Jim Malone Discusses a Recent PA Commonwealth Court Corporate Tax Decision with Bloomberg BNA's Daily Tax Report
In the December 5 article, "$3.9M Refund to Sprint Subsidiary Signals Potential Relief for Corporate Taxpayers," James R. Malone, Jr. provides analysis of the Pennsylvania Commonwealth Court decision in Nextel Communications of the Mid-Atlantic, Inc. v. Commonwealth of Pennsylvania.
The 5-2 decision, made by an en banc panel of the court, "held that a statutory limitation on Pennsylvania’s net loss carryover (NLC) deduction, as applied to a former Sprint subsidiary, violated the state’s uniformity clause." 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. . . .”
In discussing the case and decision, Mr. Malone noted, "The dispute in the case, among the Commonwealth Court members, is not over whether there is a problem with the structure of the tax, it’s over how we would fix it."