From PA Chamber of Business & Industry
The 2013-14 General Fund budget signed on June 30th and accompanying Tax Code bill contain many positive provisions for Pennsylvania job creators and residents, but at the same time reflect the consequences of the $47 billion and growing public pension debt.
The new state budget raises the cap on the amount of revenue losses businesses can claim for tax purposes. The $3 million NOL cap increases to $4 million in 2014 and $5 million in 2015.
In addition, the inheritance tax on small family-owned businesses has been eliminated; and the Corporate Loans Tax is slated for repeal in 2014.
However, the budget also contains strengthened expense add-back provisions and slows down, for the fourth time, the elimination of the Capital Stock and Franchise tax; a plan to begin reducing the 9.99 percent Corporate Net Income tax was also not included.
The CSFT was scheduled for elimination on Jan. 1, 2014. The decision to put that elimination on hold came into play when it was determined that more revenue would be needed to fulfill the state’s public pension obligations. The CSFT will now remain on the books through 2016, although the rate will be gradually lowered for each of the next two years. The current 0.89 percent tax rate will decline to 0.67 percent in 2014 and 0.45 percent in 2015. It is expected to generate $58 million next fiscal year, $183 million in 2014-15 and $99 million in 2015-16, according to estimates from the House Appropriations Committee.