Tax Update (Vol. 2022, Issue 3)

As we head into 2023, Troutman Pepper’s Tax Team would like to wish you a joyous holiday season and a happy new year.

National Attention Falls on Philadelphia Wage Tax Dispute; Federal Constitutional Restraints Implicated

By: Randy Varner

Over seven years after the United States Supreme Court issued its opinion in Comptroller of Maryland v. Wynne, 575 U.S. 542 (2015), the Pennsylvania Supreme Court is dealing with a very similar case involving the federal constitutional restrictions on state and local taxation. In Diane Zilka v. Tax Review Board City of Philadelphia, 20 and 21 EAP 2022, a case which is garnering national attention, the issue once again involves how out-of-state credits are treated in the face of restrictions required by the Commerce Clause of the United States Constitution. Despite the plain language of Wynne that requires state and local taxes to be viewed as a collective burden for purposes of constitutional analysis, the courts below in Zilka did not apply that standard. Due to the national importance of the issue involved, the American College of Tax Counsel filed an amicus curiae brief, authored by the Troutman Pepper tax team, in support of the taxpayer.

Read More

The Clean Vehicle Tax Credit Under Section 30D

By: Brittany Johnson* and Anne Loomis

*Not licensed to practice law in any jurisdiction.

The Inflation Reduction Act of 2022 (IRA) created several new incentives for clean vehicles. Under prior law, taxpayers could claim a credit for purchasing and placing in service “new qualified plug-in electric drive motor vehicles” The IRA revised Section 30D into a new “clean vehicle credit,” wherein taxpayers, both individuals and businesses, may claim a credit worth up to $7,500 for vehicles placed in service between 2023 and 2032. For clean vehicles used in a trade or business, the credit is part of the general business credit under Section 38.

Read More