On September 30, 2019, the Pennsylvania Department of Revenue issued Corporation Tax Bulletin 2019-04. At the outset, the Bulletin notes that the U.S. Supreme Court’s decision in Wayfair confirmed that, at least prospectively, no physical presence standard limits the ability of a state to impose a net income tax on an out of state taxpayer as long as the constitutional requirements under the Due Process and Commerce Clauses of the United States Constitution are satisfied. As such, out of state corporations will be considered to be doing business in Pennsylvania to the extent they are taking advantage of the economic marketplace of the Commonwealth and regardless of whether they are physically present in Pennsylvania. Per the Bulletin, the Department will require corporations to begin filing returns if they meet an economic nexus standard for tax years beginning on or after January 1, 2020. Under the new standard, there is a rebuttable presumption that a corporate taxpayer without a physical presence in Pennsylvania, but that has $500,000 or more of direct or indirect gross receipts sourced to Pennsylvania from any combination of (1) gross receipts from the sale, rental, lease, or licensing of tangible personal property; (2) gross receipts from the sale of services; and (3) gross receipts from the sale or licensing of intangibles, including franchise agreements, will have a filing responsibility. The existing statutory allocation and apportionment rules will be used to determine whether the threshold is met. The Bulletin reminds taxpayers that Public Law 86-272 protection continues to apply, and protected taxpayers should continue to file a return claiming Public Law 86-272 protection. Please contact Howard Sklaroff at 267- 256-2891 with questions.