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Pennsylvania Amends When Local Government Can Tax Companies


 Do you do business in Pennsylvania? Are you required to file taxes?

Prior to introducing an amendment to Pennsylvania’s Local Tax Enabling Act last year, Representative Dunbar (R) pointed out that tax policy should be fair and certain. He argued that the existing Local Tax Enabling Act was neither and that his proposed amendments would “remove ambiguity and … make it absolutely clear when a municipality may tax a company performing work within its borders."

Those amendments, recently approved as Act 42, take effect retroactively on January 1, 2014. They allow local tax authorities to impose a tax upon businesses for the privilege of doing business in the jurisdiction, provided:

  • “The privilege is exercised by conducting transactions in the jurisdiction of the levying local tax authority for all or part of 15 or more calendar days within the calendar year;” or
  • "The privilege is exercised through a base of operations in the jurisdiction of the levying local taxing authority."

“Base of operations” is defined as “an actual, physical and permanent place of business from which a taxpayer manages, directs and controls its business activities at that location.”

The newly amended Local Tax Enabling Act should provide a bright-line test, allowing little or no room for ambiguity.

It can be difficult for businesses selling into multiple jurisdictions to keep up with changing tax requirements. Learn how an automated solution works.

photo credit: auntiepauline via photopin cc


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.