In our inaugural column, ‘‘This Is Why We Fight: A Survey of New York Tax Issues,’’ we set forth our mission to advocate for taxpayers by challenging state revenue department actions that contravene the tenets of good tax administration and pose risks to taxpayer rights. In this installment, we turn to the Commonwealth of Pennsylvania.

As in many states, Pennsylvania taxpayers struggle to comply in good faith with Pennsylvania’s rules on sourcing receipts from the sale of services. Like many of its sister states, Pennsylvania has played both sides of the fence, enforcing both cost-of-performance and market-based sourcing regimes in a manner that is seemingly designed to maximize revenue. In this article, we will explore Pennsylvania’s wavering position and encourage taxpayers to follow the state’s own dual interpretation of its tax code by taking whichever reporting position produces the most advantageous result.

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