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Pennsylvania Institute Of Certified Public Accountants

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Q&A with Pennsylvania Department of Revenue

Corporate Tax

How should a corporate taxpayer apply the IPA/COP method to source goodwill from the sale of a business?
How should a corporate taxpayer apply the IPA/COP method to source receipts/gain from the sale of a patent, trademark or similar intangible for CNIT purposes?
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?
May a corporate taxpayer rely upon the MTC’s Section 17 regulation for purposes of sourcing receipts from services until the DOR issues market-based sourcing regulations for CNIT purposes?
How should a taxpayer handle a notice of assessment for a year in which the appeal deadline has passed regarding the former Capital Stock/Foreign Franchise Tax (CSFT)?
Scenario: The REIT may have PA modifications to federal taxable income
Scenario: Applying the add-back provision
As a follow-up to Corporation Tax Information Notice 2016-1, does the Department of Revenue plan to provide additional guidance related to part III?
When a personal income tax return is audited, (unreimbursed business expenses), does the Department respond to the taxpayer/practitioner indicating that the information has been received?
Scenario: A federal bonus depreciation adjustment was partially disallowed for a prior year during an IRS audit of a corporation
Scenario: A return is filed prior to the due date (or prior to the extended due date) and a mistake is discovered
If a corporation having unrecovered bonus depreciation for CNIT purposes merges or liquidates into a bank subject to Bank Shares Tax, what happens to the corporation’s remaining unrecovered bonus balance?
Scenario: Transaction involving a consumer or recipient who is different than the paying customer
Have there been any internal discussions surrounding the proposed Section 385 regulations and how they may apply to a separate filing jurisdiction such as Pennsylvania? If the regulations are passed, would the Department provide formal guidance?
Scenario: Apportioning a taxable loss to Pa.
Scenario: Interest received from a partnership in a corporation’s sales factor
In determining a corporation’s sales factor, is it acceptable to use PJM’s ISO load factor as a means of sourcing receipts to Pa. from spot sales of electricity on the PJM network? The BF&R granted PSEG Energy Resources & Trade LLC relief on the issue.
Scenario: Corporation recently learned that it was subject to a CNI tax in 2013 and 2014
Scenario: Clients receiving Notice of Assessments after PA processed their returns
With respect to Corporate Net Income and Personal Income taxes, does the Department follow the Operational Approach or the Transactional Approach, and how granular is the DOR’s analysis?

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