Bill > SB722

This bill modifies provisions related to net profits taxation for businesses in Pennsylvania, specifically addressing how net losses from small and non-small businesses can be calculated and carried over for tax purposes. The bill updates the definition of "small business" as an operating trade or business entity with fewer than fifty full-time equivalent employees, net book assets under $5 million, and owned by fewer than ten proprietors, partners, or shareholders. It establishes new rules for netting profits and losses across different business types, allowing net losses from small businesses to be carried over for up to twenty years and applied against future profits. The bill clarifies that spouses filing joint returns cannot combine their net profits and losses, and specifies that upon a business's termination, any net loss carryover expires and cannot transfer to another taxpayer. The changes will apply to tax years beginning after December 31, 2024, and the act takes effect immediately. This legislation aims to provide more precise guidelines for how businesses can account for and offset losses across different types of business entities.

Budget and Finance

https://www.legis.state.pa.us/cfdocs/billinfo/bill_history.cfm?syear=2025&sind=0&body=S&type=B&bn=722