One of the advantages of using an experienced tax professional for tax preparation and tax planning services is that you are kept abreast of new tax law changes and developments.
PA Gov. Corbett has signed into law, effective January 1, 2014, that protects PA businesses from double taxation. House Bill 1513, now Act 42 of 2014, clarifies the assessment of the business privilege tax in PA by restoring predictability and fairness. This law is a response to a 2007 PA Supreme Court decision, Rendina Inc. v. Harrisburg and the Harrisburg School District, that created a great deal of uncertainty, and in some cases, the potential for double taxation of gross receipts. In Redina, the court ruled that a municipality can tax an entity that lacks a permanent base of operations within its borders. The new law will specifically prohibit municipalities, cities and other local governments from arbitrarily or excessively applying local business taxes to any company or employer that performs work within their boundaries for 15 days or less within the calendar year. Act 42 will also protect businesses from being charged the gross receipts tax twice by separate municipalities on the same gross receipts.
PA Representative Dunbar who sponsored the bill, stated that “What we have witnessed under previous law is that municipalities and other local governments were over-stretching to find ways to expand existing revenues.” “In doing so, many of them viewed out-of-area businesses as prime targets for increased taxation. Now that my legislation has become law, this double-taxation loophole is finally closed and all local business taxes can be collected fairly and equitably without stunting economic expansion and job creation.”
If you want to learn more about your business’s tax situation and how working with a tax professional will benefit you, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.
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