IN THE SUPREME COURT OF PENNSYLVANIA EASTERN DISTRICT. No. 6 EAP 2016 NEXTEL COMMUNICATIONS OF THE MID-ATLANTIC, INC.,

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1 Received 9/26/ :00:36 AM Supreme Court Eastern District IN THE SUPREME COURT OF PENNSYLVANIA EASTERN DISTRICT No. 6 EAP 2016 NEXTEL COMMUNICATIONS OF THE MID-ATLANTIC, INC., v. Appellee COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF REVENUE, Appellant Appeal from the Order of the Commonwealth Court Entered on December 30, 2015 at No. 98 F.R BRIEF OF AMICUS CURIAE MAJORITY CAUCUS OF THE PENNSYLVANIA HOUSE OF REPRESENTATIVES IN SUPPORT OF THE POSITION OF APPELLANT COMMONWEALTH OF PENNSYLVANIA Counsel for Amicus Curiae James G. Mann (Pa ) Rodney A. Corey (Pa ) Office of Chief Counsel, Republican Caucus Pennsylvania House of Representatives Suite B-6, Main Capitol Building Harrisburg, PA (717) September 26, 2016

2 TABLE OF CONTENTS Page TABLE OF AUTHORITIES... ii STATEMENT OF INTEREST OF AMICUS CURIAE... 1 STATEMENT OF THE QUESTION PRESENTED... 2 ARGUMENT... 2 I. THE EVOLUTION OF THE NET OPERATING LOSS CARRYFORWARD... 2 II. THE COMMONWEALTH S NET OPERATING LOSS CARRYFORWARD PROVISIONS DO NOT VIOLATE THE UNIFORMITY CLAUSE CONCLUSION i

3 TABLE OF AUTHORITIES CASES: Page Amidon v. Kane, 279 A.2d 53 (Pa. 1971)... 8, 9 Commonwealth v. Rohm & Haas Co., 368 A.2d 909 (Pa. Cmwlth. 1977)... 9, 10 Commonwealth v. Warner Brothers Theatres, 27 A.2d 62 (Pa. 1942)... 7, 8, 9, 10 Commonwealth v. Westinghouse Elec. Corp., 386 A.2d 491 (Pa. 1978)... 9, 10 Danyluk v. Bethlehem Steel Co., 178 A.2d 609 (Pa. 1962) Gaugler v. City of Allentown, 189 A.2d 264 (Pa. 1963) In re: Cope s Estate, 43 A. 79 (Pa. 1899)... 6 Lebanon Valley Farmers Bank v. Commonwealth, 83 A.3d 107 (Pa. 2013)... 5 Leonard v. Thornburgh, 489 A.2d 1349 (Pa. 1985)... 5 Nextel Commc ns of Mid-Atl., Inc. v. Com., 129 A.3d 1 (Pa. Cmwlth. 2015)... 6, 12 Tool Sales and Services Co., Inc. v. Commonwealth, 637 A.2d 607 (Pa. 1994)... 5, 6 Turco Paint & Varnish Co. v. Kalodner, 184 A. 37 (Pa. 1936)... 7 STATUTES: 53 P.S (d)(1) P.S Act 116 of 2006, H.B. 859, P.L (July 12, 2006)... 4 Act 195 of 1980, H.B. 1252, P.L (Dec. 8, 1980)... 2 Act 21 of 1995, H.B. 39, P.L. 139 (June 30, 1995)... 3 ii

4 Act 22 of 1991, H.B. 185, P.L. 97 (Aug. 4, 1991)... 2 Act 4 of 1999, S.B. 557, P.L. 26 (May 12, 1999)... 3 Act 45 of 1998, H.B. 1766, P.L. 239 (Apr. 23, 1998)... 3 Act 48 of 1994, H.B. 868, P.L. 279 (June 16, 1994)... 3 Act 48 of 2009, H.B. 1531, P.L. 451 (Oct. 9, 2009)... 4 Act 52 of 2013, H.B. 465, P.L. 270 (July 9, 2013)... 4 Act 89 of 2002, H.B. 1848, P.L. 559 (June 29, 2002)... 3 REGULATIONS: 61 Pa. Code CONSTITUTIONAL PROVISIONS: Pa. Const., art. VIII, Pa. Const., art. IX, OTHER AUTHORITIES: 27 Summ.Pa.Jur.2d Taxation 17: I.R.S. Form 1120 (2015) iii

