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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: January 9, 2018 09:40 AM
From: Representative Francis X. Ryan
To: All House members
The U.S. tax landscape has undergone significant changes with the enacting of sweeping legislation overhauling our federal tax system. The new law is significant and complex. It is designed to stimulate economic growth and development by reforming both individual income and corporate income taxes. The impact at the state level, which at this point is less defined than at the federal level in terms of revenue impact, is potentially significant, particularly on the business tax side.

Under the new law, bonus depreciation doubles from 50 to 100 percent for property purchased between September 27, 2017, and January 1, 2023 (or January 1, 2024, for a small category of property). After that date, at 20 percent phase-down takes effect. Also, bonus depreciation amount is now permitted for the purchase of used property, in addition to new property. This is a common tax plan strategy used by virtually all businesses at some point in time, both large and small.

But not in Pennsylvania. Businesses looking to expand in Pennsylvania will not be able to take advantage of this provision. On Dec. 22, 2017, the Pennsylvania Department of Revenue issued Corporate Tax Bulletin 2017-02. Under 2017-02, in the best case scenario, a taxpayer gets no deduction until the asset is sold or disposed of. If the taxpayer has equipment that may be used indefinitely, it could effectively get no depreciation write-off in Pennsylvania. This draconian pronouncement essentially tells businesses owners “thanks, but no thanks, Pennsylvania is closed for business.

I plan to introduce legislation in the near future that will reverse the provisions of Bulletin 2017-02 and allow Pennsylvania businesses the opportunity to take advantage of this important provision. Please join me in cosponsoring this change.

Introduced as HB2017