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House Co-Sponsorship Memoranda
House of Representatives
Session of 2023 - 2024
Regular Session
MEMORANDUM
| Posted: | April 2, 2024 08:36 AM |
|---|---|
| From: | Representative Paul Friel |
| To: | All House members |
| Subject: | Sale of Net Operating Losses |
| Start-up businesses, especially technology and biotechnology businesses, face significant challenges when entering the marketplace and often require several rounds of funding to reach maturity. These companies often have a need to raise capital to scale and bring innovations to the marketplace. Pennsylvania is fortunate to be home to many of these new and exciting ventures. However, competition for capital can often result in the relocation of the business to other states with more favorable capital markets or operating and tax policy conditions. With this in mind, I plan to introduce legislation to allow these early-stage businesses to sell their net operating losses and unused research and development tax credits to unrelated companies, converting their losses to capital. Based on a New Jersey law, my bill will permit monies received from these sales to be used to build and grow the operating business here in Pennsylvania, investing in high paying jobs within the Commonwealth. Qualifying businesses would be provided a valuable source of non-dilutive capital during the most vulnerable period of their development. Bolstering these new and innovative businesses supports the creation of good jobs within in-demand industries and serves to strengthen Pennsylvania’s economy now and into the future. To remain competitive, Pennsylvania must cultivate businesses on the leading edge of technology. I hope that you will join me in supporting these emerging businesses. |
Introduced as HB2226