PRIOR PRINTER'S NO. 2247

PRINTER'S NO. 3035

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1960

Session of

2021

INTRODUCED BY KAIL, BERNSTINE, SCHLEGEL CULVER, DUNBAR, GROVE,

IRVIN, JAMES, KEEFER, MIHALEK, MILLARD, MIZGORSKI, O'NEAL,

PENNYCUICK, PICKETT, ROTHMAN, ROWE, RYAN, SMITH, THOMAS,

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 corporate net income tax, further providing

for definitions.

AMENDING THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), ENTITLED "AN

EMPLOYERS, FIDUCIARIES, INDIVIDUALS, PERSONS, CORPORATIONS

AND OTHER ENTITIES; PRESCRIBING CRIMES, OFFENSES AND

PENALTIES," IN CORPORATE NET INCOME TAX, FURTHER PROVIDING

FOR DEFINITIONS AND FOR IMPOSITION OF TAX AND PROVIDING FOR

CERTIFICATIONS AND PUBLICATIONS.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 401(3)4(c)(1) and (2) of the act of March

4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, are

* * *

(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);

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

million dollars ($3,000,000);

(V) For taxable years beginning after December 31, 2013, the

greater of twenty-five per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or four million

dollars ($4,000,000);

(VI) For taxable years beginning after December 31, 2014,

the greater of thirty per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or five million

of taxable income as determined under subclause 1 or, if

applicable, subclause 2; [or]

(IX) For taxable years beginning after December 31, 2021,

fifty per cent of taxable income as determined under subclause 1

or, if applicable, subclause 2;

(X) For taxable years beginning after December 31, 2022,

sixty per cent of taxable income as determined under subclause 1

or, if applicable, subclause 2;

(XI) For taxable years beginning after December 31, 2023,

seventy per cent of taxable income as determined under subclause

(1) EXCEPT AS PROVIDED UNDER UNIT (2), FOR TAXABLE YEARS

BEGINNING AFTER DECEMBER 31, 2023, FORTY-FIVE PER CENT OF

TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE 1 OR, IF

APPLICABLE, SUBCLAUSE 2;

(2) IF THE CONDITION UNDER SECTION 408.2(C)(2) IS CERTIFIED

BY THE INDEPENDENT FISCAL OFFICE AS HAVING BEEN MET, FOR TAXABLE

YEARS BEGINNING AFTER DECEMBER 31, 2024, FIFTY PER CENT OF

TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE 1 OR, IF

TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE 1 OR, IF

APPLICABLE, SUBCLAUSE 2; 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.

* * *

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

over pursuant to the following schedule:

Taxable Year Carryover

1981 1 taxable year

1989 1 taxable year plus

2 taxable years

starting with the

1995 taxable year

1990-1993 3 taxable years

starting with the

1995 taxable year

1994 1 taxable year

(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.

(III) The greater of fifteen 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, 2008.

four million dollars ($4,000,000) for taxable years beginning

after December 31, 2013.

(VI) The greater of thirty per cent of taxable income as

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

five million dollars ($5,000,000) for taxable years beginning

after December 31, 2014.

(VII) Thirty-five per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 for taxable

subclause 1 or, if applicable, subclause 2 for taxable years

beginning after December 31, 2021.

(X) Sixty per cent of taxable income as determined under

subclause 1 or, if applicable, subclause 2 for taxable years

beginning after December 31, 2022.

(XI) Seventy per cent of taxable income as determined under

subclause 1 or, if applicable, subclause 2 for taxable years

beginning after December 31, 2023.

(XII) Eighty per cent of taxable income as determined under

subclause 1 or, if applicable, subclause 2 for taxable years

APPLICABLE, SUBCLAUSE 2 FOR TAXABLE YEARS BEGINNING AFTER

DECEMBER 31, 2023.

(2) IF THE CONDITION UNDER SECTION 408.2(C)(2) IS CERTIFIED

BY THE INDEPENDENT FISCAL OFFICE AS HAVING BEEN MET, FIFTY PER

CENT OF TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE 1 OR, IF

APPLICABLE, SUBCLAUSE 2 FOR TAXABLE YEARS BEGINNING AFTER

DECEMBER 31, 2024.

