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Legislative Update - Week Ending March 28, 2025
In this issue: PICPA-supported bill to amend charitable purposes law; Democrats retain control of Pa. House, get Senate surprise; Pennsylvania Senate committee advances tax reform; and more.
by PICPA Government Relations
Mar 28, 2025, 10:27 AM
- PICPA-Supported Bill to Amend Charitable Purposes Law
- Democrats Retain Control of State House, Score Surprise Senate Victory
- Senate Committee Advances Tax Reform Measures
- U.S. Supreme Court Passes on State and Local Tax Aggregation for Credits
- Bills Aim to Aid Those Affected by Northeast Philly Jet Crash
- House Lawmakers Vote to Ensure Affordable Care Act Protections
- Employment Serving the Aged Drives Job Gains, Says IFO
PICPA-Supported Bill to Amend Charitable Purposes Law
State Reps. Abigail Salisbury (D-Allegheny) and Keith Greiner, CPA (R-Lancaster), introduced House Bill 965 on behalf of the PICPA to amend the Solicitation of Funds for Charitable Purposes Act. The bill proposes raising the financial reporting thresholds for charitable organizations registered under the Charities Act.
Under House Bill 965:
- Charitable organizations receiving $1 million or more in annual contributions must undergo an audit by an independent certified public accountant.
- Organizations receiving $500,000 to less than $1 million must have a review or audit of their financial statements.
- Organizations receiving $150,000 to less than $500,000 must have a compilation, review, or audit of their financial statements.
- Organizations receiving less than $150,000 may choose to undergo a compilation, review, or audit, but are not required to do so.
These thresholds were last adjusted in 2017. According to Salisbury and Greiner, the proposed updates will provide nonprofit organizations with a financial reporting framework that aligns with federal requirements, ensuring greater clarity and consistency.
House Bill 965 is pending in the House State Government Committee. Members with an interest in helping to advance this legislation should contact the PICPA government relations team at governmentrelations@picpa.org.
Democrats Retain Control of State House, Score Surprise Senate Victory
The March 25 special election brought big wins for Pennsylvania Democrats in both the state House and Senate, with one race delivering an unexpected outcome.
As anticipated, Democrat Dan Goughnour won the special election in the 35th House District, securing a narrow but crucial 102-101 Democratic majority in the Pennsylvania House of Representatives. Goughnour will serve the remainder of the late Rep. Marc Gergely’s (D-Allegheny) term following his death in January.
The shocker occurred in the state Senate race to replace Sen. Ryan Aument (R-Lancaster). Democrat Andrew Malone, who serves as the mayor of East Petersburg, beat Republican Lancaster County Commissioner Josh Parsons by about 480 votes. The seat had been held by Republicans since the early 1980s. Malone’s win narrows the margin in the state Senate to 27 Republicans to 23 Democrats.
More analysis of these races can be found at City and State Pennsylvania.
Senate Committee Advances Tax Reform Measures
The Pennsylvania Senate Finance Committee advanced a series of tax reform bills, marking the first major step in this year’s budget negotiations. Pennsylvania’s new fiscal year begins July 1.
By a 7-4 vote, the committee approved Senate Bill 207 sponsored by Sen. Greg Rothman (R-Cumberland). The bill proposes accelerating the reduction of the state corporate net income tax (CNIT) rate from 7.99% to 4% beginning Jan. 1, 2026. Under current law, the tax, which for 2025 is currently 7.99%, is scheduled to gradually decrease to 4.99% by 2031.
Gov. Josh Shapiro’s proposed fiscal year 2025-2026 budget also seeks to lower the CNIT rate, but his plan follows a more gradual timeline, reducing it to 4.99% by 2029. Additionally, the proposal includes adopting uniform filing requirements for Pennsylvania corporations (combined reporting) in addition to including financial institutions to the tax base beginning Jan. 1, 2026. Read PICPA’s position on combined reporting.
