Senate must follow House to eliminate double taxation

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Pennsylvania businesses have been facing a troublesome tax situation. A Pennsylvania Supreme Court decision dismantled the traditional framework for determining business privilege tax and established the potential for double taxation of receipts for companies conducting business in multiple jurisdictions.

The Pennsylvania Institute of Certified Public Accountants applauds the state House for overwhelmingly approving a measure that will clarify when a political subdivision in Pennsylvania may levy a business privilege tax and eliminates potential for double taxation.

House Bill 1513 passed the House on Oct. 16 and will likely be referred to the Senate Finance Committee for further consideration. The bill defines “base of operations” and clarifies the scope of transactions that may be subject to local BPT.

It also will alleviate this problem by providing that a BPT be imposed only if the “privilege” of doing business is exercised through a “base of operations” in the local taxing jurisdiction, or if transactions are conducted more than 15 calendar days per year.

This bill is critical to the business community in Pennsylvania because it restores clarity and predictability to the assessment of the business privilege tax. The PICPA strongly supports House Bill 1513 because it is consistent with our Guiding Principle of Good Tax Policy.

If enacted, the bill would apply to taxable years beginning on or after Jan. 1, 2014.

Rep. George Dunbar (R-Westmoreland) is the bill’s prime sponsor. We encourage the Pennsylvania Senate to act quickly on this bill to ensure that the Pennsylvania business climate remains fair, reasonable, and favorable.

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