In response to the COVID-19 coronavirus emergency, the City of Philadelphia Department of Revenue has issued the following:


The deadline to pay 2020 Real Estate Tax has been extended an additional 30 days.  The due date for 2020 Real Estate Tax is now April 30, 2020.

Additionally, the Department has extended the deadline to apply for an installment payment plan for 2020 Real Estate Tax.  All senior citizens over the age of 65, and eligible low-income homeowners can apply for this installment plan by April 30, 2020.  For more information about applying for a Real Estate Tax Installment Plan, please visit:



The deadline for filing and paying BIRT and NPT has been extended to July 15, 2020 to coincide with the IRS extensions granted to businesses.  This extension policy includes estimated payments and requires no additional action from businesses.



The Wage Tax policy has not changed.   Schedules to withhold and remit the tax to the City remain the same.  The Department of Revenue published the following guidance to ensure employees that are no forced to work from home understand the Wage Tax standard:

The City of Philadelphia uses a “requirement of employment” standard that applies to all non-residents whose base of operation is the employer’s location within Philadelphia. Under this standard, a non-resident employee is not subject to the Wage Tax when the employer requires him or her to perform a job outside of Philadelphia (i.e. their home).  A non-resident who works from home for the sake of convenience is not exempt from the Wage Tax- even with his or her employer’s authorization.   On the other hand, if a Philadelphia employer requires a non-resident to perform duties outside the city, he or she is exempt from the Wage Tax for the days spent fulfilling that work.  Non-resident employees who mistakenly had Wage Tax withheld during the time they were required to perform their duties from home in 2020, will have the opportunity to file for a refund with a Wage Tax reconciliation form in 2021.  The City of Philadelphia requires an employer to withhold and remit Wage Tax for all its Philadelphia residents, regardless of where they perform their duties.



The payment and filing deadline for the 2019 School Income Tax (SIT) remains April 15, 2020.  Taxpayers who cannot meet this deadline should use an extension payment coupon to submit a payment equal to the previous year’s liability by April 15, 2020.  Taxpayers have until July 15, 2020 to file a return and pay any difference in tax owed.  Taxpayers who overpay in April should indicate on their 2019 SIT return how the Department of Revenue should apply their overpayment.  Payments received after July 15, 2010 will accrue interest and penalty from April 15, 2020.  A payment coupon was mailed to taxpayers along with their return.  Taxpayers who need a payment coupon should visit the Department’s efile/epay website,



Businesses ordered to close beginning March 17, 2020 as a result of safety measures enacted by the Mayor of Philadelphia are not subject to the Use & Occupancy Tax while occupancy of their place of business is prohibited.  Businesses that are ordered to close by order of the Mayor beginning March 17, 2020, are not considered to “occupy” the space.  The due dates to pay the tax remain the same.  Businesses deemed essential, whether they choose to operate or not, are subject to Use & Occupancy Tax.  Businesses continuing operations, businesses that have employees on-site, or businesses that maintained employee occupancy to their place of business throughout the Mayor’s order, are also subject to Use & Occupancy Tax.  Landlords should file and remit the Use & Occupancy Tax collected from the tenants of the property still using their space for business purposes.

When filing, taxpayers should use “Line 3-Non-taxable Exempt Amount” of the filing form to indicate the portion of their property that was not occupied through the closure order.

Landlords who do not remit the tax, but have collected it through regular rent collection, must refund applicable portions of the tax to tenants.

Once the order to close non-essential businesses is lifted, all property legally available for business purposes, that has not been vacated, is subject to Use & Occupancy Tax.



The City of Philadelphia has enacted an emergency regulation (Special Regulation of the City of Philadelphia Department of Revenue and Law Department for Waiver of Interest and Penalties for Late Filing and Payment Due to COVID-19 emergency) to provide for the abatement of interest and penalties on real estate tax, business income and receipts tax (BIRT), net profits tax (NPT) and school income tax (SIT) paid by the extended deadlines provided by various emergency orders signed by the Mayor.  The regulation abates interest and penalties on the following:

  1. tax year 2020 real estate taxes paid no later than April 30, 2020;
  2. 2019 BIRT and 2019 NPT taxes, and 2020 estimated BIRT and NPT taxes filed and paid no later than July 15, 2020; and
  3. 2019 school income taxes where the taxpayer pays amount equal to the amount due for 2018 by April 15, 2020 and files a 2019 return and pays any balance due by July 15, 2020.