5 STATEMENT OF INTEREST OF AMICUS CURIAE Amicus Curiae, the Majority Caucus of the Pennsylvania House of Representatives, files this brief in support of the position of Appellant Commonwealth of Pennsylvania. For twenty-two years, the net operating loss carryforward provisions contained in the Tax Reform Code have been a necessary and important component part of this Commonwealth s economic development strategy. As explained herein, the net operating loss carryforward was reestablished in 1994 with a dollar cap of $500,000 and has expanded over the course of the next two decades to its current form which permits a corporation to reduce its net income tax by 30% or $5 million, whichever is greater. Changes to these long-standing statutory provisions are more appropriately made via the constitutionally prescribed legislative process. Therefore, Amicus Curiae has a direct and substantial interest in the outcome of this appeal. 1

6 STATEMENT OF THE QUESTION PRESENTED Whether the cap imposed on the net loss deduction violates the Uniformity Clause of the Pennsylvania Constitution? Answered in the affirmative by the Commonwealth Court. Suggested answer: No. ARGUMENT 1 I. THE EVOLUTION OF THE NET OPERATING LOSS CARRYFORWARD. The first net operating loss carryforward (NLC) provision codified in Pennsylvania was the product of Act 195 of Under Act 195, the General Assembly provided for a graduated implementation of the NLC over a three year period. See Act 195 of 1980, H.B. 1252, P.L. 1117, 2 (Dec. 8, 1980). For tax years after 1983, losses could be carried forward for three years and there was no cap on the amount of deduction. After eleven years, though, the NLC was suspended due to budgetary constraints. See Act 22 of 1991, H.B. 185, P.L. 97, 16 (Aug. 4, 1991). Realizing the value of the net operating loss carryforward in attracting and maintaining businesses of all sizes in Pennsylvania, the General Assembly 1 For brevity, Amicus Curiae incorporates by reference the Commonwealth s Statement of Jurisdiction, Statement of Standard and Scope of Review, Order in Question, and Statement of the Case rather than setting forth those sections at length. 2

7 reinstated the NLC as part of Act 48 of Much like its predecessor, the Act 48 version of the NLC provided for a graduated implementation over a period of years until 1996 when losses could be carried forward for up to three years. However, the 1994 version of the carryforward was different in that the law contained a dollar cap on the deduction of not more than $500,000. See Act 48 of 1994, H.B. 868, P.L. 279, 10 (June 16, 1994). The General Assembly amended the law three more times in the 1990 s. In 1995, the cap for the deduction was increased to $1 million for tax year 1996 and thereafter. See Act 21 of 1995, H.B. 39, P.L. 139 (June 30, 1995). In 1998, the law was amended to allow businesses to carry forward up to ten years of losses for tax year 1995 and thereafter. See Act 45 of 1998, H.B. 1766, P.L. 239, 8 (Apr. 23, 1998), effective July 1, The dollar cap for deductions was increased to $2 million for tax year 1999 and thereafter. See Act 4 of 1999, S.B. 557, P.L. 26, 9 (May 12, 1999). The NLC was expanded again in 2002, allowing businesses to apply losses for twenty years against their current year s net income. See Act 89 of 2002, H.B. 1848, P.L. 559, 13 (June 29, 2002). The $2 million cap for deductions remained in place until From the time of its re-enactment in 1994, and for twelve years thereafter, the law contained a maximum amount that any business (large or small) was permitted to deduct from its current tax year s net income. 3

