Pa. Senators seek to spur economic growth, attract new employers

A package of bills designed to promote economic growth and attract new employees has been introduced by Pennsylvania senators. 

Sens. Ryan Aument (R-Lancaster), Tracy Pennycuick (R-Berks/Montgomery), Greg Rothman (Cumberland/Dauphin/Perry), and Judy Ward (Blair/Fulton/Huntingdon) have unveiled a trio of pro-growth tax reform bills. 

The bills look to accomplishing the following: 

• Accelerate the Corporate Net Income (CNI) tax reduction so it is in line with a 2022 bill sponsored by Aument. 
• Increase the Net Operating Loss (NOL) carryover limitation. 
• Allow small businesses to use the NOL deduction. 

Senate Bill 345, sponsored by Aument and Rothman, speeds up the reduction of the state’s CNI tax by immediately dropping it to 7.99% and reducing it an additional point every January until it lands at 4.99%. As part of the state’s 2022-23 budget, Pennsylvania’s CNI tax rate began the transition to 4.99% from 9.99% over nine years. 

The senators said in a joint statement that a more competitive business tax code offers greater benefits than just improving the business climate. 

“Studies have shown that decreasing the CNI leads to better job opportunities, higher workers’ wages, and improved communities,” the senators said, “all of which create family-sustaining jobs and attract and retain new talent.” 

The second bill, Senate Bill 346, is aimed at bringing to Pennsylvania family-sustaining jobs and grow existing businesses, increasing the NOL carryover limit gradually from 40% to 80% over four years. Sponsored by Rothman, Aument, and Pennycuick, the bill seeks to bring the NOL carryover limit in line with the limitations of 48 states and the federal limitation. 

“The current restriction hurts Pennsylvania job creators and turns away businesses that might otherwise choose to locate in our state,” the senators said. “For Pennsylvania to compete nationally and attract new businesses, we must address this anti-growth policy.” 

Sponsored by Ward, Senate Bill 347 will aid the state’s small businesses by allowing them to use the NOL deduction. Giving small businesses more control over their financial positions, this accounting tool is already available to large corporations, thus leading to a disparity between small and large businesses. 

“Small businesses are the backbone of our economy, and we need to give them the same tools and advantages that we give larger corporations,” said the senators. “Allowing these mom-and-pop shops to use a net operating loss provision will help them to grow and succeed.” 

The bills will be referred for consideration to the Senate Finance Committee.