For any questions related to the City of Philadelphia Department of Revenue’s tax guidance in response to COVID-19, please contact Paul Morcom, Esquire at 717-237-5364 or Sharon Paxton, Esquire at 717-237-5393.

The Department of Revenue has announced that the stimulus checks, otherwise known as economic impact payments, being distributed by the Federal government are not subject to Pennsylvania personal income tax. Rather, the payments being distributed as part of the Federal economic stimulus legislation that was signed into law in March in response to the COVID-19 pandemic, will be considered a rebate that is non-taxable in Pennsylvania.

The Department has also clarified that the stimulus checks will not be considered as income for applicants of the Property Tax/Rent Rebate Program.  Further, the deadline for older adults and Pennsylvania residents with disabilities to apply for rebates on rent and property taxes paid in 2019 has been extended from June 30 to December 31, 2020.


The Department of Revenue’s offices and customer service call centers are currently closed as the commonwealth takes steps to help slow the spread of COVID-19 in Pennsylvania. As a result, the Department of Revenue is extending all business tax licenses and certifications that are set to expire until further communication is received from the department.

This extension applies to:

·     Sales, Use and Hotel Occupancy tax licenses

·     Public Transportation Assistance (PTA) Fund taxes and fees

·     Small Games of Chance Manufacturer Certificates

·     Sales Tax Exemption Certificates

·     If you need documentation of the sales tax exemption extension, please use the department’s Online Customer Service Center to submit a question. If your religious organization’s sales tax exemption certificate is due to expire on March 31, 2020, the Department of Revenue is issuing an extension letter. If documentation is needed, religious organizations are encouraged to contact their parent institutions to obtain the extension letter.

The Online Customer Service Center, available at, can be used to electronically submit a question to a department representative. The department representative will be able to respond through a secure, electronic process that is similar to receiving an email. Additionally, the Online Customer Service Center includes thousands of answers to common tax-related questions.

For more alerts from the Department of Revenue during the COVID-19 pandemic, check out the department’s COVID-19 information page.

Board of Finance and Revenue
Operations Under the Exigent Circumstances Created by the Public Health Emergency
March 26, 2020

In order to protect public health and in recognition of the Proclamation of Disaster Emergency issued by Governor Tom Wolf on March 6, 2020, and the national emergency that was declared by the President of the United States on March 13, 2020, the Commonwealth of Pennsylvania Board of Finance and Revenue (“Board”) hereby issues the following notice:

Effective immediately and until further notice:

  • Hearings. Any public hearings scheduled to be held in the Board of Finance and Revenue Courtroom, 1101 South Front Street, Suite 400, Harrisburg, PA 17104 or teleconferenced from the Allegheny Bar Association 322 Koppers Building, 436 Seventh Avenue, Pittsburgh, PA 15219, will be conducted telephonically pursuant to the attached schedule, pending further notice of the Board.
  • Oral Hearing Waiver. The petitioner may waive its right to an oral hearing and the Board will decide the appeal based on the submissions. The reconsideration process will be available to the parties.  Oral hearing waivers shall be submitted to no later than 48 hours prior to the scheduled hearing.
  • Continuance Requests. Either party may request a continuance to a future hearing.
  • Hearing Reply Notice. To participate in a telephonic hearing, the petitioner must electronically submit the hearing reply to the Board via email at least 10 days prior to the scheduled hearing. Telephonic hearings will be conducted according to the attached Board of Finance and Revenue Guidelines for Telephonic Hearings and the attached schedule. No adjustments will be made to the hearing schedule except for exigent circumstances.
  • Failure to Submit a Hearing Reply Notice. If the petitioner fails to timely submit a hearing reply notice, the Board will decide the appeal based on the submissions. Issuance of Orders may be delayed as a consequence of restricted workplace access.
  • Recording Hearings.  In order to assist the Board in maintaining a record of proceedings before it, telephonic hearings will be recorded.
  • Board Orders.  Every effort will be made to issue Board Orders electronically after the hearings. However, issuance of Orders may be delayed as a consequence of restricted workplace access.
  • Board Filings and Correspondence.  Board personnel are available to receive electronic filings of tax appeals, liquid fuels claims and other correspondence submitted to the Board via email to
  • Deadlines and Extensions. Appeals to the Board from the Board of Appeals will continue to be considered timely filed based on the:
    • United State Postmark or other commercial delivery service as approved by Board regulations; or
    • date an email is received (; or
    • the Board’s timestamp on a facsimile transmission (717-783-4499); or
    • date of the hand-delivery (when the office is physically open).

