“Pa. Tax Talk: Takeaways From 2 Commonwealth Court Rulings"

Article by Jennifer Karpchuk on “Pa. Tax Talk: Takeaways From 2 Commonwealth Court Rulings"

In an article published on May 27, 2021 in Law360, Philadelphia-based Shareholder Jennifer Karpchuk discusses how taxpayers and practitioners should be aware of the recently issued decisions in two state and local tax decisions, one a taxpayer win and the other a taxpayer loss, and their potential impact.

“In Good Shepherd Rehabilitation Network Inc. v. City of Allentown, the Commonwealth Court upheld a trial court decision denying a city's attempt to impose its business privilege tax upon a nonprofit related to alleged profit-generating activities in the city,” explains Karpchuk. “In Mandler v. Commonwealth, the Commonwealth Court overruled taxpayers' exceptions to its affirmance of the Board of Finance and Revenue's order denying a petition for a refund of employer withholding taxes paid during bankruptcy.”

Karpchuk further explains that both Good Shepherd and Mandler offer important takeaways for practitioners and taxpayers alike. “Good Shepherd highlights that both taxpayers and taxing authorities need to be cognizant of the facts — and issues — that each party concedes at each level of litigation. Attempts to backpedal are likely to be met with denials by the courts,” said Karpchuk. “Mandler serves as an important reminder to owners and responsible parties that it is crucial in a bankruptcy proceeding to know and understand any outstanding tax liabilities because bankruptcy will not absolve all debts.”

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