Q&A with the Pennsylvania Department of Revenue

Scenario: Apportioning a taxable loss to Pa.

Dec 08, 2016

ABC Corp. is a startup biotech company that conducts R&D activities (property and payroll) in Pa., NJ and NY. During 2015, ABC Corp. had no receipts of any type and incurred a Pa. taxable loss in the amount of $1 million. ABC Corp. was entitled to apportion its taxable loss to Pa., NJ and NY. 


As ABC Corp. had no sales anywhere, how would the corporation apportion its loss to Pa.?


Since the income sourced to Pa. is based solely on sales and there are no sales in Pa. none of the loss is sourced to Pa.

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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.