PRINTER'S NO. 1398
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1009
Session of
2017
INTRODUCED BY CORMAN, SCARNATI, EICHELBERGER, DiSANTO, FOLMER,
RAFFERTY, LAUGHLIN, RESCHENTHALER, MENSCH, VOGEL, BREWSTER,
REGAN, VULAKOVICH, BARTOLOTTA, WARD AND STEFANO,
DECEMBER 28, 2017
REFERRED TO FINANCE, DECEMBER 28, 2017
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in personal income tax, providing for
carryforward of losses by individual taxpayers and further
providing for limitation of pass-thru of losses to
shareholders.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding a section to
read:
Section 304.3. Carryforward of Losses by Individual
Taxpayers.--(a) For a tax year beginning after December 31,
2017, except as set forth in subsection (b), all of the
following apply:
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(1) An individual taxpayer required to file a return under
this article shall be entitled to carry forward loss within a
class of income enumerated under section 303.
(2) A taxpayer may not offset a gain within one class of
income with a loss carried forward from a prior year in another
class of income.
(3) There shall be a carryforward period which may not
exceed three tax years.
(b) This section shall not apply to losses relating to
income under section 303(a)(7).
(c) Notwithstanding 1 Pa.C.S. ยง 1937(a) (relating to
references to statutes and regulations), this section shall not
affect a change in any of the following provisions as they exist
on June 30, 2017:
(1) The definitions of "earned income" and "net profits" in
section 501 of the act of December 31, 1965 (P.L.1257, No.511),
known as "The Local Tax Enabling Act."
(2) The definition of "personal income" in section 302 of
the act of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known
as the "Taxpayer Relief Act."
Section 2. Section 307.10 of the act is amended to read:
Section 307.10. Limitation on Pass-thru of Losses to
Shareholders.--(a) The aggregate amount of losses taken into
account by a shareholder of a Pennsylvania S corporation under
section 307.9 shall not exceed the sum of the adjusted basis of
the shareholder's stock in the Pennsylvania S corporation,
determined after applying section 307.11(a) for the taxable year
and the shareholder's adjusted basis of any indebtedness of the
Pennsylvania S corporation to the shareholder, determined before
applying section 307.11(d) for the taxable year.
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(b) [There] Except as provided under section 304.3, there
shall be no carryover of losses by the shareholders of the
Pennsylvania S corporation.
Section 3. This act shall take effect immediately.
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