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House of Representatives
Session of 2021 - 2022 Regular Session


Posted: February 5, 2021 02:59 PM
From: Representative Mike Jones and Rep. Peter Schweyer
To: All House members
Subject: Elimination of Net Operating Loss Expiration
Under Pennsylvania’s corporate net income tax law, a businesses’ net operating loss (NOL) can be carried forward into future tax years for up to a maximum of twenty (20) years. While this time period may seem adequate, in some cases as businesses are either starting up or looking to grow, they may not be able to use their net operating loss deductions within that timeframe.  The unnecessary expiration of these deductions reduces our businesses’ ability to grow and invest in our communities.  More importantly, the expiration of the credit often causes unnecessary nuisance accounting requirements, and is inconsistent with federal standards which have eliminated these unnecessary expirations. Our proposal simply removes the time limitation a business may carry forward a net operating loss.  Lastly, because it is not retroactive, it has no impact on revenue for the next twenty years.
We believe this is a common sense measure that will aid in the long-term health of businesses operating in Pennsylvania and incentivize them to continue to invest in our hardworking citizens and the communities in which they reside.

I respectfully ask you join Rep. Schweyer and myself in co-sponsoring this important legislation.

Introduced as HB732