Week Ending May 15, 2020

May 15, 2020

PICPA Loan Forgiveness Bill Clears Hurdle in Senate

PICPA-supported legislation addressing state tax issues related to the federal CARES Act cleared another hurdle this week when the state Senate Finance Committee unanimously approved House Bill 2408. The bill, which the state House passed unanimously last week, includes a provision sought by the PICPA to clarify that loans forgiven under the federal Paycheck Protection Program (PPP) are not included in the taxable income of individuals, pass-through entities, or other persons subject to state personal income tax and the Local Tax Enabling Act.

House Bill 2408 also would exempt federal coronavirus stimulus funds from state and local taxation, and increase the limit on funds allowed to be expended by a nonprofit corporation or charitable trust from an endowment from 7% to 10% for a calendar year.

The Senate committee also reported two other bills. Senate Bill 1100 would ensure Pennsylvanians who receive federal stimulus payments do not lose state-related benefits because of an increase in income. Senate Bill 1041 clarifies how farmers can qualify for sales tax exemptions for off-road vehicles used in farming operations.

The bills are in the Senate Appropriations Committee.


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COVID-19 and Pennsylvania’s Pandemic Unemployment Assistance Webinar

The PICPA will host the Pennsylvania Department of Labor and Industry (L&I) for a one-hour webinar on the Pandemic Unemployment Assistance (PUA) system. The session, scheduled for Tuesday, May 26, will include L&I Secretary Jerry Oleksiak as one of the presenters.

Register now for the webinar. It is free for PICPA members and nonmembers.


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Lawmakers Send Bills to Reopen Multiple Business Sectors to Governor

State House and Senate lawmakers approved a package of bills that supporters say will aid Pennsylvania’s road to recovery ahead of Gov. Tom Wolf’s timeframe. Getting the governor’s signature will not be easy since only one of the bills passed with overwhelming bipartisan support. The others are likely destined for a veto.

Senate Bill 327 gives county governments the option to develop and implement individual plans to mitigate the spread of COVID-19 and safely reopen their local economies if they comply with Centers for Disease Control and Prevention (CDC) and state Department of Health employee safety guidelines. Senate Bill 327 also includes a COVID-19 emergency regulatory tolling provision that would require any regulation not finally approved or disapproved to be suspended in place until 90 days after the emergency order is lifted. Additionally, the bill creates a COVID-19 cost and recovery task force. Wolf vetoed a similar bill last month.

House Bill 2388 would allow several sectors of the state’s economy to resume under current CDC guidelines. As amended in the Senate, House Bill 2388 would allow the following industries to resume in Pennsylvania:

  • Vehicle dealers
  • Manufacturing operations
  • Lawn and garden centers
  • Salons and barber shops
  • Messenger services
  • Animal groomers

Additionally, House Bill 2412 would allow licensed real estate activities, including settlement services, and legal services to resume, and House Bill 327 would permit the sale of prepared beverages and mixed drinks for off-premise consumption during the COVID-19 disaster emergency by those possessing a valid restaurant or hotel liquor license. Wolf has indicated he will sign into law House Bill 327.


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Senate Approves CARES Act Funds for Older Adults, First Responders

The Pennsylvania Senate approved legislation that appropriates $538 million in federal CARES Act emergency funding for state programs and services. The bill allocates $507 million to support a variety of programs and services for senior citizens and $31 million for a one-time grant program for volunteer fire and EMS companies.

The $507 million in “Caring for Those Who Care for Us” funding in Senate Bill 1122 would go to the following:

  • Nursing homes - $245 million
  • Personal assistance services - $140 million
  • Community HealthChoices managed care organizations - $50 million
  • Assisted living centers and personal care homes - $50 million
  • Adult day services - $13 million
  • LIFE (Living Independence for the Elderly) providers - $8 million
  • Residential habilitation - $1 million

The legislation is pending in the House Appropriation Committee.


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State Legislation in the Works

The Pennsylvania legislature has been hard at work introducing several measures related and unrelated to COVID-19.

Rep. Barbara Gleim (R-Cumberland) introduced House Bill 2430 that will require the Department of Revenue (DOR) to issue a refund, upon election by a taxpayer, for instances of estimated tax overpayment. This legislation will provide each taxpayer the ability to decide what happens with a determined overpayment and, in effect, negate the current regulation which allows DOR to apply the overpayment as a credit toward future tax liabilities. The PICPA State Taxation Committee is reviewing Gleim’s legislation, which is pending in the House Finance Committee.

Rep. Martina White (R-Philadelphia) introduced House Bill 2484 that would establish financial restrictions related to the COVID-19 emergency. In financial matters of domestic nonprofit corporations, it would further provide for investment of trust funds; and in principal and income, it would further provide for charitable trusts.

Sen. Lisa Boscola (D-Northhampton) plans to introduce a coronavirus relief package. It includes several measures addressing Commonwealth Financing Authority redistribution; unemployment compensation business relief changes; coronavirus-related manufacturing, production, and development tax credits; research grants for epidemiology and virology; business interruption insurance; restaurant and lodging sales tax amnesty; personal income tax holiday; Johnstown flood tax redistribution; and childcare grants. This package attempts to develop plans for future pandemics. Many of the measures are awaiting formal introduction.

Sen. Gene Yaw (R-Lycoming) plans to introduce a two-part bill package to reopen restaurants, bars, and private clubs in “yellow and green” designated counties. This would apply to restaurant, hotel, and private club licensed establishments that serve food and alcohol, as well as non-liquor-licensed restaurants. Yaw’s legislation would not apply to night clubs and music venues. The provisions in this legislation would remain in effect until the state disaster declaration is terminated and establishments can return to normal dine-in operations. This package is awaiting formal introduction.


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Senate COVID-19 Hearings Explore Impact on Education, Transportation, and Safety

State Senate committees continued this week to examine Gov. Wolf’s response to COVID-19 through a series of public hearings. Cabinet secretaries and stakeholders impacted by the administration’s response to the crisis testified. The hearings focused on education and transportation issues, as well as the ability to protect vulnerable populations while reopening various industries throughout the state.

Monday’s Senate Education Committee hearing focused on continuity of education for young people during the COVID-19 pandemic, as well as a path forward for schools to reopen in the fall.

On Tuesday, the Senate Transportation Committee explored the impact of the COVID-19 shutdown on transportation projects, as well as the cost of the shutdown to taxpayers.

The Senate Local Government Committee and the Senate Aging and Youth Committee held a joint hearing to gather testimony from medical experts and county officials about how to protect older Pennsylvanians and others at high risk from COVID-19 as counties begin the process of reopening.

The hearings followed a series of four hearings last week that covered topics such as unemployment compensation problems, efforts to protect nursing home residents, wine and spirit store issues, and the governor’s plan to reopen the state.


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Treasury Provides State-by-State Economic Impact Payment Figures

The U.S. Treasury Department and the IRS released updated state-by-state figures for Economic Impact Payments, with approximately 130 million individuals receiving payments worth more than $200 billion in the program's first four weeks.

More than 150 million payments will be sent out, and millions of people who do not typically file a tax return are eligible to receive these payments. Payments are automatic for people who filed a tax return in 2018 or 2019; receive Social Security retirement, survivor, or disability benefits (SSDI); or receive railroad retirement benefits, as well as supplemental security income (SSI) and veterans affairs beneficiaries who didn't file a tax return in the last two years.

For those who do not receive federal benefits and did not have a filing obligation in 2018 or 2019, the IRS continues to encourage them to visit the nonfiler tool at IRS.gov so they can quickly register for Economic Impact Payments. People can continue to receive their payment throughout the year.


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