8 In 2006, the law was amended to provide that a corporation could apply its NLC to reduce its net income tax for a tax year by 12.5% or $3 million, whichever is greater. See Act 116 of 2006, H.B. 859, P.L. 1137, 2 (July 12, 2006). The law was amended twice more to increase both the percentage and dollar cap. In Act 48 of 2009, the dollar cap remained at $3 million, while the percentage of deduction was increased to 15% of taxable income for tax year 2009; and, 20% of taxable income for tax year 2010 and thereafter. See Act 48 of 2009, H.B. 1531, P.L. 451, 7 (Oct. 9, 2009). Four years later, the General Assembly revisited this language to modify both the percentage and the dollar cap. In tax year 2014, a corporation could utilize the NLC deduction to reduce its taxable income by the greater of $4 million or 25%; and, for tax year 2015 and thereafter, by the greater of $5 million or 30%. See Act 52 of 2013, H.B. 465, P.L. 270, 19 (July 9, 2013). For twenty-two years, the Commonwealth s NLC statute has contained a dollar cap of some stripe. At the point it was reestablished in 1994, the General Assembly consciously determined that no corporation could deduct an amount greater than $500,000 from its taxable income for a given tax year. As this provision evolved, the General Assembly expanded both the dollar cap and established a percentage cap. In point of fact, the percentage cap which has expanded from 12.5% to 30% over the course of a ten year period was established 4

9 specifically for the benefit of corporate taxpayers with taxable income in a given tax year which is greater than the dollar cap. II. THE COMMONWEALTH S NET OPERATING LOSS CARRYFORWARD PROVISIONS DO NOT VIOLATE THE UNIFORMITY CLAUSE. The Uniformity Clause of the Pennsylvania Constitution provides that, [a]ll taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws. Pa. Const., art. VIII, 1. A tax statute will not be declared unconstitutional unless it clearly, palpably and plainly violates the Constitution. Leonard v. Thornburgh, 489 A.2d 1349, 1351 (Pa. 1985) (emphasis in original). A taxpayer is faced with a heavy burden when challenging a tax statute as violative of Uniformity Clause. The taxpayer must demonstrate that the enactment results in some form of classification; and the classification is unreasonable in that the statute is not rationally related to a legitimate state purpose. Lebanon Valley Farmers Bank v. Commonwealth, 83 A.3d 107, 113 (Pa. 2013). Under this Court s analysis of the Uniformity Clause, absolute equality and perfect uniformity in taxation are not required. A classification, for tax purposes, is valid when it is based upon some legitimate distinction between the classes that provides a reasonable basis for different treatment. So long as the classification 5

10 imposed is based upon some standard capable of reasonable comprehension,... equal protection of the law has been afforded. Tool Sales and Services Co., Inc. v. Commonwealth, 637 A.2d 607, 614 (Pa. 1994). In the instant case, the lower court recognized that both the rate of tax paid by corporate taxpayers and the rate of the deduction contained in the NLC provisions of the Tax Reform Code are uniform. See Nextel Commc ns of Mid- Atl., Inc. v. Com., 129 A.3d 1 (Pa. Cmwlth. 2015). The Commonwealth Court, however, incorrectly focused on the effective rate which exists when comparing the uniform statutory rate and uniform statutory deduction. The lower court relied heavily on In re: Cope s Estate in making its determination. Id. at In re: Cope s Estate was a personal property tax dispute in which this Court found an inheritance tax statute unconstitutional because it exempted estates valued under $5,000 from taxation. In re: Cope s Estate, 43 A. 79 (Pa. 1899). This Court has long held that there is a fundamental difference in the uniformity analysis between corporate taxes and personal taxes. The difference stems from the ability to calculate the cost of producing income a calculation which can only be made in the corporate context. Thus, any reliance on personal tax caselaw in a corporate context is contrary to the divergence in uniformity analysis recognized by this Court for decades. 6

