On June 11, 2018, the US Supreme Court (Court) denied certiorari in Nextel Communications v. PA Dept. of Revenue.¹ In its certiorari petition, Nextel asked the Court to find that the Pennsylvania Supreme Court's holding - that a statutory cap on the net loss carryover (NLC) deduction under state law, as applied to Nextel, violated the Uniformity Clause of the Pennsylvania Constitution but denying Nextel a refund of the unconstitutionally paid tax- violated the Due Process Clause of the United States Constitution.

Implications

The denial of Nextel's certiorari petition by the Court means the state high court's decision stands as the final decision in that case. That said, the fact that other cases (e.g., RB Alden)² challenging the validity of the NLC cap remain unresolved dictate that this issue has not yet been finally resolved.

Further, the Pennsylvania Department of Revenue previously issued guidance clarifying how it would implement the state high court's decision. The following summarizes the DOR's published guidance on the utilization of NLCs:

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ENDNOTES

¹ Nextel Communications of the Mid-Atlantic, Inc. v. Commonwealth, No. 6 EAP 2016 (Pa. S. Ct. Oct. 18, 2017), petition for cert. denied, Dkt. No. 17-1506 (U.S. S. Ct. June 11, 2018).

² RB Alden Corp. v. Commonwealth, 73 F.R. 2011 (Pa. Cmwlth. Ct. Sept. 12, 2017), petition for review, 60 MAP 2017 (Pa. S. Ct.).