Pennsylvania Supreme Court Reverses Precedent Regarding Retroactive Application of Statutory Cap on Corporate Deductions

The Pennsylvania Supreme Court Nov. 20 held that its prior decision, Nextel Communications of Mid-Atlantic, Inc. v. Pennsylvania Department of Revenue, which struck down a statutory cap on corporate net loss carryover deductions, is unconstitutional because it should only apply prospectively, not retroactively. In General Motors Corp. v. Commonwealth, the Court had previously held that its ruling in Nextel applied retroactively to taxes that were collected before that decision. The Court has now overruled General Motors, finding that Nextel established a new principle of law and that principles of equity weigh against requiring refunds for years preceding the Nextel decision. ...