Legislative Update

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  • Week Ending Oct. 12, 2018

    by PICPA Government Relations | Oct 12, 2018


    1099-MISC Withholding Fix Backed by PICPA Clears House Committee 

    Legislation backed by the PICPA that clarifies the withholding requirements of nonresident income was unanimously reported from the House Finance Committee. Act 43 of 2017 created a new withholding obligation for certain taxpayers to nonresidents, and expanded the requirements with respect to when a copy of Federal Form 1099-MISC is required to be filed with the state Department of Revenue.

    “I am glad the Finance Committee decided in unanimous fashion to move this important piece of legislation to the full House for a vote,” said PICPA member Rep. Keith Greiner, CPA (R-Lancaster), after the vote on his legislation. “HB 2413 addresses many of the concerns I’ve heard about from taxpayers in my district and throughout the state with the new withholding requirement. I appreciate the work that stakeholders like the PICPA, the Department of Revenue, and others put into this proposal.”

    Most taxpayers are trying to be good corporate citizens and comply with the new requirement. However, compliance with the new withholding provisions has been costly, as taxpayers have had to implement new procedures and modify their systems to comply, PICPA told lawmakers on the committee. Practitioners who are advising clients on the implementation of the new withholding provisions have run across several recurring issues that need to be addressed through corrective legislation.

    House Bill 2413 addresses many concerns raised by businesses and tax practitioners regarding the new withholding requirement. The legislation addresses the obligations on persons and entities withholding tax, the methodology for determining how much tax to withhold, the apportionment of Pennsylvania’s income formula, and other various technical corrections.

    For more information on this issue please read PICPA’s 1099-MISC Withholding issue brief.

    The bill now goes to the full House for consideration.

     

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    PICPA to Host Webcast of Annual Q&A with Department of Revenue

    The PICPA’s State Taxation Committee meets annually with the Pennsylvania Department of Revenue (DOR) to bring clarity to complex regulations affecting practitioners and their clients. The committee develops the questions and submits them in advance so the DOR can provide researched discussion and written responses.

    Jeffrey Spengler, CPA, chair of the State Taxation Committee and partner with Baker Tilly Virchow Krause LLP in Pittsburgh, discusses the meeting with Peter Calcara, PICPA’s vice president, government relations, in this CPA Now blog.

    This year’s Q&A program on Oct. 24 is being webcast so all PICPA members can join the program virtually and have access to the complete discussion. Don’t wait for the questions and answers to be posted to the website. Join the conversation live.

     

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    Bill Clarifies Sales and Use Tax on Software, Security Equipment

    Last week, the state Senate Finance Committee reported a bill clarifying state law on the imposition of the sales and use tax as it relates to canned software. This past week, it was the House Finance Committee’s turn.

    House Bill 2556, sponsored by Rep. Tommy Sankey (R-Cambria, Clearfield), excludes the sale at retail or use of canned software, or the maintenance, support, or updating of canned software, acquired incident to the purchase at retail of other computer services, unless the predominant purpose of a transaction was to purchase or use canned software.

    The bill now goes to the House for a final vote.

     

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    Dunbar’s Independent Senior Living Facility Privacy Act Unanimously Passes House

    Legislation sponsored by Rep. George Dunbar, CPA (Inactive) (R-Westmoreland), to allow independent seniors to remain in their home, a continuing care retirement community (CCRC), or an affordable housing community without fear of unnecessary and intrusive inspection by a state agency was unanimously approved by the Pennsylvania House.

    House Bill 2291 revises the definition of "personal care home" to specifically exclude premises that do not provide supervision/personal assistance for a continuous period. The bill also allows the Office of the State Long-Term Care Ombudsman in the Department of Aging to advocate on behalf of a resident if the operator of a building seeks to offer or develop services or care delivery to intentionally avoid licensure as a personal care home.

    House Bill 2291 now advances to the Senate for consideration. 

     

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    House Committee Moves to Increase Cybersecurity

    On the heels of a series of security breaches in state government, the House State Government Committee approved legislation to increase and improve cybersecurity.

    House Bill 1704, sponsored by Reps. Seth Grove (R-York), Kristin Phillips-Hill (R-York), and Jason Ortitay (R-Washington/Allegheny), would ensure that Pennsylvania’s cybersecurity standards at least match industry standards, require more frequent testing of security systems, and establish a committee that would meet quarterly to evaluate emerging cyberthreats. The legislation also grants the director of the state Office of Information Technology some financial oversights that are not currently in place.

    The bill was amended in committee to include Grove’s House Bill 2610, which requires state agencies to negotiate into contracts that IT vendors only receive payment for verified billable hours. This would ensure taxpayers are only billed for work received.

    HB 1704 now goes to the full House for a vote.

     

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    Auditor General Reform Bill Clears House Committee

    PICPA member Rep. Frank Ryan, CPA (R-Lebanon), is seeking legislation that would require auditors employed by the state Department of Auditor General to be appropriately qualified to conduct such audits.

    House Bill 2457 clarifies which types of audits the Department shall conduct, and what professional qualifications each Department employee shall possess in order to work on these various types of audits. The legislation will require that the Department provide a transition period allowing current Department employees to attain the necessary qualifications to continue employment with the Department.

    The bill moves to the full House for consideration.

     

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    Committee Approves Bill to Extend National Guard Education Benefits

    The House Veterans Affairs and Emergency Preparedness Committee reported out legislation to extend higher education student assistance grants to spouses and children of National Guard members.

    House Bill 2696, sponsored by Rep. Tim O’Neal (R-Washington), would allow a member of the Pennsylvania National Guard to transfer his or her Educational Assistance Program eligibility to a spouse or child. This program provides both full- and part-time student assistance grants at approved locations of higher learning and institutions within the Pennsylvania State System of Higher Education (PASSHE).

    This legislation is similar to the education benefit transfer authorized for the federal active-duty component of the U.S. military.

    The bill now goes to the full House for consideration.

     

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    Treasurer Torsella Launches Next Phase of Transparency Portal

    Pennsylvania Treasurer Joe Torsella announced that his department continues to increase the capabilities of the Transparency Portal by launching phase four of the project. The portal now provides additional tools that expand access to state expenditure data.

    “Pennsylvania’s state government belongs to the citizens it serves, and they deserve the chance to check where every dollar goes,” Torsella said. “Every time we grow the capabilities of the Transparency Portal, we grow the capabilities of citizens to hold their government accountable. That’s an important tool in restoring the faith that government can and should work for our families, and not for insiders.”

    With these updates, Pennsylvanians can view historical expenditure levels going back to 2014, by both fiscal year and year-to-date. Other enhancements include a general fund balance comparison with the previous fiscal year on the home page, ability to change graph types, and asset allocation information for Treasury investment pools.

     

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Contact Government Relations

governmentrelations@picpa.org
Peter Calcara | 717-232-1821
Alexandra Fabian | 717-232-1821
Annette Knapp | 717-232-1821

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2018 Q&A with the DOR

The PICPA met with the Pennsylvania Department of Revenue on Oct. 24, 2018. View the full transcript or the recording.

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