1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," in corporate net income tax, further providing
11for the definition of "taxable income."

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. Section 401(3)4(c) of the act of March 4, 1971
15(P.L.6, No.2), known as the Tax Reform Code of 1971, amended
16October 9, 2009 (P.L.451, No.48), is amended to read:

17Section 401. Definitions.--The following words, terms, and
18phrases, when used in this article, shall have the meaning
19ascribed to them in this section, except where the context
20clearly indicates a different meaning:

21* * *

1(3) "Taxable income." * * *

24. * * *

3(c) (1) The net loss deduction shall be the lesser of:

4(A) (I) For taxable years beginning before January 1, 2007,
5two million dollars ($2,000,000);

6(II) For taxable years beginning after December 31, 2006,
7the greater of twelve and one-half per cent of taxable income as
8determined under subclause 1 or, if applicable, subclause 2 or
9three million dollars ($3,000,000);

10(III) For taxable years beginning after December 31, 2008,
11the greater of fifteen per cent of taxable income as determined
12under subclause 1 or, if applicable, subclause 2 or three
13million dollars ($3,000,000);

14(IV) For taxable years beginning after December 31, 2009,
15the greater of twenty per cent of taxable income as determined
16under subclause 1 or, if applicable, subclause 2 or three
17million dollars ($3,000,000); [or]

18(V) For taxable years beginning after December 31, 2012, the
19greater of twenty-five per cent of taxable income as determined
20under subclause 1 or, if applicable, subclause 2 or five million
21dollars ($5,000,000); or

22(B) The amount of the net loss or losses which may be
23carried over to the taxable year or taxable income as determined
24under subclause 1 or, if applicable, subclause 2.

25(1.1) In no event shall the net loss deduction include more
26than five hundred thousand dollars ($500,000), in the aggregate,
27of net losses from taxable years 1988 through 1994.

28(2) (A) A net loss for a taxable year may only be carried
29over pursuant to the following schedule:

30Taxable Year	Carryover
20130SB0233PN0371 -2-
11981	1 taxable year
21982	2 taxable years
31983-1987	3 taxable years
41988 5  6  7	2 taxable years plus 1 taxable year starting with the 1995 taxable year
81989 9  10  11	1 taxable year plus 2 taxable years starting with the 1995 taxable year
121990-1993 13  14	3 taxable years starting with the 1995 taxable year
151994	1 taxable year
161995-1997	10 taxable years
171998 and thereafter	20 taxable years

18(B) The earliest net loss shall be carried over to the
19earliest taxable year to which it may be carried under this
20schedule. The total net loss deduction allowed in any taxable
21year shall not exceed:

22(I) Two million dollars ($2,000,000) for taxable years
23beginning before January 1, 2007.

24(II) The greater of twelve and one-half per cent of the
25taxable income as determined under subclause 1 or, if
26applicable, subclause 2 or three million dollars ($3,000,000)
27for taxable years beginning after December 31, 2006.

28(III) The greater of fifteen per cent of the taxable income
29as determined under subclause 1 or, if applicable, subclause 2
30or three million dollars ($3,000,000) for taxable years

1beginning after December 31, 2008.

2(IV) The greater of twenty per cent of the taxable income as
3determined under subclause 1 or, if applicable, subclause 2 or
4three million dollars ($3,000,000) for taxable years beginning
5after December 31, 2009.

6(V) The greater of twenty-five per cent of taxable income as
7determined under subclause 1 or, if applicable, subclause 2 or
8five million dollars ($5,000,000) for taxable years beginning
9after December 31, 2012.

10* * *

11Section 2. This act shall take effect immediately.