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: The REIT may have PA modifications to federal taxable income
For CNIT purposes, a corporate REIT is entitled to a dividends-paid deduction that usually results in federal taxable income of $0. However, the REIT may have PA modifications to federal taxable income. If the net modifications result in PA taxable income, would REIT have a CNIT liability?
In most cases, this will not happen, but if they have PA modifications after taking the dividends then they would be subject to any liabilities, the same as any other corporation.