Through their Tax Work Group, PA Chamber members have been working with state lawmakers on legislation to correct a December 2007 Pennsylvania Supreme Court ruling that determined that a local base of operations is not required for Pennsylvania's local governments to assess the Business Privilege Tax. The tax fix has now been formally introduced in the state Senate.

The decision was reversal of the court's previous position that a municipality cannot tax an entity that lacks a permanent base of operations within its borders. Prior rulings held that contractors that did not maintain a permanent office in the city were not subject to that city's Business Privilege Tax.

However, in V.L. Rendina Inc. v. City of Harrisburg, the state Supreme Court ruled that the location of the Lancaster-based Rendina's job-site trailer for a major, long-term construction project represented commercial activity that relied on the privilege to do business afforded by the municipality. This decision could allow local jurisdictions that impose a Business Privilege Tax to have greater ability to tax companies that are doing business in their area, but are not located there. The most recent decision has created considerable confusion regarding the assessment of the BPT.

The clarifying language, which would amend Pennsylvania's Local Tax Enabling Law, was introduced recently in the state Senate by Sen. Pat Browne, D-Lehigh/Monroe/Northampton, Republican chairman of the House Finance Committee.

Senate Bill 601 would reverse the Rendina decision and specifically spell out when a municipality could tax a company performing work within its borders.

The PA Chamber's priority is to ensure that business is not assessed twice.