Tuesday, October 12, 2010

Pennsylvania Taxes

SPECIAL LOCAL TAXES—Philadelphia business privilege tax Q&A.

The Philadelphia Department of Revenue has issued answers to frequently asked questions regarding mandatory estimated payments of Philadelphia Business Privilege Tax (BPT). The Department provides answers to questions regarding how to claim credit for estimated BPT payments on the annual BPT return. Also, the BPT is based on actual business activity and not on the taxpayer's federal tax return. Taxpayers who anticipate lower tax liability for the next year that they are allowed to calculate their own estimate of BPT, but may be subject to penalties and interest if the amount due for the year is more than the total amount of the estimated payments. However, taxpayers who pay 100% of the previous year's tax liability in estimated tax payments will not be subject to interest and penalties if the total amount of taxes due exceeds the amount of the estimated payments based on 100% of the prior year's tax liability. Questions are also answered with regard to new businesses and businesses that terminate during the tax year, and specific line items on the BPT return. (Business Privilege Tax—Frequently Asked Questions, Philadelphia Dept. of Rev, 10/01/2010.)

PROPERTY—Tax sale—notice to unrecorded owners.

The trial court erred in finding that neighbors who claimed to have used the property for over 30 years had sufficient ownership interest to challenge the private sale of the property after it failed to sell at tax sale. The neighbors claimed that their use of the property for over 30 years entitled them to notice of sale, and that the Bureau had failed to post notice of the sale on the property as required under Pa. Stat. Ann. §5860.602(3). The Bureau conceded that it did not comply with statutory notice requirements, but asserted that even if notice was defective, the neighbors were not statutory owners of the property and therefore lacked standing to challenge the sale. Although the trial court found that the neighbors' claim of ownership “rang true,” Pa. Stat. Ann. §5960.102 defines an “owner” as the latest owner of record prior to the tax sale. The neighbors were not the owners of record prior to the tax sale, and therefore were not entitled to statutory notice and had no standing to challenge the sale. (Abramovitch v. Lackawanna Cty. Tax Claim Bureau, Pa. Commw. Ct., Dkt. No. 142 C.D. 2010, 10/04/2010 (unreported opinion).)

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