Legislative Update - Week Ending Oct. 14, 2022

Legislative Update - Week Ending Oct. 14, 2022

Oct 14, 2022


Pennsylvania Senate Returns for Final Session Days

Pennsylvania senators return to legislative session on Oct 17. The Senate has only six remaining voting days scheduled before recessing for the November elections. House lawmakers return on Oct. 24. The 2021-2022 legislative session closes on Nov. 30.

PICPA has several active issues pending before the Senate. PICPA’s legislation amending the CPA Law (House Bill 1328) is before the Senate Consumer Protection and Professional Licensure Committee. Legislation that increases Philadelphia’s net operating loss carryforward provisions to 20 tax years (House Bill 324) and a bill creating an optional pass-through entity tax (Senate Bill 1320) are before the full Senate for consideration. The PICPA is urging senators to consider these bills before the chamber recesses.

All legislation not acted upon by the General Assembly when the session closes will have to be reintroduced in the 2023-2024 legislative session that starts in January.

 

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Pa. Will Not Appeal Ruling on Third-Party Sellers

The Pennsylvania Department of Revenue (DOR) will not appeal a recent state court decision holding that it cannot pursue back taxes from certain third-party sellers that had inventory housed in Pennsylvania.

Jeffrey Johnson, DOR’s communications director, provided the PICPA with the following statement: “We are not going to file an appeal in this case, because we believe it is limited to a unique set of facts with no broader applicability. Rather, we plan to revise the business activity questionnaire that the department uses to request information from retailers that may have potential tax liabilities in Pennsylvania to comply with the court’s decision.”

He went on to explain that the DOR took action on this matter because of its duty to fairly administer tax laws, which means equitable treatment of taxpayers, whether they are online retailers or brick-and-mortar stores. “It’s our responsibility to ensure that everyone is operating on a level playing field and that businesses based in Pennsylvania are not shouldering an unfair tax burden as they compete with out-of-state businesses,” Johnson said.

Last month, Pennsylvania Commonwealth Court unanimously blocked DOR from seeking sales and income taxes from sellers that had goods stored in the state as part of the fulfillment by Amazon. The court held that because the third-party sellers did not control the placement of their goods after Amazon received them, they did not have nexus with Pennsylvania.

 

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Wolf Nominates Two to State Accountancy Board

Gov. Tom Wolf nominated two CPAs for seats on the State Board of Accountancy. The nominees must be confirmed by the state Senate.

Michael Ocker, CPA, from Mercersburg, Franklin County, was reappointed for a second four-year term to the board. Ocker, a PICPA member, has served on the board since 2018 and is its current vice chair. He is president of Ocker Accountants & Consultants, with offices in Chambersburg, Hanover, and South Central Pennsylvania.

Benjamin Holland, CPA, was also nominated by Wolf. Holland is the current controller for Butler County, Pa. Holland has been county controller since 2014, and was in public accounting before taking that position. 

 

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PICPA Government Relations Fall Webinar Series

The PICPA government relations team will host a series of webinars this fall that cover a range of topics and issues impacting PICPA members and their clients. These webinars are free to PICPA members.

On Oct. 27, the PICPA will host representatives from the Philadelphia Department of Revenue to discuss phase two of its new Tax Center functionality. Join Rebecca Lopez Kriss, deputy commissioner, Peter Donnelly, project director, Chris Hazle-Cary, project manager, and Monica Barr, training lead, for this session. They will provide a demonstration of the system and its new functions, which went live Oct. 3, 2022.

Join Peter Calcara, PICPA vice president of government relations, on Nov. 30 for a post-election session in which he provides an insider’s perspective on the year-end legislative and regulatory landscape in the state capital. In this 50-minute session, you will receive analysis of the 2022 general election, a recap of the fall session, and an update on PICPA’s proposals and how we’ll move forward in the new year. This session qualifies for one hour of CPE.

Be sure to make time on Jan. 5 to join Edward R. Jenkins Jr., CPA, CGMA, of Jenkins & Co. LLC, a member of the PICPA Federal Tax Thought Leadership Committee and the AICPA Tax Executive Committee, as he presents a webinar on year-end federal tax issues. He will have just returned from the AICPA National Tax Conference and AICPA committee meetings with key players in the tax world and will share the most up-to-date information with PICPA members. This session qualifies for one hour of CPE. 

 

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Longtime State Rep. Tony DeLuca Passes Away

State Rep. Anthony “Tony” DeLuca (D-Allegheny), the longest serving member of the Pennsylvania House of Representatives, died on Sunday, Oct. 9, at home after a brief battle with lymphoma. He was 85.

For 39 years, DeLuca represented the 32nd Legislative District, comprised of Penn Hills, Verona, the majority of Plum Borough and now, in the most recent legislative redistricting, the Borough of Oakmont.

DeLuca served as Democratic chair of the House Insurance Committee for more than 20 years. In addition, he was a member of the Democratic Policy Committee and several caucuses including Autism, Cancer, Firefighters and Emergency Services (chairman emeritus), Mental Health (co-chair), Sportsmen, and Steel.

DeLuca is survived by four children, nine grandchildren, and three great-grandchildren.

The PICPA sends its condolences to the DeLuca family.

 

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IFO Demographic, Revenue Estimate Reports

The Independent Fiscal Office recently released two reports of interest to PICPA members.

The first examines the demographic future for Pennsylvania. The 2022 Pennsylvania Demographic Outlook report forecasts state population growth through 2030.

The second, the Revenue Estimate Performance: Fiscal Years 2012-13 to 2021-22 report, compares actual General Fund collections to IFO revenue estimates over the course of the last 10 budget cycles. The report notes that for three of the 10 fiscal years, the IFO official estimate had been within one-half percentage point of actual revenues. For the seven other years, the forecasts were over actual revenues in three years and under in four years.

 

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AICPA Comments on Pass-Through Entity SALT Payment Deductions

The AICPA recently submitted comments on guidance issued by the IRS regarding the deductibility of payments by partnerships and S corporations for certain state and local taxes.

The Oct. 4, 2022, comment letter highlights the need for additional guidance on certain issues arising for taxpayers with respect to IRS Notice 2020-75 and various states’ enacted or proposed pass-through entity (PTE) taxes.

Legislation supported by the PICPA creating an optional PTE tax is pending in both the state House and Senate. House Bill 1709 is pending before the House, and Senate Bill 1320 is before the Senate.

 

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