(X) IF THE CONDITION UNDER SECTION 408.2(C)(1) IS NOT

* * *

SECTION 2. SECTION 402(B) OF THE ACT IS AMENDED AND THE

(B) THE ANNUAL RATE OF TAX ON CORPORATE NET INCOME IMPOSED

BY SUBSECTION (A) FOR TAXABLE YEARS BEGINNING FOR THE CALENDAR

YEAR OR FISCAL YEAR ON OR AFTER THE DATES SET FORTH SHALL BE AS

FOLLOWS:

TAXABLE YEAR TAX RATE

JANUARY 1, 1995, [AND

EACH TAXABLE YEAR

THEREAFTER] THROUGH

DECEMBER 31, 2022 9.99%

EXCEPT AS OTHERWISE

(D) THE FOLLOWING SHALL APPLY TO THE TAX RATE UNDER THIS

ARTICLE:

(1) THE SECRETARY OF THE BUDGET SHALL CONSULT WITH THE

INDEPENDENT FISCAL OFFICE IN PRODUCING THE CERTIFICATION UNDER

NO.176), KNOWN AS "THE FISCAL CODE," FOR FISCAL YEAR 2022-2023

AND FISCAL YEAR 2023-2024. THE CERTIFICATION UNDER THIS

PARAGRAPH SHALL BE PREPARED IN A WAY THAT IS SUBJECT TO COMPLETE

AND THOROUGH OVERSIGHT BY THE APPROPRIATIONS COMMITTEE OF THE

SENATE AND THE APPROPRIATIONS COMMITTEE OF THE HOUSE OF

REPRESENTATIVES WITH FULL KNOWLEDGE OF ALL DATA, ASSUMPTIONS AND

THE HOUSE OF REPRESENTATIVES AND TO THE LEGISLATIVE REFERENCE

BUREAU FOR PUBLICATION IN THE PENNSYLVANIA BULLETIN.

(3) IF THE INDEPENDENT FISCAL OFFICE CONFIRMS THE AMOUNT OF

SURPLUS IN THE GENERAL FUND WHICH IS CERTIFIED UNDER PARAGRAPH

(1), THE INDEPENDENT FISCAL OFFICE SHALL TRANSMIT TO THE

LEGISLATIVE REFERENCE BUREAU A NOTICE FOR PUBLICATION IN THE

PENNSYLVANIA BULLETIN. THE NOTICE SHALL INCLUDE THE AMOUNT OF

THE SURPLUS CERTIFIED AND WHETHER THE FOLLOWING CONDITIONS HAVE

BEEN MET:

(I) WHETHER THE SURPLUS FOR THE 2022-2023 FISCAL YEAR WAS

TAXABLE YEARS BEGINNING FOR THE CALENDAR YEAR OR FISCAL YEAR

AFTER DECEMBER 31, 2023, SHALL BE EIGHT AND FORTY-NINE

HUNDREDTHS PER CENT (8.49%).

(II) IF THE CONDITION UNDER PARAGRAPH (3)(II) IS CERTIFIED

BY THE INDEPENDENT FISCAL OFFICE AS HAVING BEEN MET, THE ANNUAL

RATE ON CORPORATE NET INCOME IMPOSED UNDER SUBSECTION (A) FOR

INDEPENDENT FISCAL OFFICE AS HAVING BEEN MET, THE ANNUAL RATE ON

CORPORATE NET INCOME IMPOSED UNDER SUBSECTION (A) FOR TAXABLE

YEARS BEGINNING FOR THE CALENDAR YEAR OR FISCAL YEAR AFTER

DECEMBER 31, 2024, SHALL BE EIGHT AND FORTY-NINE HUNDREDTHS PER

CENT (8.49%).

SECTION 3. THE ACT IS AMENDED BY ADDING A SECTION TO READ:

SECTION 408.2. CERTIFICATIONS AND PUBLICATIONS.-- (A) THE

SECRETARY OF THE BUDGET SHALL CONSULT WITH THE INDEPENDENT

FISCAL OFFICE IN PRODUCING THE CERTIFICATION UNDER SECTION 1702-

A(B) OF THE ACT OF APRIL 9, 1929 (P.L.343, NO.176), KNOWN AS