Pa. Can't Tax Out-Of-State Trusts, Appeals Court Rules

Law360, Philadelphia (May 24, 2013, 2:13 PM EDT) -- The Pennsylvania Commonwealth Court ruled Friday that the state’s efforts to impose income taxes on two trust funds that were based in Delaware and lacked Pennsylvania income violated the commerce clause of the U.S. Constitution.

In an en banc decision, the court reversed a decision of the state’s Board of Finance and Revenue, concluding that the efforts to tax the trusts fell short of a four-prong test necessary to withstand constitutional scrutiny.

The board had ruled that because the trusts in question had been established by...
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