Week Ending Sept. 4, 2020

Sep 04, 2020

Bill Would Permit Licensed Professionals to Receive Board Advice

The state House approved legislation permitting CPAs and other licensed professionals to receive advice from their licensing boards. The PICPA supports the intent of the legislation, but a last minute amendment may jeopardize the bill.

House Bill 1566, sponsored by Rep. Bill Kortz (D-Allegheny), gives boards and commissions under the Bureau of Professional and Occupational Affairs (BPOA) the authority to issue advisory opinions upon the request of a licensee concerning the meaning or interpretation of an act or regulation pertaining to the license, registration, certificate, or permit issued by such board.

Advisory opinions are not binding upon the licensing board or commission, except with respect to the individual for whom the opinion is rendered. Advisory opinions will be public records and may be published.

An amendment by Rep. John Lawrence (R-Chester) contains language that would prohibit a board or commission from levying a civil penalty or denying, suspending, or revoking a license, registration, certification, or permit solely because of an action taken by a licensee contrary to Gov. Tom Wolf’s March 6, 2020, disaster emergency declaration and subsequent renewals. Democrats object to this provision.

House Bill 1566 now moves to the Senate for consideration.


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NOL Carryover Measure Clears State House Committee

The Pennsylvania House Finance Committee gave its approval to legislation to allow a net operating loss (NOL) of taxable income to be carried over indefinitely. Pennsylvania currently has one of the more limiting NOL statutes in the country.

House Bill 2420, sponsored by Rep. Mike Jones (R-York) and Peter Schweyer (D-Lehigh), would amend the Tax Reform Code to remove the time limitation a business may carry forward an NOL from one year to the next. Current law allows taxpayers subject to the state’s corporate net income tax to carry over NOL of taxable income, not to exceed 40% of the net loss for the tax year, for a period of up to 20 years. House Bill 2420 allows the NOL beginning in tax year 2020, and each tax year thereafter, to be carried indefinitely.

The bill is before the full House for a vote.

The committee also approved House Bill 2598 and House Bill 2599, both of which would repeal obsolete laws related to the mercantile license tax system. The measures, sponsored by Rep. Jake Rader (R-Monroe), now go to the full House for consideration. 


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PICPA Joins Call for State Tax Filing Relief for Remote Workers

The PICPA has joined more than 120 employers and organizations across the nation in signing a letter to Congressional leaders urging them to support state tax filing and withholding relief for remote workers during the pandemic by enacting Section 403 of the American Workers, Families and Employers Assistance Act (S.4318), and a related measure in the Remote and Mobile Worker Relief Act (S.3995).

The accounting profession has been consistent in its support of state tax filing relief for remote workers. It has been working with the Council on State Taxation and others to advocate for its inclusion in federal legislation.  

“This legislation is an integral step in simplifying and removing unnecessary obstacles to administering the broader tax system,” said Edward Karl, CPA, CGMA, AICPA vice president of taxation. “Employees and employers are asking Congress for their help, and we strongly urge them to enact this important legislation. AICPA has long advocated for this relief, and it supported Sens. Thune’s and Brown’s efforts earlier this year for a consistent and uniform de minimis rule for nonresidents’ state taxation and withholding.”

With an unprecedented number of personnel working remotely, it is necessary to adapt to the current economic reality. The PICPA believes that this legislation is critical to the fiscal health of Pennsylvania, our businesses, and our taxpayers, and we are asking Congress to provide the relief our country needs.


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House Approves Election Reform Measure

State House lawmakers approved an omnibus election reform bill that includes recommendations made by the Pennsylvania Department of State in its 2020 Primary Election Act 35 of 2020 Report. The bill was approved by a vote of 112-90.

House Bill 2626, sponsored by Rep. Dan Moul (R-Adams), would allow county boards of election to do the verification, opening, scanning, and processing of absentee and mail-in ballots as early as 8 a.m. on the Saturday before the election, and would move the deadline to apply for absentee and mail-in ballots from seven days prior to an election to 15 days prior to an election. Lastly, the bill would move the final deadline for county boards of election to begin to send absentee and mail-in ballots to voters from 14 days before an election to 28 days before an election.

