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Senate of Pennsylvania
Session of 2023 - 2024 Regular Session


Posted: December 2, 2022 11:25 AM
From: Senator Judy Ward
To: All Senate members
Subject: Net Operating Loss for Small Businesses
Soon I plan to reintroduce legislation that will help our Commonwealth’s small businesses by allowing them to use the Net Operating Loss deduction. This was Senate Bill 348 of the 2021-22 session.  

The option of using various tax strategies is critical to small businesses, as they do not have the same ability to access the capital that large business enterprises do. The use of tax strategies gives these small businesses greater control over their financial positions.  For example, if an owner sells some personal items to help the business make payroll, that owner can take the business loss against his or her tax bill created by selling the personal items. 
The Tax Reform Code of 1971 allows corporate taxpayers to deduct Pennsylvania losses in one year from Pennsylvania income in subsequent years, with limitations on the length of the carry forward period and the amount that is allowed to be carried. 


This legislation gives our small business owners this accounting tool, which is currently available to their large, corporate counterparts, and thus helps to create parity and fairness between these two groups.  Our small business are the backbone of our economy, and they should be allowed the same tax advantages as large businesses. 


Co-sponsors of Senate Bill 348 were Senators Bartolotta, Brooks, DiSanto, Dush, Hutchinson, Martin, Mastriano, Phillips-Hill, Pittman, Stefano, Vogel and K. Ward.  


Please join me in cosponsoring this important legislation.  If you have questions regarding this legislation please reach out to Greg Beckenbaugh in my office at 717-787-5490 or gbeckenbaug@pasen.gov. 


Introduced as SB662