By an 8-3 vote, the committee approved Senate Bill 473 sponsored by Sen. Kristin Phillips-Hill (R-York). The bill would expand the sales and use tax vendor discount, removing the $300 cap established in 2016 and reinstating a 1% discount on the tax collected by businesses that file timely sales tax payments.
The committee unanimously approved Senate Bill 211, sponsored by Sen. Michele Brooks (R-Mercer). This legislation would allow Pennsylvania taxpayers to donate all or a portion of their state income tax refund to the Office of the State Fire Commissioner. The donated funds would support grant programs for local fire companies, emergency medical service organizations, and volunteer rescue squads.
The three bills will advance to the Senate Appropriations Committee for a fiscal note review.
U.S. Supreme Court Passes on State and Local Tax Aggregation for Credits
The U.S. Supreme Court declined to review a decision of the Pennsylvania Supreme Court that state income taxes paid to other states cannot be used to offset local income tax due. The key issue was whether state and local taxes can be aggregated for the purpose of applying credits. There is a lack of consistency among states in this regard, which will continue until the Supreme Court settles the issue.
In the CPA Now blog post, Courts Keep Aggregation of State and Local Taxes for Credits at Bay … For Now, Dan A. Schulder and Heidi Schwartz of Cozen O’Connor discuss Zilka v. Tax Review Board, City of Philadelphia, a case the U.S. Supreme Court declined to review. The Pennsylvania Supreme Court had ruled that state income taxes paid to other states cannot be used to offset local income tax liabilities.
The question of whether state and local taxes should be aggregated for credit application purposes is likely to remain a subject of litigation until the U.S. Supreme Court addresses the issue. In the meantime, inconsistencies among states in applying the dormant Commerce Clause analysis to such crediting issues are expected to persist, conclude Schulder and Schwartz.
Bills Aim to Aid Those Affected by Northeast Philly Jet Crash
Two bills designed to assist residents and businesses impacted by the medical jet crash in Northeast Philadelphia advanced from the House Veterans Affairs and Emergency Preparedness Committee. The Jan. 31 crash of Med Jets Flight 056 significantly disrupted the local community of Castor Gardens.
House Bill 877, sponsored by Rep. Jared Solomon (D-Philadelphia), would provide grants and loans to affected businesses. The Pennsylvania Economic Development Financing Authority would distribute funds through community development financial institutions to offer technical assistance, training, and financial support, helping businesses to rebuild and reopen.
House Bill 1001, also sponsored by Solomon, would exempt recovery payments related to the crash from state income tax.
Both bills now move to the full House for consideration.
House Lawmakers Vote to Ensure Affordable Care Act Protections
State House lawmakers approved a package of bills designed to safeguard key provisions of the Affordable Care Act (ACA) at the state level in the event of federal rollbacks. Supporters argue that these measures will preserve existing health care protections in Pennsylvania, ensuring continuity of coverage and access to essential benefits, even if the federal government repeals or alters the ACA.
The package of bills includes the following:
- House Bill 404, sponsored Rep. Eddie Day Pashinski (D-Luzerne), would allow children to remain on their parent’s private health insurance plan up to the age of 26.
- House Bill 535, sponsored by Rep. Dan Frankel (D-Allegheny), would prohibit Pennsylvania insurers from capping coverage benefits.
- House Bill 618, sponsored by Rep. Jim Haddock (D-Luzerne), would prohibit Pennsylvania insurers from denying or excluding coverage based on preexisting conditions.
- House Bill 755, sponsored by Rep. Perry Warren (D-Bucks), would require Pennsylvania insurers to cover preventative health care services without cost-sharing.
The bills now move to the Pennsylvania Senate for consideration.
Employment Serving the Aged Drives Job Gains, Says IFO
A recent report from the Pennsylvania Independent Fiscal Office (IFO) highlights the impact of the state’s aging population on job growth. Since late 2019, more than half of Pennsylvania’s net new jobs have been in sectors that serve the elderly and disabled, including home health care, nursing facilities, and social assistance services. By 2024, all job gains were concentrated in government, health care, and accommodation-food services, underscoring the continued demand for essential care and support services.
