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SALT Blawg

State and Local Tax Blog

SALT Blawg – State and Local Tax Blog

State and Local Tax ("SALT") blog issues require state and local tax knowledge. Chamberlain Hrdlicka's SALT Blawg provides exactly that knowledge with news updates and commentary about state and local tax issues.

You can expect to find relevant information about topics such as income (corporate and personal) tax, franchise tax, sales and use tax, property (real and personal) tax, fuel tax, capital stock tax, bank tax, gross receipts tax and withholding tax. SALT Blawg, offers tax talk for tax pros … in your neighborhood.

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The City of Philadelphia Department of Revenue issued Frequently Asked Questions (“FAQs”) regarding its Wage Tax policies in light of COVID-19.  Philadelphia applies the “requirement of employment” test in order to determine whether a non-resident’s base of operations is the employer’s Philadelphia location. If a Philadelphia employer requires a non-resident employee to perform duties outside of Philadelphia (including working from home), that employee is exempt from the Wage Tax for those days spent fulfilling that requirement.  However, if a non-resident ...

In response to various issues created by COVID-19, the Philadelphia Department of Revenue (“Department”) has issued guidance to taxpayers related to the City’s Wage Tax, Use & Occupancy (“U&O”) Tax, and Business Income & Receipts Tax (“BIRT”).Wage Tax

On November 5, 2020, the Department issued revised guidance regarding Wage Tax withholding requirements for Philadelphia-based employers.  This is not a change in position; the guidance serves to explain the City’s policy that was in effect pre-COVID.  The guidance explains that Philadelphia applies the ...

Categories: SALT, SALT Update

A Texas appellate court handed down on August 13 reminds taxpayers that the Texas Comptroller refund procedures are laden with traps for the unwary. 

Comptroller Seeks to Dismiss Refund Suit

In the case, Hegar v. El Paso Elec. Co., the taxpayer, El Paso Electric, sued the Texas Comptroller for refund in district court on grounds that it had paid taxes on equipment that qualified for Tax Code section 151.318(a)(4)'s exemption for “telemetry units that are related to ... step-down transformers.”.  No. 03-18-00790-CV (Tex. App. Aug. 13, 2020).  The Comptroller pled that El Paso ...

The Internal Revenue Service is scheduled to publish its final regulations addressing attempts to end-run the 2017 Tax Cuts and Jobs Act’s cap on state and local tax deductions.

As readers will recall, prior to the TCJA’s amendment to Section 164 in December 2017, taxpayers were able to deduct the full amount of their state and local taxes (mostly property taxes and income taxes), subject to the limitation on itemized deduction.  The TCJA added Section 164(b)(6) which limits the aggregate deduction of these taxes to $10,000 (less if not filing a joint return).

This little provision ...

The City of Philadelphia has responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, 585 US. ___ (2018), amending its Business Income and Receipts Tax (“BIRT”) regulations to impose economic nexus.  The City’s BIRT is imposed annually upon every person engaging in any business in the City; it is a privilege tax, taxing the “privilege” of doing business in Philadelphia. [Phila. Code §19-2603].

The BIRT has two components: a net income component and a gross receipts component.  Prior to 1998, both portions of the BIRT were subject to the solicitation ...

The Philadelphia Department of Revenue (“DOR”) has issued two new forms of guidance addressing issues raised by the federal Tax Cuts and Jobs Act of 2017 (“TCJA”).  First, on January 16, the DOR issued an Advisory Notice regarding the deductibility of employee business expenses in light of the TCJA.  For tax years 2018 through 2025, the TCJA eliminates most miscellaneous itemized deductions for individuals, including deductions for employee business expenses.  Further, moving expenses are no longer deductible for federal income tax purposes for those tax years.  In ...

Effective July 1, 2019, amendments have been made to Section 202 of the Business Income and Receipts Tax (“BIRT”) Regulation, which will have an effect on taxpayers starting business activity within Philadelphia during calendar year 2019 and thereafter. 

Previously – and still in effect for those taxpayers that commenced business during tax years 2018 and prior – a new business was required to not only pay the tax due for the first year of operation, but also make a 100% estimated tax payment in the amount of the first year tax liability.

The Amendments now allow taxpayers some ...

On January 9, 2019, the U.S. Supreme Court heard oral arguments in the case of Franchise Tax Board of California v. Hyatt, No. 17-1299.  A copy of the oral argument transcript can be accessed here.

In Hyatt, the Supreme Court is again revisiting the question of whether one state can be sued in another state’s courts.  The Hyatt litigation has been ongoing for two decades and has been before the U.S. Supreme Court on two previous occasions.  The case involves damages sought by Gilbert P. Hyatt for several torts allegedly committed by the Franchise Tax Board of California (“FTB”) in its ...

The Pennsylvania Department of Revenue (“Department”) issued Sales and Use Tax Bulletin 2019-01 in response to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, 585 U.S. ___ (2018). The Bulletin clarifies when marketplace and remote sellers, marketplace facilitators, and other vendors maintain a place of business in the state in light of Wayfair.

Wayfair upheld a South Dakota law that imposed economic nexus upon taxpayers who had $100,000 of sales or 200 transactions within the state in a given year. Previous U.S. Supreme Court case law, Quill Corp. v. North ...


By: Jennifer Weidler Karpchuk

Pennsylvania recently joined 29 other states and D.C. in legalizing medical marijuana. With the growing acceptance of the use of marijuana for medicinal — and in some states, recreational — purposes, a new industry booms. With that boom comes revenue to the states in the form of new taxes.

As with any tax and policy, it is important to understand the history of how we got to where we are today. But it is particularly important to see what has framed our cultural views of marijuana. Medicinal marijuana has a long history, dating back to ancient cultures ...