tax Bulletin 2019-01, Maintaining a Place of Business in the Commonwealth, on Jan. 8, 2019. This bulletin is intended to clarify when marketplace and remote sellers, marketplace facilitators, and all other vendors maintain a place of business in Pennsylvania, and is a follow-up on last year’s U.S. Supreme Court opinion in South Dakota v. Wayfair Inc.

The court’s decision upheld South Dakota’s economic nexus statute and overturned Quill Corp. v. North Dakota, which had required a business to have a physical presence in a state for it to be required to collect that state’s sales tax. The decision in Wayfair, read in conjunction with the state Tax Reform Code, creates an economic nexus for certain sellers of products in Pennsylvania, where previously nexus existed only for those with a physical presence.

The provisions of this bulletin shall apply to transactions that occur on or after July 1, 2019, and do not affect marketplace sellers for whom marketplace facilitators collect and remit on their behalf. Additional procedural and technical guidance, as well as the available certified service providers, will be available on the Department of Revenue’s website.

 

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PICPA Member State Lawmakers Introduce Tax Bills

The PICPA government relations team and our key committees are in the process of sifting through hundreds of co-sponsorship memos and identifying important proposals to members. The following is a quick look at bills that have been or will be introduced in the near future by PICPA member state legislators.  

PICPA member Sen. Pat Browne, CPA (R-Lehigh), plans to introduce legislation that will conform Pennsylvania’s personal income tax to the Federal Opportunity Zones Program, which was enacted as part of the federal Tax Cuts and Jobs Act in 2017. By conforming to federal rules that allow for the tax deferral/elimination of only those capital gains associated with the Opportunity Zones Program, Browne says the state can direct private investment where it is needed most while being fiscally responsible at the same time. Browne introduced similar legislation (Senate Bill 1197) last session, but it died in committee.

Across the hall in the state House, PICPA member Rep. Frank Ryan, CPA (R-Lebanon), introduced House Bill 17. The bill will establish a 10-year time period for the Pennsylvania Department of Revenue to collect assessed personal income tax.

PICPA member Rep. Keith Greiner, CPA (R-Lancaster), is set to reintroduce his legislation to clarify and streamline recent changes made to the withholding of nonresident income for personal income tax purposes. This was House Bill 2413 last session.

 

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2019-2020 Legislative Committee Chairs Appointed

After weeks of anticipation, committee chairs from all chambers were announced. Committees are the backbone of the legislative process as they vet all bills before they can advance to the full House or Senate. Here are the appointed leaders of this session’s standing committees:

House Standing Committee Chairs  Senate Standing Committee Chairs 
Aging and Older Adult Services
Rep. Thomas Murt (R-Montgomery)
Rep. Steve Samuelson (D-Northampton)

Agriculture and Rural Affairs
Rep. Martin Causer (R-Potter)
Rep. Eddie Day Pashinski (D-Luzerne)

Children and Youth
Rep. Karen Boback (R-Luzerne)
Rep. Joseph Petrarca (D-Westmoreland)

Commerce
Rep. Mark Keller (R-Perry)
Rep. John Galloway (D-Bucks)

Consumer Affairs
Rep. Brian Ellis (R-Butler)
Rep. Rob Matzie (D-Beaver)

Education
Rep. Curt Sonney (R-Erie)
Rep. James Roebuck (D-Philadelphia)

Environmental Resources and Energy
Rep. Daryl Metcalfe (R-Butler)
Rep. Greg Vitali (D-Delaware)

Ethics
Rep. Frank Farry (R-Bucks)

Finance
Rep. Michael Peifer (R-Wayne)
Rep. Jake Wheatley (D- Allegheny)

Game and Fisheries
Rep. Keith Gillespie (R-York)
Rep. William Kortz (D-Allegheny)

Gaming Oversight
Rep. Jim Marshall (R-Beaver)
Rep. Scott Conklin (D-Centre)

Health
Rep. Kathy Rapp (R-Forest)
Rep. Dan Frankel (D-Allegheny)

Human Services
Rep. Gene DiGirolamo (R-Bucks)
Rep. Angel Cruz (D-Philadelphia)

Insurance
Rep. Tina Pickett (R-Bradford)
Rep. Tony Deluca (D-Allegheny)

Judiciary
Rep. Rob Kauffman (R-Franklin)
Rep. Tim Briggs (D-Montgomery)

Labor and Industry
Rep. Jim Cox (R-Berks)
Rep. Patrick Harkins (D-Erie)

Liquor Control
Rep. Jeff Pyle (R-Armstrong)
Rep. Dan Deasy (D-Allegheny)

Local Government
Rep. Dan Moul (R-Adams)
Rep. Bob Freeman (D-Northampton)

