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House Co-Sponsorship Memoranda
House of Representatives
Session of 2023 - 2024
Regular Session
MEMORANDUM
| Posted: | August 23, 2024 11:30 AM |
|---|---|
| From: | Representative Jason Ortitay |
| To: | All House members |
| Subject: | Assisting small business streamlining the Commonwealth’s tax code though additional conformity with federal tax law |
| While there are many aspects of the Commonwealth’s Personal Income Tax (PIT) that represent ideal tax policy, there are still areas that need to be addressed. For example, C Corporations that pay the Corporate Net Income Tax (CNIT) are permitted to use many federal deductions that are not available to pass-through business entities that pay the PIT. Because pass-through business entities are generally smaller businesses than C Corporations, this makes Pennsylvania a harder place for small businesses to thrive. This is especially concerning because many of our competitor states’ tax systems conform to the Internal Revenue Code and allow these types of federal deductions to be used for state tax purposes. I will soon be introducing legislation to address two of those areas, and I hope that you will join me as a co-sponsor for each of these proposals. DOCUMENT 1. Amortization of research and experimental expenditures. Under Section 174 of the Internal Revenue Code, taxpayers under the CNIT are permitted to use specific amortization rules for research and experimental expenditures, but these rules are not available to taxpayers under the PIT. At a time when we all know the importance of encouraging technology development and research, the Commonwealth should conform the PIT to this provision of federal law. |
Introduced as HB2544