Legislative Update - Week Ending March 28, 2025
In this issue: PICPA-supported bill to amend charitable purposes law; Democrats retain control of Pa. House, get Senate surprise; Pennsylvania Senate committee advances tax reform; and more.
by PICPA Government Relations
Mar 28, 2025, 10:27 AM
- PICPA-Supported Bill to Amend Charitable Purposes Law
- Democrats Retain Control of State House, Score Surprise Senate Victory
- Senate Committee Advances Tax Reform Measures
- U.S. Supreme Court Passes on State and Local Tax Aggregation for Credits
- Bills Aim to Aid Those Affected by Northeast Philly Jet Crash
- House Lawmakers Vote to Ensure Affordable Care Act Protections
- Employment Serving the Aged Drives Job Gains, Says IFO
PICPA-Supported Bill to Amend Charitable Purposes Law
State Reps. Abigail Salisbury (D-Allegheny) and Keith Greiner, CPA (R-Lancaster), introduced House Bill 965 on behalf of the PICPA to amend the Solicitation of Funds for Charitable Purposes Act. The bill proposes raising the financial reporting thresholds for charitable organizations registered under the Charities Act.
Under House Bill 965:
- Charitable organizations receiving $1 million or more in annual contributions must undergo an audit by an independent certified public accountant.
- Organizations receiving $500,000 to less than $1 million must have a review or audit of their financial statements.
- Organizations receiving $150,000 to less than $500,000 must have a compilation, review, or audit of their financial statements.
- Organizations receiving less than $150,000 may choose to undergo a compilation, review, or audit, but are not required to do so.
These thresholds were last adjusted in 2017. According to Salisbury and Greiner, the proposed updates will provide nonprofit organizations with a financial reporting framework that aligns with federal requirements, ensuring greater clarity and consistency.
House Bill 965 is pending in the House State Government Committee. Members with an interest in helping to advance this legislation should contact the PICPA government relations team at governmentrelations@picpa.org.
Democrats Retain Control of State House, Score Surprise Senate Victory
The March 25 special election brought big wins for Pennsylvania Democrats in both the state House and Senate, with one race delivering an unexpected outcome.
As anticipated, Democrat Dan Goughnour won the special election in the 35th House District, securing a narrow but crucial 102-101 Democratic majority in the Pennsylvania House of Representatives. Goughnour will serve the remainder of the late Rep. Marc Gergely’s (D-Allegheny) term following his death in January.
The shocker occurred in the state Senate race to replace Sen. Ryan Aument (R-Lancaster). Democrat Andrew Malone, who serves as the mayor of East Petersburg, beat Republican Lancaster County Commissioner Josh Parsons by about 480 votes. The seat had been held by Republicans since the early 1980s. Malone’s win narrows the margin in the state Senate to 27 Republicans to 23 Democrats.
More analysis of these races can be found at City and State Pennsylvania.
Senate Committee Advances Tax Reform Measures
The Pennsylvania Senate Finance Committee advanced a series of tax reform bills, marking the first major step in this year’s budget negotiations. Pennsylvania’s new fiscal year begins July 1.
By a 7-4 vote, the committee approved Senate Bill 207 sponsored by Sen. Greg Rothman (R-Cumberland). The bill proposes accelerating the reduction of the state corporate net income tax (CNIT) rate from 7.99% to 4% beginning Jan. 1, 2026. Under current law, the tax, which for 2025 is currently 7.99%, is scheduled to gradually decrease to 4.99% by 2031.
Gov. Josh Shapiro’s proposed fiscal year 2025-2026 budget also seeks to lower the CNIT rate, but his plan follows a more gradual timeline, reducing it to 4.99% by 2029. Additionally, the proposal includes adopting uniform filing requirements for Pennsylvania corporations (combined reporting) in addition to including financial institutions to the tax base beginning Jan. 1, 2026. Read PICPA’s position on combined reporting.
