Pennsylvania Enacts Changes to Tax Laws

PATaxesOn July 9, 2013, Pennsylvania Governor Tom Corbett signed into law House Bill 465 which included changes that will certainly seem like a tax increase for many companies doing business in Pennsylvania.  The more notable changes include:

  • The corporate Capital Stock and Franchise tax was scheduled to be eliminated after 2013. The tax has been extended through 2015.
  • For tax years after 2014, Pennsylvania will require a Corporate Net Income Tax addback for intangible expenses and interest expenses related to an intangible and paid to an affiliated entity. Pennsylvania joins the ranks of states that require adding back to income related party payments.
  • For tax years after 2013, Pennsylvania will change to a market based sourcing of sales. Currently Maryland uses this method of sales sourcing.
  • For tax years after 2013 the limitation on the amount of net operating losses that can be used will be increased.
  • The corporate tax late filing fee is increased to $500 plus 1% of any tax over $25,000.

The State and Local Tax Group (SALT) Group at KatzAbosch is available to help minimize your state tax obligations.

Please contact the SALT Group if you have any questions regarding any SALT issues or would like a review of your state tax compliance opportunities.  Phone: 410-828-2727, or email: abareham@katzabosch.com

Prepared by Andy Bareham, Chair of the KatzAbosch SALT Group

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