State and Local Taxation: Nextel, Slight Reprise

PA TaxOne of the more important Pennsylvania tax cases decided last year was Nextel Communications of the Mid-Atlantic, Inc. v. Commonwealth, 129 A.3d 1 (Pa. Commw. 2015). Decided under the Corporate Net Income Tax, Nextel held that the net loss carryover provision of 72 P.S. § 7401(3)4.(c)(1)(A) violated the Uniformity Clause of the Pennsylvania Constitution because it treated taxpayers with small operating losses more favorably by permitting them to offset their losses against all of their taxable income, while taxpayers with large losses could not. Nextel, 129 A.3d at 9. Specifically, in the 2007 tax year, which was at issue in Nextel, taxpayers could deduct the greater of $3,000,000 or 12.5% of taxable income.… Read More