11 In Turco Paint & Varnish Co. v. Kalodner, this Court addressed whether the apportionment formula utilized in determining a corporation s taxable base violated the Uniformity Clause. Turco Paint & Varnish Co. v. Kalodner, 184 A. 37 (Pa. 1936). The plaintiff in Turco Paint was a Delaware corporation that did business in multiple states, including Pennsylvania. Id. at 40. The plaintiff argued that the formula to apportion income attributable to the Commonwealth for corporate net income tax purposes resulted in a graduated tax that levied different amounts of tax on the same amount of income. Id. Ultimately, this Court held that the method to determine the base tax, which was determined through a method of apportionment calculated upon... tangible assets, gross receipts, and pay roll, did not result in a graduated tax. Id. This court reasoned: Id. (emphasis added). It certainly should be axiomatic that the same impost, when applied to the same subject-matter, does not make the tax graded simply because of the fact that one association, owning more of the particular subject matter than another, pays, on this account, a greater sum total of tax. Where different rates are legislatively imposed on varying amounts or quantities of the same tax base, then you have a graded tax that lacks uniformity under our Constitution. Subsequently, in Commonwealth v. Warner Brothers Theatres, this Court heard a challenge to the Commonwealth s corporate net income tax statute in which a taxpayer argued that the use of the net income base as determined under the federal tax laws was an impermissible violation of the Uniformity Clause. 7

12 Commonwealth v. Warner Brothers Theatres, 27 A.2d 62 (Pa. 1942). The plaintiff in Warner Brothers Theatres argued that the law was not uniform because federal law allowed for various deductions and exemptions which were not available to every taxpayer in Pennsylvania. Ultimately, this Court held that the method for determining a taxable base was inconsequential to the uniformity analysis. This Court held that [n]et income as ascertained is the base upon which the tax is measured, not the tax itself. Id. at 63. In simplest terms, where the (state tax) base is the same and the rate unvarying, there is no lack of uniformity. Id. at More recently, in Amidon v. Kane, this Court rejected any analogy between corporate and personal taxes based upon the inherent differences in the nature of the entities. Amidon v. Kane, 279 A.2d 53 (Pa. 1971). At issue in Amidon was the Commonwealth s personal income tax statute which, at the time, provided for a flat tax on taxable income, but calculated an individual s taxable base by applying certain exemptions and deductions which were not available to all taxpayers. as follows: This Court explained the difference between corporate and personal taxation Corporations are artificial legal entities created with the permission of the state for the purpose of maximizing profits for shareholders and the corporate net income tax is imposed upon a tax base which is the net income attributable to this state. 8

13 Natural persons on the other hand cannot be likened to profit maximizing entities. Individuals spend their resources for an infinite variety of reasons unrelated to the making of a profit. Thus unlike the corporate context it would be seemingly difficult, if not impossible to create a personal income tax designed to take into account the cost of producing individual income. Id. at 63. In rejecting the plaintiff s analogy between corporate and personal taxes, the Court stated that [i]n passing upon the validity of the corporate net income tax, this Court [in Commonwealth v. Warner Brothers Theatres] emphasized that it was not considering an income tax but an excise tax for the privilege of doing business in the Commonwealth. Any attempted analogy between the instant tax and the corporate net income tax is unpersuasive. Id. at 63. Finally, in 1978, this Court addressed a case involving Pennsylvania s corporate net income tax and treatment of taxes paid to foreign governments. Commonwealth v. Westinghouse Elec. Corp., 386 A.2d 491 (Pa. 1978). The plaintiff in Westinghouse complained that other corporations were able to deduct foreign taxes from their Pennsylvania return. But, because Westinghouse treated the taxes paid to foreign governments as a credit against its Federal tax liability rather than as a deduction from its gross income, it correspondingly lost the deduction on its Pennsylvania return. Id. at 492. The lower court in Westinghouse noted that the plaintiff claimed the tax provisions were not uniform because they discriminated against taxpayers 9

