By Rita L. Eng
On October 29, 2024, Pennsylvania Governor Josh Shapiro signed legislation to provide corporate net income tax relief for medical marijuana dispensaries. In addition, the legislation extends the deadline for taxpayers to appeal personal income tax assessments and establishes a formal settlement conference process overseen by the Pennsylvania Board of Finance and Revenue. (L. 2024, S1051 (Act 123), effective as stated.)
Corporate net income tax deduction for medical cannabis business.
Effective for taxable years beginning after December 31, 2023, the definition of “taxable income” for corporate net income tax purposes has been amended to clarify that the tax deduction for qualified business expenses for medical cannabis businesses includes an entity that has a dispensary permit. Previously, the tax deduction only applied to an entity that has an active grower/processor permit.
Extension for filing petition for personal income tax reassessment.
Effective January 27, 2025, the deadline has been extended from 60 days to 90 days for a taxpayer to appeal a personal income tax assessment from the Pennsylvania Department of Revenue with the Board of Appeals or to appeal a decision from the Board of Appeals to the Board of Finance and Revenue. The extension is allowed for cause.
Creation of settlement conference process.
Effective January 27, 2025, a settlement conference process has been established to resolve tax disputes. A settlement conference can be requested by either party to settle a petition for review of a decision and order under the Board of Finance and Revenue’s jurisdiction. Within five days of receiving a response from each party, the Board of Finance and Revenue must notify each party in writing whether it will refer an appeal to a settlement conference. A settlement conference must be held within 60 days of the case referral. Upon evaluating the merits of a dispute, the settlement officer must communicate the recommendations for settlement with each party. If the parties do not agree with the recommendations, the settlement officer may continue to facilitate a settlement between the parties for an additional 30 days. If the parties do come to an agreement, the parties must present the terms of the settlement in writing to the Board of Finance and Revenue within 10 business days after reaching the settlement.
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