Cozen O’Connor: Flat Dollar Minimum on Pennsylvania Net Loss Carryover Deduction Held Unconstitutional [Bloomberg BNA]

Flat Dollar Minimum on Pennsylvania Net Loss Carryover Deduction Held Unconstitutional [Bloomberg BNA]

Joseph Bright and Heidi Schwartz, members of Cozen O’Connor’s Tax Practice Group, discuss the Nextel Communications of the Mid-Atlantic, Inc. v. Commonwealth case in Bloomberg BNA, in which the Pennsylvania Supreme Court upheld the Commonwealth Court’s holding that the net loss carryover (NLC) limitation applied to Nextel was unconstitutional. Nextel argued that the statute was unconstitutional because it included Nextel in a class of taxpayers having more than $3 million in taxable income and taxed them at a higher effective rate than other taxpayers who could completely eliminate their taxable income using the $3 million minimum deduction. The Supreme Court upheld that the NLC limitation was unconstitutional and severed the flat dollar minimum from the NLC statute. The outcome of this case could affect almost all corporate taxpayers in Pennsylvania.

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Joseph C. Bright

Member

jbright@cozen.com

(215) 665-2053

Heidi R. Schwartz

Associate

hschwartz@cozen.com

(215) 665-2799


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