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
Scenario: An employee of a DE corporation conducts business activities at his home in PA.
XYZ Corp., a DE corporation, operates exclusively in NJ. XYZ Corp. sells tangible personal property. A, an employee of XYZ Corp., resides in Pennsylvania. Some evenings and weekends A may take home unfinished work, and/or make business related telephone calls. Under what circumstances would the in-state activities of A be sufficient to create CNI Tax and/or CS/FF Tax nexus for XYZ Corp.?
It depends upon the specific facts. If the employee is required to perform duties on behalf of his employer from his Pennsylvania home, the Department would consider XYZ Corp to have corporate tax nexus. There may be other facts that would also lead to a nexus determination, including the frequency of the activity in Pennsylvania, use of employer owned equipment in Pennsylvania, reimbursement of expenses incurred by the employee in Pennsylvania, etc.