Bonus Depreciation Bill Advances in State Senate

From PA Chamber of Business & Industry

Important legislation that would fix a serious business tax competitiveness issue in Pennsylvania advanced from the Senate Finance Committee last week.

House Bill 2017 would reverse a harmful Department of Revenue decision that was announced via a bulletin in late December 2017, and prohibits taxpayers from claiming a full 100 percent bonus depreciation dedication when filing their Pennsylvania taxes. The ruling also bars employers from applying a deduction until their assets are disposed of or sold; making the Commonwealth the only state in the nation to disallow any form of accelerated depreciation. This anti-business action, when combined with other counter-productive tax policies – such as our state having the highest effective Corporate Net Income tax rate in the nation and capping Net Operating Loss Carry forwards — strongly discourages businesses from investing in Pennsylvania.

The PA Chamber has been out in front on its support for H.B. 2017 since Rep. Frank Ryan, R-Lebanon, authored the bill early this year in response to the Department of Revenue’s ruling. After the House’s nearly unanimous passage of the bill a few weeks ago, PA Chamber President Gene Barr issued this statement; Vice President of Government Affairs Sam Denisco also sent a memo to the Senate Finance Committee prior to its consideration of the bill that urged committee lawmakers to vote ‘yes’ on the legislation. “Reacting to the accelerated depreciation provisions in the federal Tax Cuts and Jobs Act, the Department takes an unfair and extreme position that runs counter to the legislative intent of the statute,” Denisco wrote. “The PA Chamber supports H.B. 2017 as it provides an accepted from of depreciation thereby providing more certainty and predictability for employers when investing in the Commonwealth.”

House Bill 2017 now awaits further consideration by the full Senate.