Legislative Update

Get the latest news on Pennsylvania government and the issues affecting the CPA profession through Legislative Update.

  • Week Ending Feb. 16, 2018

    by PICPA Government Relations | Feb 16, 2018

    PICPA to Testify Before State Tax Reform Subcommittee 

    Jason Skrinak, CPA, state and local tax practice leader for RKL and a PICPA State Taxation Committee member, will testify Feb. 21 before the state House Subcommittee on Tax Modernization and Reform. The hearing will focus on Pennsylvania’s personal income tax law and how it affects taxpayers and business.

    Skrinak’s testimony will be posted next week.

    The subcommittee was created by House Resolution 327, which was adopted in June 2017. The nine-member subcommittee is to investigate, review, and make findings and recommendations regarding the rates and means by which taxes are assessed and collected; whether certain taxes are outdated or could be modernized to reflect the current economy; and how to maintain competitiveness and reduce the overall burden on taxpayers without jeopardizing the stability of overall revenue. A report is due Nov. 30, 2018.

    The Senate and House appropriations committees will commence this week.


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    Maher Announces Departure from Office

    PICPA member and state Rep. John Maher (R-Allegheny) announced that he will return to the private sector full-time and will not seek reelection to the Pennsylvania House. First elected in 1997 in a special election, Maher is in his 11th term. He currently serves as chair of the House Environmental Resources and Energy Committee.

    “Serving my neighbors has been the greatest honor of my life,” Maher said. “While I have no known opposition for reelection, and this decision was very difficult, I wanted to make an announcement in time for credible candidates to announce for the open seat.”

    As a legislator, Maher championed the first advances in 50 years in Pennsylvania’s right-to-know law, and ended Pennsylvania’s dubious distinction as the only state that had no laws restricting lobbyist behavior. Maher also authored, in conjunction with the PICPA, Act 166 of 2002, which created a uniform definition of earned income in Act 511, and the Audit Integrity Act, which criminalized material deceptions committed in connection with a CPA’s attestation report intended for public use.

    Maher has accepted an appointment as a Fellow at Cambridge University in England, and expects to undertake other academic and business opportunities.

    Always a champion for the CPA profession, Maher was a stalwart for the PICPA. His presence as a voice for Pennsylvania’s CPAs will be sorely missed. The PICPA wishes Rep. John Maher well in all his future endeavors.   


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    Wolf Rejects Gerrymandered Map

    Gov. Tom Wolf told the Pennsylvania Supreme Court that he will not accept the proposed map Republican legislative leaders submitted because it, too, is a partisan gerrymander that does not comply with the court’s order or the Pennsylvania Constitution.

    “Partisan gerrymandering weakens citizen power, promotes gridlock and stifles meaningful reform,” Wolf said in a statement. "As nonpartisan analysts have already said, their map maintains a similar partisan advantage by employing many of the same unconstitutional tactics present in their 2011 map."

    Late in the week, Senate Majority Leader Jake Corman (R-Centre) and House Majority Leader Dave Reed (R-Indiana) asked Wolf to join them in asking the Pennsylvania Supreme Court for an extension of time to allow the legislature to conduct a proper process to draw up a new map, one that could win the support of Republicans and Democrats.


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    New R&D Credit Online Application System

    Later this year, the Pennsylvania Department of Revenue will introduce the Research and Development (R&D) Tax Credit online application system. The system will provide a resource for applicants to verify the status of their applications.

    The new online application will be accessible in the summer of 2018 through to Sept. 15, 2018. Taxpayers and tax practitioners must submit their applications electronically by the Sept. 15, 2018, filing deadline at www.revenue.pa.gov.

    The filing application requires users to create a Department of Revenue electronic signature, then log on using the e-signature. A single user may file the R&D application for one or more business, and there are no limits to the number of applications a user may file.

    All filers should review the application instructions prior to electronically filing to ensure accuracy in the application. A system-generated confirmation number will be provided upon completion of a successful filing. Errors within a report will prevent the application from being filed.

    The electronic application supersedes any and all prior year applications. All 2018 R&D applications must be submitted using the online application platform. Applications will not be accepted in any other format.


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    Proposal to Reform Property Tax Collection System

    State Sen. Scott Martin (R-Lancaster) will introduce legislation that would give counties, municipalities, and school districts more flexibility in the collection of property taxes.

    Martin’s bill would give local governing bodies the option to eliminate the position of tax collector and allow counties and municipalities to have the County Treasurer administer property tax collection. It would also permit school districts to collect their own property taxes without having to enter into special costly agreements. The measure could help local governing bodies avoid a duplication of services and cut through layers of red tape that only serve to increase costs, Martin said.

    The legislation would not mandate the elimination of the tax collector in any county, municipality, or school district. It would only offer governing bodies the option to eliminate the position if those entities believe they can collect property taxes more efficiently and effectively.

    In current practice, county treasurers are authorized to collect property taxes for municipalities and school districts can collect their own only after navigating archaic red tape that is also costly.


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    Pennsylvania Malt Beverage Tax Credit Program

    The Pennsylvania Malt Beverage Tax Credit Program is currently accepting applications for this year.

    A taxpayer who is a manufacturer of malt or brewed beverages may submit an application for tax credits against the malt beverage tax imposed under Article XX of the Tax Reform Code for investment in qualified capital expenditures placed into service in Pennsylvania between July 1, 2017, and Dec. 31, 2017. A taxpayer may apply for a Malt Beverage Tax Credit, along with supporting documentation, to the Department of Revenue by April 1, 2018.

    For more information and to apply for a Malt Beverage Tax Credit, refer to the Department of Revenue Tax Credits webpage.


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    Plan to Improve State Budget Process

    Rep. Jason Ortitay (R-Washington/Allegheny) recently introduced legislation to improve oversight of the state budget process by separating the omnibus general appropriations bill into separate, more manageable pieces.

    House Bill 2070 would place each agency’s budget into a separate bill that would be subject to an individual vote. A concurrent resolution also would be passed setting the upper spending limit for each agency. The sum of these amounts would be the total that can be appropriated for the fiscal year.

    The bill has been assigned to the House State Government Committee.


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    Pittsburgh Emerges from Distressed Status Under Act 47

    Gov. Wolf announced that the city of Pittsburgh’s status as a distressed municipality under Act 47 has been terminated. Pittsburgh is the second city and 14th municipality to exit the program. Pittsburgh has operated under Act 47 status for 14 years, entering on Dec. 29, 2003.

    Bolstered by careful budget governance and a recent surge in the city’s technology and medical sectors, the city has stabilized its finances. It now operates with healthy surpluses that are projected to continue. The city’s debt service is reasonable and manageable when compared with the overall budget, and city administrators have developed a strategy for fiscal management that pays for necessary city services such public safety and public works, funds employee pensions plans, invests in capital improvements, and controls costs.

    Since 2015, five municipalities, including Pittsburgh, have recovered from distressed status. Others include Altoona, Blair County; Plymouth, Luzerne County; Nanticoke, Luzerne County; and Clairton, Allegheny County.

    Act 47 (The Municipalities Financial Recovery Act of 1987) was enacted to provide a broad-based program of fiscal management oversight, technical assistance, planning, and financial aid to municipalities experiencing severe fiscal distress.


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Contact Government Relations

Peter Calcara | 717-232-1821
Alexandra Fabian | 717-232-1821
Annette Knapp | 717-232-1821

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