14 electing to take foreign taxes as a credit against their federal returns in favor of those electing to take them as a deduction. Commonwealth v. Rohm & Haas Co., 368 A.2d 909, 912 (Pa. Cmwlth. 1977), aff d sub nom. Commonwealth v. Westinghouse Elec. Corp., 386 A.2d 491 (Pa. 1978). Where the same rate of taxation is applied to the same tax base, no constitutional infirmity is made out, and no unreasonable classification can be said to exist. Rohm & Haas Co., 368 A.2d at 913 (citations omitted). Upholding the lower court s denial of a refund and (again) quoting Warner Brothers Theatres, Inc, the Supreme Court explained as follows: [T]his Court has held that a state tax is not violative of the uniformity clause if the tax applies to all corporations with which the Commonwealth has power constitutionally to deal.... Where the (state tax) base is the same and the rate unvarying, there is no lack of uniformity. In the case at bar, it is obvious that the Act did not violate the uniformity clause because the Act s tax base, the corporation s taxable income... (as) ascertained by the Federal Government for Federal tax purposes, applied the same... unvarying rate to all corporations. Westinghouse Elec. Corp., 386 A.2d at 493 (citations omitted). Even though Westinghouse had made a voluntary choice to treat the foreign tax payments as a credit rather than take a deduction on its federal return, such choice does not discount the long-standing principles of law espoused. If the rate and base are the same in the context of corporate taxes, a difference in the effective rate is immaterial. 10

15 If the Commonwealth Court s decision in the instant case is allowed to stand and effective tax rates become the new measure of uniformity for corporate net income tax purposes, it would overturn three quarters of a century case law which authorized the use of the federal definition of net income for corporate tax purposes. Corporate taxpayers are provided with no less than fifteen deductions from their total income on the federal corporate income tax return. These deductions include, but are not limited to, the following: salaries for officers and employees; repairs and maintenance; bad debts; rents; taxes and licenses; interest paid; charitable contributions; depreciation and depletion; advertising; pension plans; and employee benefit programs. 61 Pa. Code ; See I.R.S. Form 1120 (2015). To the extent these deductions are authorized by federal statute, and not required to be added back on the Pennsylvania corporate income tax return, one corporation s taxable income may be substantially higher or lower than a neighboring corporation s taxable income. Without question, the use of net income in this context necessarily produces varying effective tax rates. The fact that the state, and not the federal government, is providing for a mechanism for a corporation to benefit from an additional deduction should be of no moment for purposes of the Court s analysis. 11

16 In the instant case, the Commonwealth Court went beyond consideration of either the uniform statutory tax rate or the uniform statutory NLC deduction 2 and analyzed the effect of the NLC deduction in particular instances. See Nextel Commc ns of Mid-Atl., Inc., 129 A.3d at 8 9 (discussion of statutory rate versus resulting divergent tax burdens ). This has the potential to open Pandora s Box. The Local Tax Enabling Act authorizes political subdivisions to impose various taxes. In some cases, it imposes a limit on those taxes which is expressed as a fixed dollar amount. Two of those instances include: (1) Per capita, poll or other similar head taxes, ten dollars ($10). * * * (8) Local services taxes, fifty-two dollars ($52) P.S These tax provisions result in differing effective rates as applied to individuals in different economic situations. To put this in context, a clerk/typist 2 For the 2007 Tax Year, the amount of the NLC deduction was limited to the greater of 12.5% of the taxpayer's taxable income or $3 million. Nextel Commc ns of Mid-Atl., Inc., 129 A.3d at 3 (citation omitted). 3 A municipality which has adopted an Act 47 plan may petition the court for an increase of the local services tax. 53 P.S (d)(1). While this potential for an increased local services tax is not specifically considered as part of this analysis, the disparate effective rates for individuals of differing economic means would be even more pronounced. 12

