Posted: | September 11, 2020 02:27 PM |
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From: | Representative George Dunbar |
To: | All House members |
Subject: | NOL Changes for Covid 19 Losses |
Many of our businesses both large and small have suffered huge losses due to circumstances out of their control. As we continue to battle the Covid 19 pandemic it is also important to begin the task of identifying economic recovery tools that we can utilize to reinvigorate these businesses. One such tool would be the temporary relaxation of deductibility limits for NOL’s. Prior year losses (NOL’s) are allowed to be deducted from current year income for PA tax purposes but is limited to 40% of the income. Although this relief is a benefit, it simply is not enough in these challenging times. My proposal is to allow an NOL deduction up to 100% of income next tax year to allow these companies a chance to recover and reinvest in PA. The additional 60% deduction can only be from losses that occurred in this tax year and does not apply to losses carried forward from prior tax years. This one-time benefit may be the difference between companies continuing to operate or having to shut down. The reduction in tax revenue would have no effect on the fiscal year end 06/30/21 budget. Please join me in co-sponsoring this worthwhile legislation. |
Introduced as HB2871