Republican lawmakers target ‘unfair tax obstacles’ with legislative proposals aimed at helping small businesses

Republican lawmakers want to ease taxes the state of Pennsylvania charges small businesses and have introduced a series of bills they say would level the playing field.

“While Pennsylvania has a lot of advantages … we are, unfortunately, consistently ranked as one of the most business-unfriendly states when it comes to regulatory policy, tax policy,” state Rep. Mike Jones, R-York Township, said during a recent news conference. Jones helped start the Economic Growth Caucus.

House Bill 1603, sponsored by state Rep. Seth Grove, R-York, would enable small businesses to use the Net Operating Loss deduction and take advantage of a deduction similar to one a corporate taxpayer can claim. Under the proposal, which has been referred to the House Finance Committee, small businesses could deduct losses in one year against other classes of income in the tax year.

Another bill, House Bill 105, sponsored by state Rep. Jim Cox, R-Sinking Spring, would remove taxes on businesses that engage in like-kind exchanges such as trading one parcel of land for another of comparable value. Pennsylvania is the only state that taxes such transactions, according to Cox.

“We want our tax policies to encourage business growth and job creation,” Cox said in a news release. “This is an issue of tax fairness. We want Pennsylvania job creators to be able to compete with businesses in other states on a level playing field. These are the kinds of policies that can determine whether a new job is created in our Commonwealth and a Pennsylvanian is able to feed his or her family.”

Meanwhile, House Bill 333, sponsored by state Rep. Eric Nelson, R-Greensburg, would allow small businesses to deduct the full purchase price up to $1 million of qualifying equipment purchased during the tax year. The deduction would phase out if the total amount of equipment purchased is over $2.5 million.

“This package of bills would remove unfair tax obstacles small businesses must face,” Grove said in a news release. “Small businesses are pillars of (the) economy, creating 65 percent of jobs in the Commonwealth. These bills would allow them to compete effectively, so they can grow more jobs for current and future generations.”

The tax codes in at least 33 other states allow the same limit, Grove and Nelson said in a memo.

“Small business owners are the heart and soul of our communities,” Gordon Denlinger, state director of the National Federation of Independent Business in Pennsylvania, said at a recent news conference.

“They are the neighbors who put the float in your annual parade, who buy T-shirts for the little league team and who give all of our teenagers that all-important first job experience,” Denlinger added. “Small business owners are our friends seeking to live out their American dream through operating a small business, hopefully making some profit for all their efforts.”

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