SALT Blog - SALT Blawg

On February 28, 2023, the Pennsylvania Supreme Court issued its evenly divided opinions in GM Berkshire Hills LLC v. Berks County Board of Assessment Appeals, 16 MAP 2022 (“Berkshire”).  In Berkshire, the Wilson School District (“WSD” or “school district”) adopted a policy of appealing recently sold properties that were potentially underassessed by at least $150,000. The Pennsylvania Supreme Court granted cert, agreeing to review two issues:

• whether the school district’s selective real estate tax assessment appeals violate the uniformity clause when the ...

The SALT deduction cap, enacted by a Republican-controlled Congress in 2017, is a quagmire for Democrats.  They’ve made promises to repeal it, and have made a wedge issue out of it.  But repealing the cap would be regressive (it would benefit higher-income earners), which contradicts the party’s broader platform. 

Aside from repeal, leaders in the kill-the-cap campaign have sought to undo the SALT deduction cap by challenging its constitutionality in court and by enacting State statutes that seek to end-run the cap (known as “workaround statutes”).  But challenges to the ...

Since 2017 when the Tax Cuts & Jobs Act was enacted and placed a hard cap on state and local tax deductions, critics of the cap have campaigned to reverse it.  These critics (as well as the cap’s proponents) hail from every walk of life and political stripe.  But the mantel against the cap has been taken on most prominently by the Democratic Party and a handful of high-tax States that in recent election cycles have tended to vote Democrats into office, often labeled “Blue States.”  The efforts to overturn the cap have been three-fold: (1) state workaround statutes that seek to end-run the ...

The City of Philadelphia Department of Revenue issued Frequently Asked Questions (“FAQs”) regarding its Wage Tax policies in light of COVID-19.  Philadelphia applies the “requirement of employment” test in order to determine whether a non-resident’s base of operations is the employer’s Philadelphia location. If a Philadelphia employer requires a non-resident employee to perform duties outside of Philadelphia (including working from home), that employee is exempt from the Wage Tax for those days spent fulfilling that requirement.  However, if a non-resident ...

In response to various issues created by COVID-19, the Philadelphia Department of Revenue (“Department”) has issued guidance to taxpayers related to the City’s Wage Tax, Use & Occupancy (“U&O”) Tax, and Business Income & Receipts Tax (“BIRT”).Wage Tax

On November 5, 2020, the Department issued revised guidance regarding Wage Tax withholding requirements for Philadelphia-based employers.  This is not a change in position; the guidance serves to explain the City’s policy that was in effect pre-COVID.  The guidance explains that Philadelphia applies the ...

A Texas appellate court handed down on August 13 reminds taxpayers that the Texas Comptroller refund procedures are laden with traps for the unwary. 

Comptroller Seeks to Dismiss Refund Suit

In the case, Hegar v. El Paso Elec. Co., the taxpayer, El Paso Electric, sued the Texas Comptroller for refund in district court on grounds that it had paid taxes on equipment that qualified for Tax Code section 151.318(a)(4)'s exemption for “telemetry units that are related to ... step-down transformers.”.  No. 03-18-00790-CV (Tex. App. Aug. 13, 2020).  The Comptroller pled that El Paso ...

The Internal Revenue Service is scheduled to publish its final regulations addressing attempts to end-run the 2017 Tax Cuts and Jobs Act’s cap on state and local tax deductions.

As readers will recall, prior to the TCJA’s amendment to Section 164 in December 2017, taxpayers were able to deduct the full amount of their state and local taxes (mostly property taxes and income taxes), subject to the limitation on itemized deduction.  The TCJA added Section 164(b)(6) which limits the aggregate deduction of these taxes to $10,000 (less if not filing a joint return).

This little provision ...

The City of Philadelphia has responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, 585 US. ___ (2018), amending its Business Income and Receipts Tax (“BIRT”) regulations to impose economic nexus.  The City’s BIRT is imposed annually upon every person engaging in any business in the City; it is a privilege tax, taxing the “privilege” of doing business in Philadelphia. [Phila. Code §19-2603].

The BIRT has two components: a net income component and a gross receipts component.  Prior to 1998, both portions of the BIRT were subject to the solicitation ...

The Philadelphia Department of Revenue (“DOR”) has issued two new forms of guidance addressing issues raised by the federal Tax Cuts and Jobs Act of 2017 (“TCJA”).  First, on January 16, the DOR issued an Advisory Notice regarding the deductibility of employee business expenses in light of the TCJA.  For tax years 2018 through 2025, the TCJA eliminates most miscellaneous itemized deductions for individuals, including deductions for employee business expenses.  Further, moving expenses are no longer deductible for federal income tax purposes for those tax years.  In ...

Effective July 1, 2019, amendments have been made to Section 202 of the Business Income and Receipts Tax (“BIRT”) Regulation, which will have an effect on taxpayers starting business activity within Philadelphia during calendar year 2019 and thereafter. 

Previously – and still in effect for those taxpayers that commenced business during tax years 2018 and prior – a new business was required to not only pay the tax due for the first year of operation, but also make a 100% estimated tax payment in the amount of the first year tax liability.

The Amendments now allow taxpayers some ...