PICPA Tax Due Dates Fix Becomes Law
The General Assembly unanimously passed legislation authored by Rep. Keith Greiner, CPA (R-Lancaster), and supported by the PICPA to change the due date for corporate tax and local earned income tax returns. House Bill 766 unanimously passed both the House and Senate, and Gov. Tom Wolf signed the bill into law on April 22. It is now Act 10 of 2021.
“I am thrilled that the Senate and the House were able to come together and move this legislation forward quickly,” said Greiner. “I would also like to thank the PICPA and its 20,000 members for their support and perseverance on this issue.”
House Bill 766 makes three important changes that will benefit taxpayers and tax practitioners. First, the bill moves the corporate tax filing due date in Pennsylvania to the 15th day of the month following the due date of the federal return. This change was advocated for by members of the PICPA State Taxation Committee to create more certainty and eliminate confusion for corporate taxpayers. This provision is effective for tax years beginning after Dec. 31, 2020.
Second, the bill protects unsuspecting taxpayers from interest and penalties for failing to file a local return by April 15. Many local tax jurisdictions in Pennsylvania failed to extend the 2021 filing due date to May 17 following the federal government and the state. Under House Bill 766, local tax collectors must waive any 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 May 17, 2021. The provision expires May 31, 2021.
Lastly, and perhaps most importantly, House Bill 766 permanently aligns the local earned income tax payment deadlines to match the deadline for federal and state tax returns.
For more on PICPA’s role in this legislative accomplishment read the CPA Now blog, “PICPA Scores Three-in-One Legislative Victory” or view this video with Peter Calcara, PICPA vice president, government relations.
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A Look Ahead at the Week of April 26
The Pennsylvania Senate will be in session the week of April 26. While the House is not scheduled to be in session, there are a number of committee meetings and public hearings in both chambers.
The Performance-Based Budget Board has three days of hearings (April 26-28). On April 26, the board will hold a public hearing on tax credits for the Department of Revenue, the Department of Community and Economic Development, and the Department of Agriculture/State Conservation Commission. On April 27, the board will meet with the departments of Transportation and Human Services. On April 28, the board convenes for hearings with the State Police and Department of Military and Veterans Affairs.
The House Finance Subcommittee on Tax Modernization and Reform has an informational meeting on House Bill 23. The bill would incentivize the energy-efficient installation of mechanical insulation for commercial and industrial projects.
The House Education Committee has an informational meeting on academic accountability.
The Senate Appropriations and Education committees will hold a joint public hearing on the Pennsylvania State System of Higher Education.
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IFO Provides Analysis of Gov. Wolf’s Revenue Proposals
The Independent Fiscal Office (IFO) posted its annual review of the revenue proposals contained in Gov. Wolf’s fiscal year 2021-2022 executive budget.
The analysis examines three proposals: corporate combined reporting and rate reduction, a higher personal income tax rate and tax forgiveness thresholds, and raising the minimum wage to $12 per hour.
This report uses various data sources to derive estimates of the revenue proposals included in the budget.
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Data Center Sales and Use Tax Exemption Legislation Advanced
The state House and Senate finance committees each approved legislation to 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 locate and invest in Pennsylvania.
Senate Bill 463, introduced by Sen. Scott Hutchinson (R-Venango), chair of the Senate committee, amends the state Tax Reform Code to provide for an exemption on equipment used in the construction and operation of computer data centers.
A companion bill, House Bill 952, sponsored by Rep. Donna Oberlander (R-Clarion), House Majority Whip, was reported this week by the House Finance Committee.
Both bills are pending before their respective chambers.
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Newly Introduced Legislation Piling Up
The number of bills being introduced is picking up in the state legislature. Here is a quick overview of newly introduced, or soon to be introduced, bills the PICPA and its government relations committees are keeping an eye on.
House Bill 285, sponsored by Rep. Daryl Metcalfe (R-Butler), addresses taxation issues involving employee stock ownership plans (ESOP). The bill has been referred to the House Finance Committee.
Rep. Keith Gillespie (R-York) introduced House Bills 1157 and 1158. House Bill 1157 would require school districts to use specified plans to receive the regular state reimbursement for a new school construction project. If the district chooses not to do so, it will not receive state reimbursement for the project. House Bill 1158 amends Article III, Section 14, of the Pennsylvania Constitution to abolish use of the “hold harmless” mandate in basic education funding. Both bills have been referred to the House Education Committee.
House Bill 1202, sponsored by Rep. Frank Ryan, CPA (R-Lebanon), will require state agencies and political subdivisions to provide all necessary and requested information to the Secretary of the Budget by Sept. 1, with the secretary compiling and issuing a final comprehensive annual financial report to the governor and the General Assembly no later than March 1 of the following year. The bill has been referred to the House Finance Committee.
House Bill 1222, sponsored by Rep. Mary Jo Daley (R-Montgomery), would require the use of combined reporting by multistate corporations and would drop the corporate net income tax rate from 9.99% rate to 5.99% by 2026. House Bill 1222 has been referred to the House Finance Committee.
House Bill 1229, sponsored by Rep. Mike Carroll (D-Luzerne, Lackawanna), would encourage the development of vacant land and buildings owned by airports and leased to industrial or commercial businesses by providing a $2,100 tax credit to participating businesses for each new full-time job that is created. The bill has been referred to the House Commerce Committee.
House Bill 1265, sponsored by Rep. Mike Jones (R-York), will enable taxpayers subject to state corporate net income tax to use a net operating loss as a deduction for up to 100% of the taxable income of the taxpayer in the taxable year in which the deduction is applied.
Sens. Wayne Fontana (D-Allegheny) and Vincent Hughes (D-Philadelphia) are working on two bills. The first would create small-business tax-deferred savings accounts that allow small businesses to deposit profits into a tax-deferred savings account. The second proposal – the Small Business Fee Exemption Act – would reduce or eliminate business startup fees for small businesses.
Rep. David Zimmerman (R-Lancaster) plans to reintroduce legislation from last session that would require the Department of Revenue to examine, in person at the physical location of the business, requested papers and records of a taxpayer when the department’s request totals 25 pages or more of records.
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Pennsylvania Employers to State: Get Government Out of the Way
State House Republican lawmakers released a report of answers and policy suggestions in response to a survey sent to Pennsylvania employers back in February.
The 42-page Report on the Economic Recovery Business Survey was released by Rep. Martin Causer (R-Cameron, McKean, Potter), chair of the House Majority Policy Committee.
Causer says the survey results indicate that government restrictions and mandates continue to hamper Pennsylvania’s economic resurgence.
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Roundtable Discusses Future of Labor and Clean Energy
The Senate Democratic Policy Committee held a virtual roundtable discussion on the future of clean energy as part of a robust, prolabor economy in Pennsylvania. The hearing, chaired by Sen. Katie Muth (D-Berks, Chester, Montgomery), was held on Earth Day to highlight the role that clean jobs play in a greener energy future.
Participants at the discussion included Patricia DeMarco, PhD, Borough of Forest Hills, vice president, borough council; Darrin Kelly, Allegheny-Fayette County Labor Council, president; Joshua McNeil, executive director, Conservation Voters of Pennsylvania, and vice president for civic engagement, PennFuture; and Kris Anderson, international representative for the International Brotherhood of Electrical Workers.
A recording of this roundtable can be found at senatormuth.com/policy.
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