Written requests by parties to accept late filed appeals due to disruptions caused by the public health emergency will be liberally granted.

Requests for deadline extensions for responsive pleadings due to disruptions caused by the public health emergency will also be liberally granted.

All such requests shall be in writing and clearly state the disruption causing the late filing or request for extension.

Jacqueline A. Cook, Chairman
Designee for Joe Torsella, State Treasurer

David R. Kraus, Member

Paul J. Gitnik, Member

Board of Finance and Revenue
Guidelines for Telephonic Hearings

  1. The Board of Finance and Revenue (“Board”) shall provide the parties with the call information including the date and time of the hearing and the toll-free call-in number and the access code. There will be a different call in number for the morning hearings and the afternoon hearings. It is the responsibility of the representatives to provide this information to their clients.
  2. All parties must call into the conference line indicated on the schedule for morning or afternoon sessions at least five minutes before the scheduled starting time of their assigned call in for the morning or afternoon session.
  3. All telephonic proceedings will be recorded. Such recordings shall be the official record and will be available to the public in accordance with Board policy.
  4. When the Board is ready to hear a particular petition, that petition will be called for a hearing.
  5. To maintain sound clarity, please place the call on mute until your petition is called for hearing.
  6. Each time a telephonic party speaks, the speaker should identify themselves. Parties shall refrain from speaking until called by a board member.
  7. When the Board informs the participants that the hearing is completed, the telephonic participant may disconnect, and the next petition will be called.
  8. If a party does not timely call and connect to the scheduled hearing, the hearing may proceed in their absence, and the Board may decide the appeal.
  9. Issuance of Orders may be delayed under these circumstances.

NOTICE: In the event parties experience connectivity issues when attempting to connect to the call, the party must notify the Board immediately by emailing to

Board of Finance and Revenue
Time Schedule for April Hearings

  • April 7th 9 a.m. (Morning call in number: 1-888-251-2909 Access code: 8091742)
    • Corporation Tax
      • #101-102  Costco Wholesale Membership Inc. (1815877, 1815878) Michele Borens
      • #111 Energy Power Investment Company LLC (1905743) Roger Seminara
      • #128  Lancaster Buffet Inc. (1909928) William Spade
    • Personal Income Tax
      • #4 Simeon and Eleanor D Isayeff (1913026) Simeon Isayeff
      • #5 Robert and Shelley M Casciato (1913440) Simeon Isayeff
      • #23 Shawmak Associates (1819430) William Rosoff
  • April 7th 1 p.m. (Afternoon call in number: 1-888-808-6929 Access code: 6875209)
    • Miscellaneous Tax
      • #1 Fazliddin Kalanov (1910627) Douglas Roeder
      • #9 Jerome and Lori Marcus (1823979) Jerome Marcus
      • #10 Shandra S. Kisailus (1906737, 1906741) Samantha Wolfe
    • Sales Tax
      • #6 Vintage Garden Florist (1915953) Cindy Curtis
      • #29 Markop Inc. (1912612) Douglas Roeder
  • April 8th 9 a.m. (Morning call in number: 1-888-251-2909 Access code: 8091742)
    • Corporation Tax
      • #129-130 Ansaldo STS USA Inc. (1916129, 1916208) Charles Potter
    • Personal Income Tax
      • #21 Alfred A. Kuehn (1906995) Charles Potter
      • #24 Gary and Patti Pagenkopf (0813548) Charles Potter
      • #25 Jennifer L. Gordon (0822642) Charles Potter
      • #26 Richard Cray (0812900) Charles Potter | Board of Finance & Revenue | 717-787-2974 | Joe Torsella, State Treasurer

On March 21, 2020, the Pennsylvania Department of Revenue announced that the deadline for taxpayers to file their 2019 Personal Income Tax Returns is extended to July 15, 2020.  This means taxpayers will have an additional 90 days to file from the original deadline of April 15.  The Internal Revenue Service also extended the federal filing deadline to July 15, 2020.

