We provide here a written summary of answers provided by the Department of Revenue to the committee at periodic question and answer sessions. 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 a specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.
Q&A with the Pennsylvania Department of Revenue
For CNI Tax and CS/FF Tax purposes, are gross proceeds or net gains from the sale of derivatives, e.g., futures, options and swaps, includable in a corporation’s sales factor (assuming that the derivatives are not securities)?
To the extent they are not classified as a security, net gains are used in computing the sales factor.
[Note: there is a question as to whether these items are a security excluded from the sales factor.]