SALT Blog - SALT Blawg

To ring in the New Year, the Texas Comptroller announced needed guidance to remote sellers and marketplace facilitators regarding sales and use tax obligations for businesses that do not have a physical presence in Texas but sell or facilitate sales to Texas customers. 

In 2018, the US Supreme Court decided the case, South Dakota v. Wayfair, in which the Court altered the decades-long standard that prevented states from imposing sales tax obligations on businesses unless they had a physical presence in the state.  In Wayfair, the Court replaced the physical nexus standard with an ...

On August 3, 2022, the Pennsylvania Commonwealth Court upheld a panel decision finding that a senior living facility failed to qualify as a “purely public charity” and therefore was not entitled to exemption from sales tax. See Friends Boarding Home of W. Quarterly Meeting v. Commonwealth, No. 332 F.R. 2018 (Pa. Commw. Ct. Aug. 3, 2022) (op. not reported).  In order to satisfy the requirements for a “purely public charity,” an institution must satisfy the five-part HUP test, which requires that an institution:

• Advance a charitable purpose;
• Donate or renders gratuitously a ...

Pennsylvania and Philadelphia have implemented important changes to their taxes, affecting both businesses and individuals.  Below are the highlights of those recent changes.   

Pennsylvania Tax Changes

Pennsylvania’s 2022-2023 Budget Bill (H.B. 1342), adopted July 8, 2022, implements significant corporate net income tax (CNIT) and personal income tax (PIT) changes for taxpayers.  While many taxpayers within Pennsylvania will be happy to hear of these changes, those outside of Pennsylvania may not be so jubilant.

CNIT Rate Reduction

Under the new law, the corporate net income ...

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 ...

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 ...