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March 14, 2008 Update... |
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Advisory
Update: Important Tax News for PA Contractors
Area contractors need to be aware of a recent PA Supreme Court decision (V.L.
Rendina Inc. v. City of Harrisburg and Harrisburg School District) that may
have an impact on their bottom line. The ruling, which reversed the
Commonwealth Court’s earlier decision, essentially holds that simply doing
business in a municipality may subject a contractor to that municipality’s
business privilege tax. Previously, the determining factor for business
privilege tax applicability was whether the contractor maintained a “base of
operations” within the municipality.
While the definitions and implications are less than crystal clear in
certain cases, this ruling may have implications for bottom-line sensitive
activities such as bidding. If your company is in the process of bidding
work in a specific municipality, and you’re unsure about the business tax
rate or whether it applies, please contact a member of Case | Sabatini’s
construction practice group.
For further information, contact James Dee at 412-881-4411.
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Disclaimer: To ensure
compliance with requirements imposed by the Internal Revenue Service, we
inform you that any tax advice contained in this communication (including
any attachments) was not intended or written to be used, and cannot be used,
for the purpose of (i) avoiding any penalties that may be imposed, or (ii)
promoting, marketing, or recommending to another party any transaction or
matter addressed herein. |
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