Q&A with the Pennsylvania Department of Revenue

Should a corporate taxpayer apply the income producing activity/cost of performance (IPA/COP) method to source royalties or other receipts from the licensing of marketing and non-marketing intangibles for CNIT purposes?

Jan 22, 2018
The income producing activity occurs where the benefit is received from the marketing or non-marketing intangibles. Generally, this means the income producing activity occurs where the licensed intangibles are used.

DISCLAIMER: The Department of Revenue has prepared draft regulations for sourcing receipts of services and intangibles. The initial drafts are currently under internal review and will be made available for public inspection/review/comment as soon as practical. Accordingly, any responses contained herein are based on previously-provided guidance from the Department.

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Full Transcripts: Annual Meetings with the Pennsylvania Department of Revenue
Disclaimer

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.