December 2, 2020
(Associated Pennsylvania Constructors (APC)) PennDOT Projects to Continue – Shutdown Avoided (For Now). APC received reports that a meeting was held on November 30, 2020 with Governor Wolf and legislative leaders that will, for now, avoid a shutdown of PennDOT construction and design contracts.
Indications are that State Treasurer Joe Torsella is working with Budget Secretary Jen Swails to find monies to keep PennDOT operating. APC is hopeful that there will be more information about a short-term solution (through February 2021) soon.
There may be action required by the industry to support a longer-term solution. This will become clearer as things progress.
(Philadelphia Business Journal) Philadelphia amends some business tax rules after latest round of closures and restrictions. Philadelphia is temporarily changing some business tax rules in the face of another round of closures due to a surge in Covid-19 cases.
The changes are tailored around the Use & Occupancy Tax, as well as the Business Income & Receipts Tax and the refuse fee. The announcement comes after city officials ordered the shutdown of indoor dining and closure of businesses like gyms, museums, and casinos until January 1.
New guidance for the Use & Occupancy tax will allow restaurants to pay tax only on the portion of the space in use while indoor dining remains closed. Dining room space will be exempt from the U&O tax from November 20 to January 1. The U&O tax is 1.21% of the assessed value of a property, with a $2,000 annual tax exemption.
The city will also offer businesses a refund if they believe they overestimated their Business Income & Receipts Tax (BIRT) payment in 2020. Businesses will be able to amend their return and provide a more realistic estimated payment and have the difference refunded.
The current BIRT rate is 1.415% per $1,000 on gross receipts and 6.25% on taxable net income. Mayor Jim Kenney chose to freeze the tax rate for fiscal year 2021 rather than decreasing it when the city reported a $749 million budget gap.
Philadelphia will also extend its refuse (trash) fee due dates, moving the first payment deadline from December 31 to June 30. The full $500 fee is due June 30.
Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at Richard.Higgins@MCC-CPAs.com. I can be reached at Marty.McCarthy@MCC-CPAs.com. As always, we are happy to help.
Stay safe,
Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