17 for a state agency whose annual salary is $28,000 and pays the maximum per capita tax ($10) and local services tax ($52) would pay an effective rate of.036% and.186% of his annual salary, respectively. A deputy secretary for a state agency whose annual salary is $120,000 and pays the maximum per capital and local services taxes would pay an effective rate of.008% and.043% of his annual salary, respectively. Despite the vast differences in effective rates, these local taxes have generally been upheld as within the bounds of the uniformity clause. The fixed dollar amount applied to the local services tax ($52) is valid as an occupational privilege tax. 27 Summ.Pa.Jur.2d Taxation 17:21, citing Gaugler v. City of Allentown, 189 A.2d 264 (Pa. 1963). 4 The fixed dollar amount applied to the per capita or head tax has also been considered reasonable as applied to residents. Danyluk v. Bethlehem Steel Co., 178 A.2d 609, 610 (Pa. 1962). If the Commonwealth Court s consideration of the divergent tax burdens resulting from fixed dollar amounts stands, it may raise questions about the ongoing ability of local governments to raise revenue at fixed rates. 4 Further, it was indicated in Banger's Appeal, supra, that a flat rate levy on all occupations was valid and that if such appeared to be unjust that this question was one for the legislature and not the courts. The uniformity of the tax removes the stigma of unconstitutionality under Art. IX, 1, of the Pennsylvania Constitution, P.S. Gaugler, 189 A.2d at

18 CONCLUSION The Commonwealth Court s focus on an effective tax rate and utilizing the same analysis for issues of personal and corporate taxation run afoul of decades of jurisprudence from this Court. The NLC provisions in the Tax Reform Code do not clearly, palpably and plainly violate the Uniformity Clause in the Constitution. Therefore, this Court should reverse the judgment of the Commonwealth Court. Respectfully submitted, Counsel for Amicus Curiae /s/ James G. Mann James G. Mann (Pa ) /s/ Rodney A. Corey Rodney A. Corey (Pa ) Office of Chief Counsel, Republican Caucus Pennsylvania House of Representatives Suite B-6, Main Capitol Building Harrisburg, PA (717)

19 Received 9/26/ :00:36 AM Supreme Court Eastern District IN THE SUPREME COURT OF PENNSYLVANIA Nextel Communications of the Mid-Atlantic, Inc., Appellee v. Commonwealth of Pennsylvania, Appellant : : : 6 EAP 2016 PROOF OF SERVICE I hereby certify that this 26th day of September, 2016, I have served the attached document(s) to the persons on the date(s) and in the manner(s) stated below, which service satisfies the requirements of Pa.R.A.P. 121: Service Bruce Lee Castor Jr. eservice TINA@ROGERSCASTOR.COM 26 EAST ATHENS AVENUE ARDMORE, PA Phone: Appellant Commonwealth of Pennsylvania Bruce Lee Castor Jr. First Class Mail 16th Floor, Strawberry Square Harrisburg, PA Phone: Appellant Commonwealth of Pennsylvania Carol L. Weitzel eservice cweitzel@attorneygeneral.gov 15th Floor Strawberry Square Harrisburg, PA Phone: Appellant Commonwealth of Pennsylvania PACFile 1001 Page 1 of 7 Print Date: 9/26/ :00 am

20 IN THE SUPREME COURT OF PENNSYLVANIA PROOF OF SERVICE (Continued) Carol L. Weitzel First Class Mail 15th Fl Strawberry Square Harrisburg, PA Phone: Appellant Commonwealth of Pennsylvania John Bartley Delone eservice Office of Attorney General, Appellate Section 15th Floor, Strawberry Square Harrisburg, PA Phone: Appellant Commonwealth of Pennsylvania John Bartley Delone First Class Mail PA Ofc of Attorney General Strawberry Sq Fl 15 Harrisburg, PA Phone: Appellant Commonwealth of Pennsylvania Kyle Oliver Sollie eservice Three Logan Square 1717 Arch Street, Suite 3100 Philadelphia, PA Phone: Appellee Nextel Communications of the Mid-Atlantic, Inc. PACFile 1001 Page 2 of 7 Print Date: 9/26/ :00 am

