Local Business Privilege Tax
Act 42, which was enacted May 6, 2014, and applies to
taxable years commencing on or after January 1, 2014, attempts to
clear up uncertainty regarding the business privilege tax that was
created by the Pennsylvania Supreme Court's 2007 decision in
V.L. Rendina v. City of Harrisburg, 938 A.2d 988 (Pa.
2007). The Local Tax Enabling Act (LTEA) provides local taxing
authorities with the right to impose the business privilege tax.
Act 42 amends the LTEA to clarify the "nexus" required to
allow a local taxing authority to impose its business privilege tax
on a business. Act 42 provides that a local taxing authority may
level a tax on the privilege of doing business in the jurisdiction
of the local taxing authority if the privilege is (1) exercised by
conducting transactions in the jurisdiction of the levying local
taxing authority for all or part of 15 or more calendar days within
the calendar year or (2) exercised through a "base
