State Lawmakers Return to Session
State House and Senate lawmakers return to session April 19. It could be a busy week for the PICPA as one of its major legislative initiatives is poised for additional consideration.
The Senate Finance Committee meets on April 19 to consider PICPA-backed House Bill 766. The bill, sponsored by PICPA member Rep. Keith Greiner (R-Lancaster) would change the due date of state corporate tax returns to the 15th day of the month following the due date of the federal return and would waive interest, penalty, or additional tax that may have otherwise been assessed or accrued for failure to file or remit a payment for state and local tax liabilities through the extended deadline of May 17.
The committee also scheduled a vote on Senate Bill 463, sponsored by Sen. Scott Hutchinson (R-Venango), chair of the committee. Senate Bill 463 would establish a sales and use tax exemption for certain equipment purchased by large-scale and colocation data centers as a way to attract them to Pennsylvania. Currently, 29 other states exempt data center equipment from sales and use taxes.
The House Finance Committee has a voting meeting scheduled on April 20. (No agenda posted as of this writing.)
Read the list of House and Senate committee meetings and hearings scheduled for this week.
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PICPA Hosts Quarterly Q&A with Department of Revenue
The PICPA’s State Taxation Committee meets regularly with the Pennsylvania Department of Revenue (DOR) to bring clarity to complex regulations affecting practitioners and their clients. PICPA members develop questions and the PICPA submits them in advance so the DOR can provide researched discussion and written responses.
In February the committee held its quarterly Q&A meeting with the DOR, with topics including the COVID-19 pandemic, myPATH, policy and regulatory changes within the department, and many other tax-specific issues. Read the transcripts of the Q&A from the meeting.
The next DOR quarterly meeting will be held in May. Please submit questions in advance to Annette Knapp at firstname.lastname@example.org by April 20.
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Pa. Revenue Department Provides Guidance on Verifying Payments, Credits
The Pennsylvania Department of Revenue (DOR) has several options for easy verification of a client’s estimated payments, extension payments, and carry forward credits. The options apply to those practitioners who handle fiduciary tax returns, nonresident consolidated returns, pass-through entities, and personal income tax returns.
The DOR recommends that tax practitioners create a Third-Party User Profile in myPATH and request access to the client’s account. Once this access is granted, you will have the ability to view all returns, payments, or credits on the specific tax account in question.
The DOR also released a two-page handout on validation letters. In certain situations, the DOR will send out an identity validation letter requiring the taxpayer to perform an action to confirm their identity. There are three types of ID validation letters that can be issued:
- ID Verification Notice
- ID Validation Quiz Required
- Identity Validation Unsuccessful (a request for additional information)
The handout explains each letter type and what steps need to be taken.
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Legislation of Interest to PICPA Members Introduced
The PICPA government relations team is reviewing and tracking several newly introduced or soon-to-be-introduced bills. Here is a look at the growing list of bills under the team’s review.
Rep. Mark Gillen (R-Berks) and Rep. Tony DeLuca (D-Allegheny) will be introducing legislation to match local tax deadlines with state tax deadlines to create uniform tax due dates.
Reps. Valerie Gaydos (R-Allegheny) and Greg Rothman (R-Cumberland) introduced House Bill 1148, legislation that would eliminate the Pennsylvania inheritance tax. Currently, the Pennsylvania inheritance tax is imposed as a percentage of the value of a decedent’s estate transferred to beneficiaries by will, heirs by intestacy, and transferees by operation of law. The tax rate depends on the relationship of the heir to the decedent. The bill has been referred to the House Finance Committee.
Rothman also introduced House Bill 1163. This bill would reduce Pennsylvania’s corporate net income tax rate from 9.99% to 3.07%. House Bill 1163 is pending before the House Finance Committee.
Rep. Steve Malagari (D-Montgomery) introduced legislation creating the Local Business COVID-19 Loan Interest Grant Program. House Bill 1063 creates a grant program that will help pay interest on any loan that was taken out to save a local business. This grant program will help significantly reduce interest owed on these loans taken during the COVID-19 disaster emergency to ensure the livelihood of so many businesses in our communities. The bill is now before the House Commerce Committee.
Rep. Keith Gillespie (R-York) has a plan to eliminate all school residential property taxes and Rep. Austin Davis (D-Allegheny) has drafted legislation that will put a checkbox on the personal income tax return to have their eligibility evaluated for health insurance programs, such as premium tax credits. If an individual or a dependent is eligible, they will have an opportunity to enroll in health insurance. Neither bill has been formally introduced.
Sen. Tim Kearney (D-Delaware) introduced Senate Bill 464. Kearney’s legislation would allow licensed medical marijuana organizations to deduct necessary and ordinary expenses from their taxable income for the corporate net income tax. Senate Bill 464 has been referred to the Senate Finance Committee.
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House, Senate Committees Explore Education Reform, COVID-19 Impact, Infrastructure
The Senate Community, Economic, and Recreational Development Committee held two days of public hearings in southeastern Pennsylvania to discuss the economic impact of the technology and energy infrastructure industries within the state.
The Senate Education Committee held a hearing on April 12 to review potential education reforms, including accountability, school choice, and charter school reforms. The hearing featured testimony from teachers, students, parents, administrators, and other stakeholders in both public and private education.
On April 13, the Senate Majority Policy Committee held a public hearing on the economic impact of COVID-19 business closures on tourism and hospitality. The hearing highlighted the consequences of closures and restrictions for bars, restaurants, amusement parks, resorts, and many other businesses during the pandemic.
The House State Government Committee concluded a months-long look into Pennsylvania’s election process with its last hearing on April 15, receiving testimony from stakeholders and members of the state House. In the coming weeks, the committee will create a bill to amend Pennsylvania’s election law.
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L&I Will Transition to New Unemployment Compensation System in June
Jennifer Berrier, acting secretary of the Department of Labor & Industry (L&I), announced that Pennsylvanians will have an easier time filing claims for unemployment compensation (UC) benefits when the department's new UC system launches on June 8, 2021. The new system replaces a 40-year-old mainframe legacy system.
The updated system will have a different look and will be better aligned with the user interface of modern websites. It will also provide access to more information and self-serve options, reducing the need for claimants to contact the UC service center.
L&I will provide user guides and hold live workshops with UC experts to assist individuals with learning how to use the new system before it is implemented. Announcements will be made in the coming weeks regarding the dates of the workshops and how to access them. L&I is also in the process of hiring and training an additional 500 to 1,000 customer service representatives and 180 interviewers to help with questions and claims.
The new UC system will provide employers with the ability to receive important information and notices via their dashboard and additional self-service options for managing benefit information. While the current system provides notices of separations, appeal hearing dates, and UC correspondence only on paper, the new system will allow employers to view this information in real-time. This will provide greater oversight, faster response time, and better communication regarding changes in an employer's information.
During the transition, the claims system will need to be taken offline for all users for a period of about two weeks. L&I will be providing regular updates and information about this and other changes.
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House Speaker Bryan Cutler Tests Positive for COVID-19
Speaker of the House Bryan Cutler (R-Lancaster) tested positive for COVID-19 last week. “After a confirmed exposure to COVID-19, I was tested and today learned that I have tested positive for the virus,” said Cutler. “I am currently experiencing mild symptoms and will continue to work from home as my quarantine continues. My exposure and positive test do not fall within time frames of being inside the Capitol, so there is no impact on colleagues, fellow members or staff in Harrisburg, or my district office.”
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