The Department of Revenue will also waive penalties and interest on 2019 personal income tax payments through the new deadline of July 15, 2020.  This extension applies to both final 2019 tax returns and payments, and estimated payments for the first and second quarters of 2020.

For any questions related to Pennsylvania state and local tax issues, please contact Paul Morcom, 717-237-5364 ( or Sharon Paxton, 717-237-5393 (

On January 31, 2020, the Pennsylvania Department of Revenue (“Revenue”) issued Letter Ruling No. SUT-20-001, which concluded that the taxability of a membership fee in a professional association depends upon what a member receives in exchange for the membership.  If the member does not receive any taxable tangible personal property or taxable services in exchange for the fee, then the fee is not taxable.  However, if a member receives taxable tangible personal property or taxable services in exchange for the membership fee, then the fee is taxable.  Revenue notes that a membership fee in and of itself is not taxable because it is not an enumerated taxable service.  However, if the membership fee includes the transfer of taxable tangible personal property, in addition to nontaxable services, the entire charge for the membership fee is subject to tax if it is not separately stated from the taxable tangible personal property under Downs Racing, LP v. Commonwealth, 196 A.3d 603, 611 (Pa. 2018).  In the fact pattern contained in the Letter Ruling, Revenue determined that the membership fees were subject to Pennsylvania sales tax on members located in Pennsylvania because the members received taxable tangible personal property (published guide, tools and templates, on demand webinars, and publications) along with nontaxable services (networking opportunities, discounts on certifications, and certification tracking).  Additionally, Revenue nixed application of the “essence of transaction test,” by pointing out that the Pennsylvania Supreme Court has never endorsed that test.

This Letter Ruling has the potential to cause a host of problems for professional associations that charge membership fees.  If you are a professional association charging membership fees, it is in your best interest to determine what is included with your paid membership and whether or not any of those membership benefits are taxable.  However, if they are taxable, how do you quantify the separate value for taxability purposes?  If you haven’t been separately stating taxable and nontaxable membership fees, what is your potential audit risk?

If you have questions about the Letter Ruling or any state tax matter, please feel free to contact a member of the McNees State and Local Tax team.

Click here for Letter Ruling



Effective January 1, 2020 to December 31, 2020, the rate of interest on underpayments of Pennsylvania taxes will be 5% per annum.  Additionally, the rate of interest on overpayments of tax will be 3% per annum (except for personal income tax overpayments, which accrue interest at the same rate as for underpayments).  See Interest Rate Notice, Pa. Dept. Rev., PA. Bull. Doc. No. 19-1949, Pa. Bull. Vol. 49, No. 52, 12/28/19.  For perspective purposes, the interest rates for 2019 were 6% for underpayments and 4% for overpayments.

For any questions related to interest calculations or just Pennsylvania state and local tax questions in general, please contact Paul Morcom at 717-237-5364 or Sharon Paxton at 717-237-5393.

On September 30, 2019, the Pennsylvania Department of Revenue issued Corporation Tax Bulletin 2019-4 giving guidance on nexus for Corporate Net Income Tax purposes (“Bulletin”).

The Bulletin recites constitutional underpinnings of nexus, noting that the federal underpinnings of a state’s jurisdiction to tax is based on both the Due Process and the Commerce Clauses of the United States Constitution. A state’s jurisdiction to tax under the Due Process Clause “requires some definite link, some minimum connection, between and state and the person, property or transaction it seeks to tax.” Quill Corp. v. North Dakota, 504 U.S. 298, 306 (1974). Traditionally, the Bulletin states, this standard is met by showing that the entity has purposefully directed its activity into a jurisdiction. In the case of sales taxes, the Quill decision made clear that physical presence was a requirement.

For Commerce Clause purposes, a more rigorous standard has been set by precedent. In Complete Auto Transit v. Brady, 430 U.S. 274 (1977), the United States Supreme Court held that in order for a state tax to be valid under the Commerce Clause, it must:

(1) Apply to an activity with a substantial nexus to the taxing state;

(2) Be fairly apportioned;

(3) Not discriminate against interstate commerce; and

(4) Be fairly related to the services the state provides.


