The net loss carryover deduction provision in the Tax Reform Code, which allows a taxpayer to reduce its taxable income by deducting net losses from the prior year, is unconstitutional, the Commonwealth Court has ruled.
Because the provision allows disparate treatment to differently situated taxpayers, an en banc court held 5-2, it violates the uniformity clause of the Pennsylvania Constitution. The Nov. 23 ruling reversed a determination of the Board of Finance and Revenue and refunded nearly $4 million in corporate net income tax paid by Nextel Communications of the Mid-Atlantic Inc.
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