HARRISBURG, Pa. – On Wednesday, the Senate passed legislation sponsored by Sen. Scott Hutchinson that is intended to help move Pennsylvania out of a pandemic economy and create jobs for Pennsylvanians.
According to a news release from Hutchinson’s office, the bill is part of a Small Business Tax Reform Package to help employers recover from the COVID-19 pandemic and mandated shutdowns.
Senate Bill 349, the release states, will bring Pennsylvania tax law governing expense deductions in line with federal law, eliminating the unequal treatment of small businesses in Pennsylvania.
The federal Tax Cuts and Jobs Act of 2017 raised the federal limit for IRS Section 179 expense deductions from $500,000 to $1 million annually. However, Pennsylvania law limits the deduction to $25,000 for personal income tax purposes, which covers S Corporations, partnerships and individuals, according to the release.
“The increase in the deduction found in Senate Bill 349 is not a tax credit, but simply allows a tax deduction earlier in the useful life of depreciable assets,” said Hutchinson, who chairs the Senate Finance Committee.
“This overdue change is an incentive to encourage businesses to buy equipment and to invest, which promotes job growth in Pennsylvania.”
The bill will be sent to the House of Representatives for consideration.
“Small businesses were battered first by COVID-19 and then by the Wolf administration’s mandated closures and heavy-handed response,” Hutchinson said.
“Passage of the Small Business Tax Reform Package would represent a step forward in rebuilding our economy. When we remove barriers for small business employers, we’re targeting efforts to where the overwhelming number of jobs are created for Pennsylvanians.”
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