On October 18, the Pennsylvania Supreme Court decided Nextel Communications of the Mid-Atlantic, Inc. v. Commonwealth, 6 EAP 2016, holding that the state's net loss limitation violates the state constitution. The Court declined, however, to award a refund to Nextel because -- although the court severed the flat-dollar limitation -- the court left intact the limitation based on a percentage of Nextel's income. Nextel filed an application for re-argument.

Speakers: Kyle O. Sollie Paul E. Melniczak

Event Type: Seminar

Location Name:
Start Date/Time:
8 November 2017, 2:00 PM ET
End Date/Time:
8 November 2017, 2:30 PM ET

Meanwhile, taxpayers need to watch another appeal--RB Alden v. Commonwealth, 60 MAP 2017. RB Alden was filed with the state supreme court recently. RB Alden's facts are similar to Nextel's except that RB Alden involved the 2006 year, when Pennsylvania did not have a percentage-based limitation. Applying Nextel to RB Alden means the court should strike the flat-dollar limitation, leaving no limitation at all. If that happens, that's good news for taxpayers with refunds pending for years before 2007. We think, however, that because of the legislative history associated with Act 116 of 2006 (which gave us the percentage-based limitation starting in 2007), RB Alden should give the court reason to reconsider its refusal to allow refunds after 2006.

We are hosting a webinar on November 8 to discuss the implications of Nextel and RB Alden for your company. We will cover:

  • Whether you can expect a refund for tax years before 2007
  • Why RB Alden may affect your pending appeals for years after 2006
  • Whether you have any risk in any year if you relied on the flat-dollar limitation
  • Whether the administrative boards will start deciding appeals that have been held pending Nextel, and how you should respond
  • Your reporting options for your 2016 return (if you haven't filed it  yet)
  • Whether Nextel may actually increase some taxpayers' deferred tax assets