PRINTER'S NO. 2083
No. 1385 Session of 2008
INTRODUCED BY CORMAN, REGOLA, VANCE, EICHELBERGER, BROWNE,
SCARNATI, PILEGGI, BAKER, MADIGAN, RAFFERTY, FOLMER, ORIE,
ERICKSON, PIPPY, WAUGH, RHOADES, GORDNER, EARLL, WONDERLING,
GREENLEAF, C. WILLIAMS AND BRUBAKER, MAY 30, 2008
REFERRED TO FINANCE, MAY 30, 2008
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further providing, in corporate net income, for
11 the definition of "taxable income."
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 401(3)4(c) of the act of March 4, 1971
15 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended
16 July 12, 2006 (P.L.1137, No.116), is amended to read:
17 Section 401. Definitions.--The following words, terms, and
18 phrases, when used in this article, shall have the meaning
19 ascribed to them in this section, except where the context
20 clearly indicates a different meaning:
21 * * *
1 (3) "Taxable income." * * *
2 4. * * *
3 (c) (1) The net loss deduction shall be the lesser of:
4 (A) (I) For taxable years beginning before January 1, 2007,
5 two million dollars ($2,000,000);
6 (II) For taxable years beginning after December 31, 2006,
7 the greater of twelve and one-half per cent of taxable income as
8 determined under subclause 1 or, if applicable, subclause 2 or
9 three million dollars ($3,000,000); [or]
10 (III) For taxable years beginning after December 31, 2007,
11 the greater of twenty per cent of the taxable income as
12 determined under subclause 1 or, if applicable, subclause 2 or
13 five million dollars ($5,000,000); or
14 (B) The amount of the net loss or losses which may be
15 carried over to the taxable year or taxable income as determined
16 under subclause 1 or, if applicable, subclause 2.
17 (1.1) In no event shall the net loss deduction include more
18 than five hundred thousand dollars ($500,000), in the aggregate,
19 of net losses from taxable years 1988 through 1994.
20 (2) (A) A net loss for a taxable year may only be carried
21 over pursuant to the following schedule:
22 Taxable Year Carryover
23 1981 1 taxable year
24 1982 2 taxable years
25 1983-1987 3 taxable years
26 1988 2 taxable years plus
27 1 taxable year
28 starting with the
29 1995 taxable year
30 1989 1 taxable year plus
20080S1385B2083 - 2 -
1 2 taxable years
2 starting with the
3 1995 taxable year
4 1990-1993 3 taxable years
5 starting with the
6 1995 taxable year
7 1994 1 taxable year
8 1995-1997 10 taxable years
9 1998 and thereafter 20 taxable years
10 (B) The earliest net loss shall be carried over to the
11 earliest taxable year to which it may be carried under this
12 schedule. The total net loss deduction allowed in any taxable
13 year shall not exceed:
14 (I) Two million dollars ($2,000,000) for taxable years
15 beginning before January 1, 2007.
16 (II) The greater of twelve and one-half per cent of the
17 taxable income as determined under subclause 1 or, if
18 applicable, subclause 2 or three million dollars ($3,000,000)
19 for taxable years beginning after December 31, 2006.
20 (III) The greater of twenty per cent of the taxable income
21 as determined under subclause 1 or, if applicable, subclause 2
22 or five million dollars ($5,000,000) for taxable years beginning
23 after December 31, 2007.
24 * * *
25 Section 2. This act shall take effect immediately.
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