Harrisburg – The Senate Finance Committee unanimously passed legislation sponsored by Sen. Jake Corman (R-Bellefonte) to reduce the burden of personal income tax on job-creators, especially those that operate a small business.
Senate Bill 562, permits individual taxpayers to offset gains within one class of income with losses within another class. In Pennsylvania, eight classes of income are set in statute.
“By not acknowledging an individual’s income loss, we are not fairly valuing that individual’s earnings,” Corman said. “Both losses and gains are felt by individuals and reflect in the bottom line. Allowing offsets will enable the state to tax a person on their true income.”
Senate Bill 1354 similarly provides fairness by acknowledging a loss in a class of income and allowing an individual taxpayer to carry that loss forward within a class of income in subsequent years.
“Again, the goal here is to recognize that a loss impacts a person’s income. Having an individual deal with a loss and then not recognizing the loss for tax purposes is a double whammy,” Corman said.
Both of these bills would move Pennsylvania in line with federal tax laws. Being one of a few states that does not allow some sort of offset or carry forward puts the Commonwealth at a competitive disadvantage.
“Both at the federal level, and within Pennsylvania’s rules for corporations, offsets and carry forwards are viewed as good tax policy to provide a fair assessment of one’s income,” Corman said. “Small businesses deserve this same policy, and I believe this will enable and encourage entrepreneurs to start up in our state, creating jobs and growing our economy.”