Pennsylvania Business Leaders Seek Tax Changes from Lawmakers
On the heels of news that Pennsylvania ranks 42nd in the nation for best places to do business, the CompetePA Coalition is calling on lawmakers to change the corporate tax structure. In particular, the group is asking that the $3 million cap on net operating loss (NOL) carryforwards be eliminated.
“Right now only two states, Pennsylvania and New Hampshire, are the only two states that put a cap on NOLs,” said CompetePA’s Jennifer Beer. “So this (cap elimination) would even out the playing field, in our opinion, for businesses that have to deal with this.”
A net operating loss occurs when certain expenses exceed revenue for a taxable year. Carrybacks and carryforwards allow businesses to balance tax burdens during profitable and non-profitable years. The cap on Pennsylvania businesses’ NOL is harmful to jobs, according to CompetePA.
“Removal of the cap would bring in businesses, bring in jobs, because if there’s only two states in the country that have a cap, if they’re (businesses) looking at the business climate of any neighboring states, they’re going to want to look at the whole breadth of a states’ business tax structure,” Beer said.
Formed in 2005, CompetePA is a coalition of businesses and organizations that work to promote tax structure changes in the commonwealth. In addition to the elimination of the cap on NOLs, the group is urging lawmakers to fix “structural flaws inherent within the Corporate Net Income Tax.”
The group is pushing for changes as lawmakers work to finalize the state budget.