By an 8-3 vote, the committee approved Senate Bill 473 sponsored by Sen. Kristin Phillips-Hill (R-York). The bill would expand the sales and use tax vendor discount, removing the $300 cap established in 2016 and reinstating a 1% discount on the tax collected by businesses that file timely sales tax payments.
The committee unanimously approved Senate Bill 211, sponsored by Sen. Michele Brooks (R-Mercer). This legislation would allow Pennsylvania taxpayers to donate all or a portion of their state income tax refund to the Office of the State Fire Commissioner. The donated funds would support grant programs for local fire companies, emergency medical service organizations, and volunteer rescue squads.
The three bills will advance to the Senate Appropriations Committee for a fiscal note review.
U.S. Supreme Court Passes on State and Local Tax Aggregation for Credits
The U.S. Supreme Court declined to review a decision of the Pennsylvania Supreme Court that state income taxes paid to other states cannot be used to offset local income tax due. The key issue was whether state and local taxes can be aggregated for the purpose of applying credits. There is a lack of consistency among states in this regard, which will continue until the Supreme Court settles the issue.
In the CPA Now blog post, Courts Keep Aggregation of State and Local Taxes for Credits at Bay … For Now, Dan A. Schulder and Heidi Schwartz of Cozen O’Connor discuss Zilka v. Tax Review Board, City of Philadelphia, a case the U.S. Supreme Court declined to review. The Pennsylvania Supreme Court had ruled that state income taxes paid to other states cannot be used to offset local income tax liabilities.
The question of whether state and local taxes should be aggregated for credit application purposes is likely to remain a subject of litigation until the U.S. Supreme Court addresses the issue. In the meantime, inconsistencies among states in applying the dormant Commerce Clause analysis to such crediting issues are expected to persist, conclude Schulder and Schwartz.
Bills Aim to Aid Those Affected by Northeast Philly Jet Crash
Two bills designed to assist residents and businesses impacted by the medical jet crash in Northeast Philadelphia advanced from the House Veterans Affairs and Emergency Preparedness Committee. The Jan. 31 crash of Med Jets Flight 056 significantly disrupted the local community of Castor Gardens.
House Bill 877, sponsored by Rep. Jared Solomon (D-Philadelphia), would provide grants and loans to affected businesses. The Pennsylvania Economic Development Financing Authority would distribute funds through community development financial institutions to offer technical assistance, training, and financial support, helping businesses to rebuild and reopen.
House Bill 1001, also sponsored by Solomon, would exempt recovery payments related to the crash from state income tax.
Both bills now move to the full House for consideration.
House Lawmakers Vote to Ensure Affordable Care Act Protections
State House lawmakers approved a package of bills designed to safeguard key provisions of the Affordable Care Act (ACA) at the state level in the event of federal rollbacks. Supporters argue that these measures will preserve existing health care protections in Pennsylvania, ensuring continuity of coverage and access to essential benefits, even if the federal government repeals or alters the ACA.
The package of bills includes the following:
- House Bill 404, sponsored Rep. Eddie Day Pashinski (D-Luzerne), would allow children to remain on their parent’s private health insurance plan up to the age of 26.
- House Bill 535, sponsored by Rep. Dan Frankel (D-Allegheny), would prohibit Pennsylvania insurers from capping coverage benefits.
- House Bill 618, sponsored by Rep. Jim Haddock (D-Luzerne), would prohibit Pennsylvania insurers from denying or excluding coverage based on preexisting conditions.
- House Bill 755, sponsored by Rep. Perry Warren (D-Bucks), would require Pennsylvania insurers to cover preventative health care services without cost-sharing.
The bills now move to the Pennsylvania Senate for consideration.
Employment Serving the Aged Drives Job Gains, Says IFO
A recent report from the Pennsylvania Independent Fiscal Office (IFO) highlights the impact of the state’s aging population on job growth. Since late 2019, more than half of Pennsylvania’s net new jobs have been in sectors that serve the elderly and disabled, including home health care, nursing facilities, and social assistance services. By 2024, all job gains were concentrated in government, health care, and accommodation-food services, underscoring the continued demand for essential care and support services.
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