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Pennsylvania high court rules on business tax dispute

October 18, 2017

HARRISBURG, Pa. (AP) — Pennsylvania’s highest court is throwing out an element of the state’s business loss carry-over tax deduction, a case with implications for the state’s finances.

The state Supreme Court on Wednesday said the Revenue Department doesn’t have to refund $3.9 million to Nextel Communications of the Mid-Atlantic Inc. over its 2007 tax bill.

The case involves a provision of the state tax code that lets businesses use losses in prior years to lower their corporate net income tax liability.

The justices said a $3 million flat deduction for the net loss carryover provision wasn’t constitutional because it allowed some businesses to pay no income taxes, while others did.

They say that violates the Uniformity Clause of the Pennsylvania Constitution.

The Revenue Department is studying the decision, while lawmakers are considering measures to address it.

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