Professional Licensure
Rep. Dave Hickernell (R-Lancaster)
Rep. Harry Readshaw (D-Allegheny) 

State Government
Rep. Garth Everett (R-Lycoming)
Rep. Kevin Boyle (D-Philadelphia)

Tourism and Recreational Development
Rep. David Millard (R-Columbia)
Rep. Mark Longietti (D-Mercer)

Transportation
Rep. Tim Hennessey (R-Montgomery)
Rep. Mike Carroll (D-Luzerne)

Urban Affairs
Rep. Sue Helm (R-Dauphin, Lebanon)
Rep. Thomas Caltagirone (D-Berks)

Veterans Affairs and Emergency Preparedness
Rep. Stephen E. Barrar (R-Delaware)
Rep. Christopher Sainato (D-Lawrence) 
Aging & Youth
Sen. John DiSanto (R-Dauphin)
Sen. Maria Collett (D-Montgomery)

Agriculture and Rural Affairs
Sen. Elder Vogel Jr. (R-Beaver)
Sen. Judy Schwank (D-Berks)

Appropriations 
Sen. Pat Browne, CPA (R-Lehigh)
Sen. Vincent Hughes (D-Philadelphia)

Banking and Insurance
Sen. Don White (R-Indiana)
Sen. Sharif Street (D-Philadelphia)

Communications and Technology
Sen. Wayne Langerholc Jr. (R-Cambria)
Sen. Steve Santarsiero (D-Bucks)

Community, Economic and Recreational Development
Sen. Mario Scavello (R-Monroe)
Sen. Larry Farnese (D-Philadelphia)

Consumer Protection and Professional Licensure
Sen. Robert Tomlinson (R-Bucks)
Sen. Lisa Boscola (D-Northampton)

Education
Sen. Ryan Aument (R-Lancaster)
Sen. Andrew Dinniman (D-Chester)

Environmental Resources and Energy
Sen. Gene Yaw (R-Lycoming)
Sen. John Yudichak (D-Luzerne)

Finance 
Sen. Scott Hutchinson (R-Venago)
Sen. John Blake (D-Lackawanna)

Game and Fisheries
Sen. Dan Laughlin (R-Erie)
Sen. James Brewster (D-Allegheny)

Health and Human Services
Sen. Michele Brooks (R-Mercer)
Sen. Art Haywood (D-Montgomery)

Intergovernmental Operations
Sen. Judy Ward (R-Blair)
Sen. Wayne Fontana (D-Allegheny)

Judiciary
Sen. Lisa Baker (R-Luzerne)
Sen. Daylin Leach (D-Montgomery)

Labor and Industry 
Sen. Camera Bartolotta (R-Washington)
Sen. Christine Tartaglione (D-Philadelphia)

Law and Justice 
Sen. Pat Stefano (R-Fayette)
Sen. James Brewster (D-Allegheny)

Local Government 
Sen. Scott Martin (R-Lancaster)
Sen. Tim Kearney (D-Delaware)

Rules and Executive Nominations 
Sen. Jake Corman (R-Centre)
Sen. Jay Costa (D-Allegheny)

State Government
Sen. Mike Folmer (R-Lebanon)
Sen. Anthony Williams (D-Philadelphia)

Transportation
Sen. Kim Ward (R-Westmoreland)
Sen. John Sabatina Jr. (D-Philadelphia)

Urban Affairs and Housing
Sen. Tom Killion (R-Delaware)
Sen. Katie Muth (D-Montgomery)

Veterans Affairs and Emergency Preparedness
Sen. Mike Regan (R-Cumberland)
Sen. Lindsey Williams (D-Allegheny)

 

 

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Wolf Establishes First Statewide Goal to Reduce Carbon Pollution

Gov. Tom Wolf signed a new executive order establishing the first statewide goal to reduce carbon pollution in Pennsylvania. The executive order establishes the GreenGov Council to boost green and sustainable practices in state government, save taxpayers money, and create jobs in the state’s clean energy economy.

Pennsylvania will work to achieve a 26 percent reduction in greenhouse gas emissions by 2025 (from 2005 levels) and an 80 percent reduction by 2050. The GreenGov Council will work with all state agencies to reduce energy use in state government and improve the energy efficiency of state buildings and vehicles, saving taxpayers money in the process.

The GreenGov Council will serve as a central coordinating body to promote the implementation of the executive order and the achievement of the following state agency performance goals:

  • Reduce overall energy consumption by 3 percent per year (and 21 percent by 2025) as compared to 2017 levels.
  • Replace 25 percent of the state passenger car fleet with battery electric and plug-in electric hybrid cars by 2025.
  • Procure renewable energy to offset at least 40 percent of Pennsylvania’s annual electricity use.

