State and Local Taxation: Refund Awarded in Pennsylvania Uniformity Challenge

PA TaxNextel had a very happy Thanksgiving.

Just a few days before the holiday, the Commonwealth Court of Pennsylvania issued a decision awarding it a $3.9 million refund in a challenge to the structure of the net loss carryover (NLC) provision of Pennsylvania’s Corporate Net Income Tax. Nextel Comms. of the Mid-Atlantic, Inc. v. Commonwealth, No. 98 F.R. 2012, 2015 Pa. Commw. LEXIS 520 (Pa. Commw. Nov. 23, 2015). Nextel’s argument was that the structure of the NLC provision improperly treated taxpayers differently based upon their income, in violation of the Uniformity Clause of the Pennsylvania Constitution, which provides that “[a]ll taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax.… Read More

A Page of History: The Pennsylvania Supreme Court Sustains Gross Receipts Tax, Rejecting Verizon’s Challenge

phone operatorSometimes, “a page of history is worth a volume of logic.” New York Trust Co. v. Eisner, 256 U.S. 345, 349 (1921).

Since 1866, Pennsylvania has imposed a gross receipts tax on a variety of businesses, including every “pipeline company, conduit company, steamboat company, canal company, slack water navigation company, [and] transportation company” operating within the Commonwealth. 72 P.S. § 8101(a). The tax reaches revenue derived from a variety of business activities, including gross receipts received from “telegraph or telephone messages transmitted wholly within this State and telegraph or telephone messages transmitted in interstate commerce where such messages originate or terminate in this State and the charges for such messages are billed to a service address in this State.” 72 P.S.… Read More