Bipartisan Push for Royalty Addbacks


In January 25th, Pennsylvania House Members Dave Reed and Eugene DePasquale, together with 62 bipartisan cosponsors, introduced legislation (HB 2150, PN 3019) to disallow deductions under Pennsylvania’s Corporate Net Income Tax (CNI) for royalties paid to affiliated entities.  Reed is Chairman of the House Majority Policy Committee; DePasquale is the endorsed candidate for the Democratic nomination for Auditor General, Pennsylvania’s statewide fiscal watchdog office.  Although it is not clear at this point whether this legislation may gain support in the PA Senate or the Governor’s Office, we believe it should be taken seriously because of the degree of bipartisan support in the House.

In its present form, the bill provides for addback of royalties paid to affiliated entities.  Additional revenues generated by the addback would be used to (a) phase-down Pennsylvania’s 9.99% CNI rate to 6.99% by 2019; (b) immediately implement single sales factor apportionment (current weighting is 90%); and (c) over a period of years, eliminate the current cap on net loss carryforwards.  The rate-reduction, single sales factor and elimination of the loss cap are tax reforms long sought by Pennsylvania’s business community.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McNees Wallace & Nurick LLC | Attorney Advertising

Written by:


McNees Wallace & Nurick LLC on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.