The GreenGov Council will encourage and coordinate the incorporation of environmentally sustainable practices into government policy, planning, operations, procurement, and regulatory functions, and strive for continuous improvement in efficiency and performance.

 

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Harris Names Deputy Whips for Legislative Session

House Democratic Whip Rep. Jordan Harris (D-Philadelphia), named Rep. Austin Davis (D-Allegheny), Rep. Tina Davis (D-Bucks), Rep. Pam DeLissio (D-Montgomery/Philadelphia), Rep. Marty Flynn (D-Lackawanna), Rep. Patty Kim (D-Dauphin), and Rep. Pam Snyder (D-Greene), as deputy whips for the 2019-2020 legislative session.

“Their experience and relationships with other caucus members will be instrumental in helping us operate efficiently and I’m excited to move forward with them,” Harris said.

The whip is considered the second-in-command in the caucus, and is responsible for making sure that party’s members attend session and generally understand the specifics of legislation and procedural votes in the House. Harris previously named Rep. Ryan Bizzarro (D-Erie) and Rep. Jared Solomon (D-Philadelphia) as chief deputy whips, and Rep. Donna Bullock (D-Philadelphia) as assistant whip.

The deputy whips assist the whip on the House floor in ensuring members are present for votes and in tallying support prior to a vote.

 

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State Revenue Collections Grow in December

Pennsylvania collected $2.9 billion in General Fund revenue in December, which was $70.1 million, or 2.5 percent, more than anticipated. Fiscal year-to-date General Fund collections total $15.3 billion, which is $403.7 million, or 2.7 percent, above estimate. Since the start of the 2018-2019 fiscal year, overall tax revenue is $934.7 million, or 6.7 percent, more than was collected in the same period of the last fiscal year.

Sales tax receipts totaled $935.2 million for December, $23.2 million above estimate. Year-to-date sales tax collections total $5.6 billion, which is $163.2 million, or 3 percent, more than anticipated.

Personal income tax (PIT) revenue in December was $972.4 million, $132.4 million below estimate. This brings year-to-date PIT collections to $5.9 billion, which is $203.4 million, or 3.3 percent, below estimate.

December corporation tax revenue of $577.9 million was $87.5 million above estimate. Year-to-date corporation tax collections total $1.7 billion, which is $294.6 million, or 21.6 percent, above estimate.

Read the Independent Fiscal Office’s Monthly Trends Report.

 

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Special Election Dates Set for Open State House, Senate Seats

Speaker of the House Mike Turzai (R-Allegheny) ordered two special elections to be held on Tuesday, March 12, to fill the vacant seats in the 114th Legislative District in Lackawanna County and the 190th Legislative District in Philadelphia County.

The vacancies were created by the passing of former Rep. Sid Kavulich (D-Lackawanna) on Oct. 16 and the Dec. 11 resignation of former Rep. Vanessa Lowery Brown (D-Philadelphia) after her conviction on seven charges related to a bribery case, six of which were felonies. In both instances, the former members were unopposed on the ballot this past election, resulting in vacancies in both legislative districts.

Outgoing Lt. Gov. Mike Stack announced April 2 as the special election date to fill the open state Senate seat vacated by Rep. Guy Reschenthaler (R-Allegheny). In November, Reschenthaler was elected to represent the 14th Congressional District in the U.S. House. He represented the western Pennsylvania district since 2015.

Candidates will be selected by a process designated by their respective political parties, and the winners of the special elections will take office after the results are certified.

 

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Public Pension Commission Releases Report on Reforms

After an extensive seven-month examination of Pennsylvania’s two statewide pension systems, the Public Pension Management and Asset Investment Review Commission (PPMAIRC) unveiled its final report with recommendations.

The report identifies almost $10 billion in savings opportunities and proposes other reform measures focused on cost efficiency and increased transparency of the Pennsylvania Public School Employees’ Retirement System and the State Employees’ Retirement System. This recommendations include the following:

  • Maintaining full payment of the annual actuarially determined contribution amount
  • Establishing a consolidated Central Investment Office for both pension funds
  • Enacting legislation mandating annual stress testing
  • Moving to fully index all public market investments in both public equities and fixed income
  • Establishing transparent policies at both system boards that favor and encourage more open public reporting
  • Enacting legislation mandating increased public reporting of all investment expenses
  • Adopting measures to reduce risk, including reducing exposure to illiquid private investments

PPMAIRC was established in 2017 under the broader pension reforms of Act 5 of 2017 to conduct a comprehensive review of PSERS and SERS investment management.

 

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About PICPA

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.

Money & Life Tips are a joint effort of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA), as part of the profession’s nationwide 360 Degrees of Financial Literacy program.


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