Bill > HB1129

This bill establishes the Net Operating Loss Transfer Program, a new initiative that allows eligible businesses (primarily biotechnology and technology companies) to sell their unused net operating losses to other taxpayers. The program enables selling taxpayers (typically early-stage businesses with net losses) to transfer their tax benefits to purchasing taxpayers in exchange for private financial assistance. Eligible businesses must be located in Pennsylvania, have been in operation for seven years or less, and meet specific criteria such as having at least 30% of their full-time employees in the state. The program has several key limitations: selling taxpayers can transfer up to $20 million in lifetime net losses, with an annual cap of $5 million, and purchasing taxpayers can buy up to $100 million in tax benefits per year. The total program is capped at $200 million in transferable net losses annually. Selling taxpayers must use the received funds for allowable business expenditures and maintain their business in Pennsylvania for five years, or they may be required to repay a portion of the transferred benefits. The bill also reestablishes penalties for tax-related violations and requires the Department of Community and Economic Development to submit annual reports on the program's performance and effectiveness.

Budget and Finance

https://www.legis.state.pa.us/cfdocs/billinfo/bill_history.cfm?syear=2025&sind=0&body=H&type=B&bn=1129