Changing the Blame Game

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Changing the Blame Game TAX REFORM IRS eshes out rules for new deduction. PAGE 2 AUGUST 31, 2018 • Vol. 34 • No. 33 • $2 www.CPBJ.com TRANSPORTATION HIGHER EDUCATION Harrisburg U CHANGING THE esports team preps for fi rst BLAME GAME season By Shelby White repairs or injuries incurred in an accident. It is also a moral issue, [email protected] Enders said. By Jason Scott [email protected] “We should hold those that cause injury accountable for their tate o cials hope autonomous vehicles will be an actions,” Enders said. antidote to distracted and reckless driving on com- But if liability is uncertain or disputed, it can lead to costly Sixteen people from nine states and monwealth highways, where thousands of people and drawn-out litigation. Canada received scholarships to pioneer are hurt or killed in accidents each year. Numerous entities in the public and private sectors are the esports varsity teams at Harrisburg But even with cutting-edge technology in con- working to answer the liability questions for autonomous University of Science and Technology, trol, accidents will happen. vehicles. Some insurers already cover semi-autonomous the university’s rst varsity sports pro- S e blame game, however, will be more complicated. vehicles that rely on technologies like automatic braking. gram. Is the human driver at fault? e car’s manufacturer? What And state lawmakers and regulators are beginning to wrestle e season o cially kicks o next about the software programmer who created the code that al- with the issues. month. lowed the car to drive itself? Or the engineer whose highway At a forum held Aug. 14 at the headquarters of Phoenix As competitive gaming becomes more design was awed? Contact USA in Lower Swatara Township, state o cials popular, especially among college and “It is so unsettled and uncertain,” said Andrew Enders, discussed the impact autonomous vehicles could have on university students, the esports team vice president and general counsel at Enders Insurance As- Pennsylvania. represents a new way for HU to reach and sociates, a brokerage agency in Lower Paxton And part of the impact, they hope, is a signi - recruit prospective students. Township. cant decline in motor-vehicle deaths. e esports market is a budding Knowing who is at fault is es- billion-dollar industry with millions of sential in order for some- please see competitive players and money pouring one to foot the bill for AUTONOMOUS page 5 into professional esports leagues featur- ing franchise teams and sponsorship deals. e Storm players at Harrisburg Uni- versity arrived on campus July 31 to begin practice. ey recognize the industry’s potential and their role in taking it to new heights at the collegiate level. eir rst big test will be a major tournament as part of the Harrisburg University Esports, or HUE, Festival at Whitaker Center for Science and the Arts. “For us, the pressure is on,” said Titus Bang, a 21-year-old interactive media major from Florida who plays on the university’s team for League of Legends, a multiplayer battle-arena video game. e HUE Festival will be the biggest collegiate esports tournament to date, with $50,000 in prize money available to the 32 teams competing in League of Legends and Overwatch, a team-based please see ESPORTS page 10 717-545-9607 www.kltyndaleinc.com Authorized ELECTRICAL CONTRACTORS Kohler Dealer 7604 Allentown Blvd., Harrisburg, PA 17112 2 www.CPBJ.com • Central Penn Business Journal • 717-236-4300 AUGUST 31, 2018 TAX REFORM Feds work to clarify partnership deductions By Jen Vogelsong many rms and prevent their owners from many service businesses wondered wheth- Contributing writer Who is eligible? qualifying for the deduction. er they should split apart their activities into “ at was kind of scaring a lot of people,” separate entities, one that would be eligible The 20-percent deduction for qualifi ed e Internal Revenue Service proposed Eby said. for the deduction and one that would not. business income is available to owners of regulations earlier this month that provide e IRS de ned the eld as anything e proposed rules, however, guard sole proprietorships, partnerships, trusts some clari cation on a new tax deduction involving income from endorsement fees, against that. ey specify that the new en- and S corporations, according to the available to some business owners. licensing of an individual’s image, name or tity would not qualify for the deduction if Internal Revenue Service. trademark, or receiving fees for appearing more than 80 percent of its work is done for e deduction was established by the It is generally available to business federal tax-reform law passed in late 2017. owners with income of less than $315,000 on radio or television – essentially limiting a related party — de ned as one with more It allows owners of so-called pass-through if fi ling ointly and $157,500 if fi ling indi- it to celebrities. than 50 percent common ownership. If it is entities – like sole proprietorships, partner- vidually. The deduction begins to phase “ ey could have gone extremely aggres- less than 80 percent, a portion of the income ships, trusts and S corporations – to deduct out between $315,000 and $15,000 for sive, but I would argue that this is about as could be deducted. up to 20 percent of quali ed business in- oint fi lers, and between $157,500 and narrow as you can get while still honoring “ at prevents businesses from push- come on their personal tax returns. Pro ts $207,500 for individual fi lers. the law,” said Eric Wenger, partner in the ing a lot of their revenue to operations that from pass-through entities are taxed on the Above those levels, other factors kick tax services group of RKL LLP in Manheim could qualify and stripping out earnings personal tax returns of their owners, rather in to aff ect the deduction, including the Township, Lancaster County. from their service entity,” Eby said. than at the corporate level. type of business and the wages it pays. e proposed rules also cover businesses e proposed regulations likely won’t e deduction is subject to limits based whose income is from sources that are eli- become nal until the fall, following a public on personal income, as well as the kind of One of the most welcome clari cations gible for the deduction as well as from some comment period. business someone owns. People who own involved de ning which kinds of businesses that are not. A business that sells products, Jennifer Nelson, director of tax servic- service businesses, such as law rms and are eligible and which are not, accountants for example, may also o er some services. es for Stambaugh Ness in Springettsbury physician o ces, are generally not eligible said. For service businesses, for example, Business owners generally would have to Township, said the timing will leave many for the deduction if their income exceeds some of the de nitions were relatively exclude the service-related income when business owners and their tax advisors certain limits (see sidebar). vague. calculating their deductions. But if the busi- scrambling to decide what they should do Michael Eby, a senior tax manager with “ is clari ed a lot of things,” Eby said. ” ness has under $25 million in revenue and before the end of December. accounting rm McKonly & Asbury in e proposed rules o er clearer guide- the service-related income is less than 10 “ ere is a lot of talk about how to apply Hampden Township, Cumberland County, lines for what some saw as a catch-all: any percent of the total, they don’t have to ex- these and everyone is thinking di erently,” said the rules proposed in early August o er business whose income depends on the clude it, Eby said. e threshold is 5 percent she said. “It’s starting to get late in the year “more meat” to guide business owners who skill or reputation of one or more of its em- for businesses with evenue over $25 million. for planning purposes, so we need to get may be eligible for the deduction. ployees – a de nition that could ensnare When the deduction was rst created, moving on this.” < We Know REAL ESTATE Our dedicated real estate attorneys provide comprehensive legal services to assist clients in every stage of the real estate transaction. 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