21 IN THE SUPREME COURT OF PENNSYLVANIA PROOF OF SERVICE (Continued) Kyle Oliver Sollie First Class Mail 2500 One Liberty Place 1650 Market St Philadelphia, PA Phone: Appellee Nextel Communications of the Mid-Atlantic, Inc. Neil Patrick McConnell eservice PA Office of Attorney General, Tax Lititgation Unit Strawberry Square, 15th Floor Harrisburg, PA Phone: (71-7) Appellant Commonwealth of Pennsylvania Neil Patrick McConnell First Class Mail Tax Litigation Section 15th Floor, Strawberry Square Harrisburg, PA Phone: Appellant Commonwealth of Pennsylvania Paul Evan Melniczak eservice Three Logan Square, Suite Arch St. Philadelphia, PA Phone: Appellee Nextel Communications of the Mid-Atlantic, Inc. PACFile 1001 Page 3 of 7 Print Date: 9/26/ :00 am

22 IN THE SUPREME COURT OF PENNSYLVANIA PROOF OF SERVICE (Continued) Paul Evan Melniczak First Class Mail 2500 One Liberty Place 1650 Market Street Philadelphiaq, PA Phone: Appellee Nextel Communications of the Mid-Atlantic, Inc. PACFile 1001 Page 4 of 7 Print Date: 9/26/ :00 am

23 IN THE SUPREME COURT OF PENNSYLVANIA PROOF OF SERVICE (Continued) Courtesy Copy David J. Shipley eservice McCarter & English, LLP 100 Mulberry Street Newark, NJ Phone: Amicus Curiae Council on State Taxation David J. Shipley First Class Mail 1600 Market Street Suite 3900 Philadelphia, PA Phone: Amicus Curiae Council on State Taxation Kathy Lee Pape First Class Mail 116 Pine Street Suite 201 Harrisburg, PA Phone: Appellee Amicus Curiae Greater Philadelphia Chamber of Commerce Appellee Amicus Curiae Greater Pittsburgh Chamber of Commerce Appellee Amicus Curiae Pennsylvania Business Council Randy Lee Varner eservice McNees Wallace & Nurick LLC 100 Pine Street, P.O. Box 1166 Harrisburg, PA Phone: Appellee Amicus Curiae Institute for Professionals in Taxation PACFile 1001 Page 5 of 7 Print Date: 9/26/ :00 am

24 IN THE SUPREME COURT OF PENNSYLVANIA PROOF OF SERVICE (Continued) Randy Lee Varner First Class Mail McNees Wallace & Nurick LLC 100 Pine St PO Box 1166 Harrisburg, PA Phone: Appellee Amicus Curiae Institute for Professionals in Taxation Tamara Lynn Fox eservice Pond View Court Harrisburg, PA Phone: Appellee Amicus Curiae Pennsylvania Chamber of Business and Industry Tamara Lynn Fox First Class Mail 17 North Second Street 16th Floor Harrisburg, PA Phone: -- Appellee Amicus Curiae Pennsylvania Chamber of Business and Industry Thomas Allan Bowen eservice Stevens & Lee, 17 North 2nd Street 16th Floor Harrisburg, PA Phone: Appellee Amicus Curiae Pennsylvania Chamber of Business and Industry Amicus Curiae Thomas Allan Bowen PACFile 1001 Page 6 of 7 Print Date: 9/26/ :00 am

25 IN THE SUPREME COURT OF PENNSYLVANIA PROOF OF SERVICE (Continued) Thomas Allan Bowen First Class Mail Stevens & Lee PC 17 N 2ND St 16th Fl Harrisburg, PA Phone: Appellee Amicus Curiae Pennsylvania Chamber of Business and Industry Amicus Curiae Thomas Allan Bowen /s/ James Guthrie Mann (Signature of Person Serving) Person Serving: Mann, James Guthrie Attorney Registration No: Law Firm: Pennsylvania House of Representatives Ste B 6 Main Capitol PO Box Harrisburg, PA Appellant Amicus Curiae Majority Caucus of the Pennsylvania House of Representatives PACFile 1001 Page 7 of 7 Print Date: 9/26/ :00 am