Q&A with the Pennsylvania Department of Revenue

Scenario: a DE corp. did own or lease any property/assets in PA. The Corp. did not provide a clearance certificate.

Jun 23, 2010
In 2009, ABC Corp. acquired all the assets of DEF Corp., a DE corp. DEF Corp. did own or lease any property/assets in PA. (The transaction was not a bulk sale.) DEF Corp. did not provide ABC Corp. with a clearance certificate.

Since 2006, DEF Corp. had employed an individual who worked out of her home in PA and solicited sales of tangible personal property in PA. DEF Corp. never (1) filed Foreign Franchise Tax returns, (2) collected and remitted PA SUT, (3) withheld PIT on wages of the PA employee.

After the asset sale, DEF Corp. was liquidated into its parent GHI Corp., under DE law. (DEF Corp. never qualified to do business in PA with the Dept. of State.)

Prior to the asset purchase, ABC Corp. did not do business in PA. After the asset acquisition, ABC Corp. began (1) to file Foreign Franchise Tax reports, (2) to collect and remit PA SUT and (3) withhold and remit PIT.

In 2010, the Department of Revenue ascertained that DEF Corp. was (1) subject to PIT withholding on the wages of the individual, (2) required to collect and remit PA SUT, and (3) subject for the Franchise Tax and issued three assessments. After the asset sale, DEF Corp. was liquidated into its parent GHI Corp. GHI Corp. received cash from the asset sale.

A. See answers to this question. 

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These documents provide a summary of the answers provided by the Department of Revenue to the PICPA Committee on State Taxation at its annual question and answer session. These documents are classified as revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on their specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.