NFIB Legislative Director Rebecca Oyler recently appeared on "Legislative Report" with state Reps. to discuss legislation critical for small business expansion and job creation.
NFIB Legislative Director Rebecca Oyler recently appeared on “Legislative Report” with state Rep. Wendi Thomas (R-Bucks) to discuss NFIB’s Small Business Tax Fairness Package. Oyler discussed growing up with a family business and noted the value that small businesses bring to the local community and economy. With 1 million small businesses in Pennsylvania, these bills are vitally important.
The Small Business Tax Fairness Package consists of three different bills: HB 105, HB 1603 & HB 333 (with corresponding Senate bills, SB 201, SB 202, and SB 203). HB 105 deals with like-kind exchanges. Pennsylvania is the only state that does not permit like-kind exchanges for small businesses. HB 105 would allow owners of pass-through businesses to defer personal income tax when they exchange property for a similar property. Assets can be traded for a replacement asset without creating a tax liability. This legislation would help businesses expand and create jobs. For example, if a small business trades a vacant piece of its property for another property of the same value that it needs to expand, there is no tax liability for the transaction. Corporate taxpayers in Pennsylvania are permitted to conduct like-kind exchanges. It is also permitted by federal law.
HB 1603 would allow owners of pass-through businesses to use the net operating loss (NOL) deduction to reduce their tax liability. Small business owners could deduct losses in one year against income recorded in subsequent years. This legislation is most helpful for start-ups and for small businesses that typically experience cyclical markets. This provision is already permitted for corporate taxpayers in Pennsylvania and permitted by federal law.
The final piece of legislation is HB 333, which would allow owners of pass-through businesses to take the full tax deduction for qualifying equipment permitted by Section 179 of the federal tax code. It increases the deduction during the current year from $25,000 to $1,000,000 (federal limit). This deduction is helpful for farmers, for example, who can pay up to $300,000 for a combine. Oyler stated that this legislation is about parity for small business owners. Oyler also noted that NFIB’s Small Business Optimism Index is at record highs and small business owners are looking to put money into their businesses.