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Pennsylvania Institute Of Certified Public Accountants

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Q&A with Pennsylvania Department of Revenue

Corporate Tax

Scenario: apportion taxable income for CNI Tax
Scenario: An IRA holds 100% of the interests in a LLC, which in turn holds rental / investment property in Pennsylvania.
A federally chartered bank based outside PA derives income from sources in PA – for example, from a rental property. Is the bank subject to Bank Shares Tax or Corporate Net Income Tax and Capital Stock / Foreign Franchise Tax?
Scenario: underpayment of estimated tax interest
Why is a Taxing Division desk audit not an “audit” for the purposes of triggering the six-month period to file a refund under 72 Pa.C.S. sec. 10003.1(b)? 72 Pa.C.S sec 10003.21(b) does not appear to distinguish between a desk and field audit.
Under what circumstances would an overriding royalty interest or a production payment interest in gas create nexus for a CNI Tax and/or Foreign Franchise Tax?
Scenario: DEF Corp., a PA based corporation doing business throughout the world, licenses a trademark to GHI Corp, an OH based corporation.
Scenario: An employee of a DE corporation conducts business activities at his home in PA.
When does a complete or partial liquidation of a business still constitute non-business income under the Laurel Pipe Line, Ross-Araco and Canteen decisions?
In view of the Commonwealth Ct. decision in Glatfelter, 362 F.R.2007, when does a transaction constitute nonbusiness income?
Will the DOR issue the long-awaited cost of performance regulations?
Does the DOR treat the sale of electricity as the sale of tangible personal property, intangible personal property, or as a service for CNI Tax and CS/FF Tax purposes?
Does the DOR treat the sale of natural gas as the sale of tangible personal property, intangible personal property, or a service for CNI Tax and CS/FF Tax apportionment purposes?
For CNI Tax and CS/FF Tax purposes, are gross proceeds or net gains from the sale of derivatives, e.g., futures, options and swaps, includable in a corporation’s sales factor (assuming that the derivatives are not securities)?
For CNI Tax and CS/FF Tax apportionment purposes, is the sale or licensing of canned software delivered electronically treated as the sale of tangible personal property or the sale/licensing of intangible property?
Which appeal rights does a corporate taxpayer have if the DOR refuses to accept all the changes reported on an RCT-128C?
Scenario: For federal income tax purposes, a corporation prepares its federal Form 1120, Schedule UTP, and Uncertain Tax Position Statement on a consolidated basis.
Scenario: A corporation reports and remits a self-assessed CNIT.
Scenario: A corporation does business in PA and files an RCT-101 as part of a consolidated group.
Does the DOR intend to assert IRC § 7701(o) (Clarification of Economic Substance Doctrine) as a basis for challenging certain intercompany transactions for CNIT purposes?

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