Two tax reform measures and a proposal to tax commercial storage
Two critical tax changes have passed second consideration in the Pennsylvania House and are expected to get a final vote when that legislative body returns on May 22. NFIB supports both bills which would simplify the tax code for small business and help to jumpstart the state’s economy.
House Bill 331, sponsored by state Rep. Stephen Bloom (R-Cumberland), would allow an entrepreneur to sell one asset and purchase another similar asset without a tax penalty. Pennsylvania currently is the only state in the nation without this “like-kind” provision. The IRS also allows it. The change would encourage business expansion by enabling a business to upgrade their equipment, or buy a new building, and stretch out tax payments. HB 331 adopts the same provisions as the federal tax code.
House Bill 333 also survived second consideration by the full House and is expected to get a final vote in that body shortly. The bill is sponsored by Rep. Eric Nelson (R-Westmoreland), It allows small businesses to deduct up to $500,000 of a qualifying equipment purchase from state income taxes. The federal government and many states have similar “179 Expensing” provisions. Pennsylvania law already allows companies structured as C-corps to do this. Unfortunately, most of Pennsylvania’s small businesses are not organized as C-corps which creates an uneven playing field.
New Proposed Tax on Commercial Storage – NFIB is seeking member feedback on a proposal to impose a 6-percent sales tax on commercial storage. The Wolf Administration predicts the tax would generate $300 million in revenue – so someone would pay this tax. The question we would like to understand is who? Please contact [email protected] and let him know if this proposed tax change would affect you and your business.
