HARRISBURG, (February 6, 2017) – The National Federation of Independent Business (NFIB), which represents 14,000 small businesses in Pennsylvania, applauded lawmakers today who are sponsoring three bills which will simplify the state’s tax code and help small businesses grow.
“Right now, small businesses spend thousands of dollars hiring tax experts at an average OF$74 dollars an hour because doing their taxes is such a complex process,” said Kevin Shivers, executive state director of NFIB. “While a business owner would much prefer to spend time expanding their business and creating jobs, instead they are burdened with hours of paperwork getting ready for Tax Day.
“These changes not only align the state tax code with the federal code, they also help businesses expand, buy more equipment and hire new employees. The changes have already been adopted by many states and the federal government to help economic growth. Pennsylvania will also see its economy grow if they are adopted.”
One new tax bill which allows for like-kind exchanges is sponsored by Rep. Steve Bloom (R-Cumberland) and Sen. Mike Folmer (R-Lebanon). The measure would help a business expand by allowing taxes to be deferred if the company sells a building or equipment and immediately purchases another property or buys more modern technology of a similar nature. The federal tax code and every other state except Pennsylvania currently allow for like-kind exchanges.
Rep. Eric Nelson (R-Westmoreland) and Sen. Scott Hutchinson (R-Venango) have introduced a bill to improve expensing and depreciation related to the purchase of equipment under the state’s tax code. This bill would increase the allowable amount of the purchase to a level recently adopted by the federal government.
Rep. Seth Grove, (R-York) and Sen. John Eichelberger (R-Blair) are sponsoring a bill that would allow a small business owner to deduct losses from one category of income against gains in another. Most small businesses report income on their personal tax return, so when their business suffers a loss, they can’t offset that loss against other categories of income on that return.
Small businesses don’t have access to the capital larger companies have, their ability to use such tax strategies helps them have greater control over their financial position. An example: If an owner sells some personal items to help his business make payroll, he can take the business loss against the tax bill he creates selling the personal items.