Pennsylvania BFR Finds DOR Erred by Adding Back Out-of-State Margin Tax to Taxable Income

The Pennsylvania Board of Finance and Revenue (BFR) issued a decision granting a company’s petition for review regarding its 2022 corporate net income tax. The company had disputed the Department of Revenue’s (DOR’s) addition of Texas margin tax to its taxable income. The BFR agreed with the company that the Texas margin tax is not a tax on net income under Pennsylvania law and therefore should not have been added back to taxable income for state tax purposes, reasoning that state law only requires add-back of taxes measured by net income. [Pa. Bd. of Fin. & Revenue, Docket No. 2402609, ...