Pennsylvania Adopts Special Apportionment Factors for Air Freight Forwarding Companies

Pennsylvania adopted legislation providing for special apportionment factors for air freight forwarding companies. The changes apply to tax years beginning in 2017.

What is an Air Freight Forwarding Company?

A “qualified air freight forwarding company:”

– engages in the air freight forwarding business;

– uses an airline with which it has common ownership and control; and

– uses the revenue miles of the airline for apportionment.

What is the Apportionment Formula for Air Freight Forwarding Companies?

Companies will apportion business income to Pennsylvania by multiplying the income by a fraction:

– the numerator is the taxpayer’s total revenue miles in Pennsylvania during the tax year; and

– the denominator is the taxpayer’s total revenue miles everywhere.

Act No. 131 (S.B. 627), Laws 2018, effective October 24, 2018

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