THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY TURZAI, ADOLPH, BAKER, BARRAR, BEAR, BENNINGHOFF, BEYER, BOYD, BROOKS, CAUSER, CIVERA, CLYMER, CREIGHTON, CUTLER, DALLY, DENLINGER, ELLIS, EVERETT, FAIRCHILD, FLECK, GABLER, GEIST, GEORGE, GIBBONS, GINGRICH, GODSHALL, GOODMAN, GRELL, GROVE, HARRIS, HENNESSEY, HESS, HORNAMAN, HUTCHINSON, KAUFFMAN, M. KELLER, KILLION, KORTZ, KOTIK, MAJOR, MARSHALL, MARSICO, METCALFE, MICOZZIE, MILLARD, MILLER, MILNE, MOUL, MURT, MUSTIO, OBERLANDER, O'NEILL, PAYNE, PERRY, PETRARCA, PETRI, PHILLIPS, PICKETT, PYLE, QUIGLEY, QUINN, RAPP, REED, REESE, REICHLEY, ROAE, ROHRER, ROSS, SAYLOR, SCAVELLO, SONNEY, STERN, STEVENSON, TALLMAN, R. TAYLOR, TRUE, VULAKOVICH, WATSON, WHEATLEY AND YUDICHAK, MARCH 4, 2009

REFERRED TO COMMITTEE ON FINANCE, MARCH 4, 2009  

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," further providing, in corporate net income, for

the definition of "taxable income."

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 401(3)4(c) of the act of March 4, 1971

(P.L.6, No.2), known as the Tax Reform Code of 1971, amended

July 12, 2006 (P.L.1137, No.116), is amended to read:

Section 401.  Definitions.--The following words, terms, and

phrases, when used in this article, shall have the meaning

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

(3)  "Taxable income."  * * *

4.  * * *

(c)  (1)  The net loss deduction shall be the [lesser of:

(A)  (I)  For taxable years beginning before January 1, 2007,

two million dollars ($2,000,000);

(II)  For taxable years beginning after December 31, 2006,

the greater of twelve and one-half per cent of taxable income as

determined under subclause 1 or, if applicable, subclause 2 or

three million dollars ($3,000,000); or

(B)  The] amount of the net loss or losses which may be

carried over to the taxable year or taxable income as determined

under subclause 1 or, if applicable, subclause 2.

[(1.1)  In no event shall the net loss deduction include more

than five hundred thousand dollars ($500,000), in the aggregate,

of net losses from taxable years 1988 through 1994.]

(2)  (A)  A net loss for a taxable year may only be carried

over pursuant to the following schedule:

  (B)  The earliest net loss shall be carried over to the

earliest taxable year to which it may be carried under this

schedule. [The total net loss deduction allowed in any taxable

year shall not exceed:

(I)  Two million dollars ($2,000,000) for taxable years

beginning before January 1, 2007.

(II)  The greater of twelve and one-half per cent of the

taxable income as determined under subclause 1 or, if

applicable, subclause 2 or three million dollars ($3,000,000)

for taxable years beginning after December 31, 2006.]

* * *

Section 2.  The amendment of section 401(3)4(c) of the act

shall apply to taxable years beginning after December 31, 2006.

Section 3.  This act shall take effect immediately.