The bill now advances to the Senate for consideration.


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House Sends Senate Local School Control Measure

The state House sent to the Senate a two-bill package that would give parents and local districts more control over students’ extracurricular activities.

House Bill 2787, introduced by Rep. Mike Reese (R-Westmoreland), provides that decisions about school sports and whether spectators may be allowed are made at the local level.

House Bill 2788, sponsored by Rep. Jesse Topper (R-Bedford), is aimed at allowing parents to decide if children should repeat a year of education due to lost education and/or extracurricular opportunities relative to COVID-19 school shutdowns or hybrid learning models.

The bills go to the Senate for consideration.


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Wolf Calls for Legalizing Marijuana, Paid Sick and Family Leave for Workers

A week after setting forth his fall legislative agenda, Gov. Wolf highlighted two major pieces of his plan for action. He urged the General Assembly to take up the legalization of adult-use cannabis and to pass legislation for paid sick and family leave for workers who need to miss work for an illness or to take care of a loved one.

Wolf believes the legalization of adult-use cannabis will help the state’s economic recovery amid COVID-19. Legalization will also create more outlets for important restorative justice programs in the commonwealth.

“I am proposing we legalize adult-use cannabis here in Pennsylvania with a portion of the revenue going toward existing small business grants,” Wolf said. “Half of these grants would be earmarked for historically disadvantaged businesses, many of which have had difficulties attaining other assistance because of systemic issues.”

Enacting a paid sick leave law would help an estimated 400,000 Pennsylvanians, particularly low-wage workers who are forced to work when ill, risking their health and the employees and customers around them, notes the administration. Providing paid sick leave would improve public health and help to prevent more people from getting sick.

Wolf also announced that the state’s new paid parental leave policy will take effect Oct. 15. State employees will be eligible for up to six weeks of paid parental leave to care for a child after a birth, adoption, or foster care placement. The new policy is separate from any accrued sick or paid time off that the employee may have earned.


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August State Revenues Stronger than Expected

Pennsylvania collected $2.5 billion in General Fund revenue in August, which was $209 million, or 8.9%, more than anticipated. Fiscal year-to-date General Fund collections total $6.7 billion, which is $210.3 million, or 3.3%, above estimate.

Read the Independent Fiscal Office (IFO) Monthly Revenue Update. IFO’s Revenue Estimate Performance, which compares actual General Fund collections to IFO revenue estimates over the course of the last eight budget cycles, can be found here.

The Department of Revenue estimates that approximately $187 million of the revenue collected in August can be attributed to extending the due date to Aug. 14, 2020, for corporations that had annual corporate net income tax payments due in April, May, June, or July.

Sales tax receipts totaled $1 billion for August, $92.7 million above estimate. Year-to-date sales tax collections total $2.3 billion, which is $92.7 million, or 4.2%, more than anticipated.

Personal income tax (PIT) revenue in August was $876.1 million, $42.9 million above estimate. This brings year-to-date PIT collections to $3.2 billion, which is $42.9 million, or 1.4%, above estimate.

August corporation tax revenue of $303.3 million was $26.8 million above estimate. Year-to-date corporation tax collections total $543.8 million, which is $28.2 million, or 5.5%, above estimate.

Inheritance tax revenue for the month was $92.1 million, $5.9 million above estimate. This brings the year-to-date total to $210.4 million, which is $5.8 million, or 2.9%, above estimate.

Realty transfer tax revenue was $56.5 million for August, $14.3 million above estimate. The fiscal-year total is $74.4 million, which is $14.3 million, or 23.8%, more than anticipated.

Other General Fund tax revenue, including cigarette, malt beverage, liquor, and gaming taxes, totaled $169.4 million for the month, $32 million above estimate. This brings the year-to-date total to $314.3 million, which is $31.9 million, or 11.3%, above estimate.

Nontax revenue totaled $20.6 million for the month, $5.6 million below estimate. The year-to-date total is $34.8 million, which is $5.5 million, or 13.7%, below estimate.


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