Week Ending Jan. 24, 2020

Jan 24, 2020

Rep. Peifer Readies Amendments to CPA Law

State Rep. Mike Peifer (R-Pike) will introduce legislation that provides several necessary updates and revisions to Pennsylvania’s CPA Law.

Specifically, Peifer’s legislation will codify the nationally recognized Code of Professional Conduct standards, expand the scope of classes students can take toward earning an accounting degree, and strengthen the peer review requirements on CPA firms. In his co-sponsorship memo to colleagues, Peifer said the legislation will enable “our accountants to continue meeting the financial needs of taxpayers in a rapidly evolving industry.”

PICPA supports the measure and is asking other lawmakers to co-sponsor the bill.


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House Speaker Turzai Will Not Seek Reelection

Pennsylvania House Speaker Mike Turzai (R-Allegheny), one of the state’s most powerful legislators, announced this week that he will not seek reelection in 2020. Turzai is in his 10th term as state representative for the 28th legislative district and is serving his third term as speaker of the state House.

“It's been an honor to represent people, but there's a time to pass on the torch. I'm coming to the end of this journey. I'm not running for reelection," said Turzai at a press conference.

Turzai is the 16th state lawmaker to announce that he or she would not be seeking reelection this year. 


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The Week of Jan. 27 in the General Assembly

The state Senate returns to session on Jan. 27, while the House will be in recess.

Senators will welcome Senator-elect Dave Arnold of the 48th Senatorial District this week. Arnold won a Jan. 14 special election to represent all of Lebanon County and parts of Dauphin and York counties. Arnold has served as Lebanon County district attorney for 14 years.

The Senate Majority Policy Committee convenes on Jan. 27 for a public hearing on the implementation of the 2019 election reforms. On Wednesday, the Senate Democratic Policy Committee will convene a public hearing on corporate tax reform.

On Tuesday, the Senate Labor and Industry Committee will host a public hearing to gather testimony on Senate Bill 580, legislation that would establish the Pennsylvania Family and Medical Leave Insurance Act.

Here is a list of upcoming meetings and public hearings for the Pennsylvania General Assembly. 


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Telecommunications and Electric Gross Receipts Tax Bulletin

The Pennsylvania Department of Revenue issued Corporation Tax Bulletin 2020-01, Telecommunications and Electric Gross Receipts Tax – Sales for Resale on Jan. 23. This bulletin prescribes a new methodology for claiming a sale for resale exemption related to telecommunications and electricity gross receipts taxes. Resellers must obtain newly created forms from the Department of Revenue (DOR) prior to the July 1, 2020, effective date.

To assist taxpayers in complying with the sale for resale rules, the DOR developed a Sale for Resale Acknowledgement Form that resellers can provide to suppliers that are claiming an exemption. Revenue will supply an acknowledgement form to each qualified reseller by June 15, 2020. A reseller must then provide the acknowledgement form to a supplier so that the supplier may substantiate a resale deduction. The form will be applicable through June 30, 2021. The acknowledgement forms will be supplied to each reseller in June each year thereafter.

This bulletin will apply to sales of telecommunications and/or electricity after July 1, 2020.


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Performance-Based Budget Board Convenes

The Performance-Based Budget Board held two days of public hearings this week. Act 48 of 2017 established the board and requires the Independent Fiscal Office (IFO) to develop performance-based budget plans for all agencies under the governor's jurisdiction and conduct tax credit reviews once every five years.

The state agencies that were reviewed included the Pennsylvania Emergency Management Agency, Department of State, Department of Environmental Protection, Department of Community and Economic Development, Department of Health, and Department of Human Services.

Reviews were provided by the IFO for the Organ and Bone Marrow Donor tax credit, the Mobile Telecom Broadband Investment tax credit, the Research and Development tax credit, and the Keystone Innovation Zone tax credit.

All reports are available on IFO’s website.


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Bill Would Help Communities with Tax-Exempt Properties

Rep. Robert Freeman (D-Northampton) introduced a bill to financially help municipalities with high levels of tax-exempt property. It cleared its first hurdle when the House Local Government Committee reported out the bill by a 22-1 vote.

House Bill 1677 would establish the Tax-Exempt Property Municipal Assistance Fund to help communities that have 15% or more of their total assessed property value as tax-exempt property within their borders. It would be funded by the state's existing 18% liquor tax, known as the Johnstown Flood Tax.

The legislation would require each county to annually provide the state with information regarding the assessed value of tax-exempt properties within each municipality of the county. The funding formula would be based on the assessed value of those properties as if they were taxable. No municipality would receive more than 10% of the total revenue in the fund, and property owned by the municipality itself would not be eligible for compensation.

The bill now goes to the full House for consideration.


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Proposals to Reform and Update PASSHE

Curt Sonney (R-Erie), House Education Committee chair, and Reps. Jesse Topper (R-Bedford/Franklin/Fulton) and Meghan Schroeder (R-Bucks) unveiled a package of bills designed to reform the Pennsylvania State System of Higher Education (PASSHE). House Bills 2171, 2172, and 2173 have all been referred to the House Education Committee.

PASSHE is the largest provider of higher education in Pennsylvania. Since its formation in 1982, it has provided undergraduate, graduate, and career-development programs to the public. However, despite significant changes to the landscape of higher education, PASSHE’s enabling legislation, Act 188 of 1982, has not been significantly updated since its initial enactment, and the bill sponsors say statutory and regulatory constraints are imposing additional costs and creating inefficiencies that restrict PASSHE’s ability to respond to market conditions.

To address the challenges that threaten the sustainability of its operations, PASSHE embarked on a system redesign in 2016.


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