Apr. 25, 2017
HARRISBURG – On Tuesday, the House Finance Committee approved the Small Business Tax Fairness Package, which includes three House bills being sponsored by Reps. Stephen Bloom (R-Cumberland), Seth Grove (R-York) and Eric Nelson (R-Westmoreland). Each of the bills passed with a 16-7 vote.
As 65 percent of Pennsylvania’s jobs are created by small businesses, the bill sponsors agree that the success of small businesses is key to improving the state’s economy. Further, by advocating this tax reform package, they are hoping to improve small business success by removing unnecessary impediments.
The package includes the following pieces of legislation, each of which would make changes to the Tax Reform Code:
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House Bill 331, sponsored by Bloom, would allow for the tax deferral of like-kind exchanges as currently permitted by federal tax law and all 49 other states.
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House Bill 332, sponsored by Grove, would allow small businesses to deduct losses recorded in one year against income recorded in subsequent years.
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House Bill 333, sponsored by Nelson, would allow businesses to take the full deduction permitted by the Internal Revenue Code for qualifying equipment purchases.
“The legislation I am sponsoring would remove an unfair disadvantage that Pennsylvania small businesses currently face when competing with businesses in other states,” Bloom explained. “Federal law allows for a ‘like-kind’ exchange, which allows for tax-deferral when property is exchanged for similar property. Every other state besides ours provides for a similar deferral on the state level. My bill would level the playing field for Pennsylvania’s hard-working small businesses.”
“This legislative package is what Pennsylvania needs to jump start our economy to spur job growth. House Bill 332 would equal the playing field for small businesses by allowing them to have the same ability to apply net operating losses over several years. As small businesses also take several years to gain a profit, it would allow them to stay in business when they do finally turn a profit,” Grove said.
“Small businesses are the backbone of Pennsylvania’s economy and should receive the same tax benefits as large corporations,” Nelson said. “My legislation would even the playing field by allowing small businesses to fully deduct equipment purchases to the Internal Revenue Service tax code limit. Currently, in Pennsylvania only large corporations can take deductions to the maximum. Small businesses tend to buy locally and regionally so increasing the limit will not only benefit the purchaser, but also the supplier.”
All three bills have been sent to the full House for further consideration. Identical legislation is being introduced in the Senate by Sens. Mike Folmer, John Eichelberger and Scott Hutchinson.
Representative Stephen Bloom, 199th District
Representative Seth Grove, 196th District
Representative Eric Nelson, 57th District
Pennsylvania House of Representatives
Media Contact: Krisinda Corbin – 717.705.2032