Building upon that foundation, in June 2018, the United States Supreme Court handed down Wayfair v. South Dakota, 138 S.Ct. 2080 (2018). The Bulletin focuses on the Wayfair discussion of “physical presence” not being a necessary factor for nexus. While the Bulletin notes that whether the “physical presence” standard also applied to net income tax (the Quill case dealt with sales tax) was an open question, the Bulletin sets forth the Department’s position that “at least prospectively, no physical presence standard exists for purposes of limiting the ability of a state to impose a net income tax on an out of state taxpayer as long as the constitutional requirements under the Due Process and Commerce Clauses of the United States Constitution are satisfied.” Bulletin, p.2.

The Bulletin states that Wayfair has confirmed that out of state corporations are considered to be doing business in Pennsylvania and/or carrying on activities in Pennsylvania to the extent they are taking advantage of the economic marketplace of the Commonwealth regardless of whether they are physically present in Pennsylvania. Therefore, the Bulletin makes clear the Department will require such taxpayers to begin filing Corporate Tax Reports if they meet the minimum thresholds for nexus under the United States Constitution. In fact, the Department will deem there to be a rebuttable presumption that those taxpayers having $500,000 or more of direct or indirect gross receipts from any combination of the following, sourced to Pennsylvania pursuant to the sales factor rules contained in 72 P.S. §7401, have nexus:

(1) Gross receipts from the sale, rental, lease or licensing of tangible personal property;

(2) Gross receipts from the sale of services; and/or;

(3) Gross receipts from the sale or licensing of intangibles, including franchise agreements.

The Bulletin recognizes that taxpayers without physical presence in the Commonwealth still may have the protection of P.L. 86-272. In that case, taxpayers should continue to file an RCT-101 and compete the necessary schedules to claim the exemption.

Finally, the Bulletin notes that the taxpayers with nexus as provided for in the Bulletin should file Corporate Tax Reports starting on or after January 1, 2020.

If you have questions about the Bulletin or any state tax matter, please feel free to contact a member of the McNees State and Local Tax team.



Our annual SALT seminar is attended by over 100 people interested in learning about the latest development in Pennsylvania state and local taxes.  Once again, the 2019 McNees SALT Seminar will be held at the Hollywood Casino in Grantville, Pennsylvania.  We are now in the process of planning a seminar that will provide valuable content.   More details will follow, but for now, please save the date of Friday, November 1, 2019!  We look forward to seeing you on November 1!

The Pennsylvania General Assembly recently passed an amendment to the state’s sales tax law that will be of interest to breweries operating taprooms in Pennsylvania. Effective October 1, 2019, breweries must begin collecting sales tax on each individual retail sale to patrons, but on a reduced tax base intended to approximate the amount of tax due at the wholesale level. The change in the law is a compromise measure intended to place breweries and other retail establishments on equal footing. While breweries will have to begin collecting sales tax on their products sold at taprooms, the special tax base makes for a much easier pill to swallow than what was initially floated by the Pennsylvania Department of Revenue (“DOR”).

Generally, Pennsylvania imposes sales tax on the sale of liquor and malt or brewed beverages at the wholesale level.  The sale of alcoholic beverages to patrons by bars and restaurants with retail liquor licenses is not subject to tax. A plain reading of the sales tax statute could have permitted the DOR to require the collection of tax on all sales of beer by a manufacturer without a “retail” liquor license. (Brewery and brewery pub licenses are not considered “retail” liquor licenses.) However, sales tax historically was not collected on taproom sales.

Then, in July 2018, the DOR issued Sales Tax Bulletin No. 2018-02, which indicated that, effective January 1, 2019 (later extended to July 1, 2019), Pennsylvania breweries would be required to collect sales tax on all product sold to the public for on-premises or off-premises consumption. Breweries were given an option to include the sales tax in the advertised price of their product or to separately state and charge sales tax on each individual sale.

The sales tax on taproom sales was going to be imposed on the full retail price of the beer.  Thus, taproom sales would have been subject to a much higher effective tax rate than the tax rate imposed on traditional beer sales at the wholesale level. The craft beer industry fought for “tax parity,” and the result was an amendment to the tax code whereby sales tax will be imposed on only 25% of the retail sales price of malt or brewed beverages sold by a manufacturer directly to the ultimate consumer for consumption on or off the premises. This is intended to approximate the amount of tax that would be due at the wholesale level. The tax code amendment is effective for sales occurring after September 30, 2019. The delayed effective date will allow breweries time to update their systems to comply with the new sales tax rules.