Local Business Privilege Taxes Limited


Governor Corbett has signed legislation (H.B. 1513, Act 42 of 2014) which establishes a threshold for local business privilege taxation and precludes double taxation.  The new law, applying outside of Philadelphia, authorizes the adoption of local taxes on gross receipts where the privilege of doing business is exercised by conducting transactions in the jurisdiction for 15 or more days in the calendar year or is exercised through a “base of operations” in the municipality or school district.  The law is effective for tax years beginning on or after January 1, 2014.


Receipts taxed in jurisdictions based on conducting transactions therein are excluded from tax in jurisdictions basing their tax on the presence of a base of operations.  A “base of operations” is an actual, physical and permanent place of business from which a taxpayer manages, directs and controls its business activities at that location.


This legislation does not expand existing taxes which, by their terms, are already more restrictive.



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.

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