Scarnati Supports Tax Package
Senator Joe Scarnati (R-Jefferson) this week voted for a four-bill stimulus package that would offer almost $96 million in tax relief in the upcoming fiscal year for lower-income working Pennsylvanians, small businesses looking to expand and other job creators.
"The package approved by the Senate today is intended to make our economy more competitive and help low-income working Pennsylvanians who are struggling," Scarnati said. “It makes commonsense reforms to our tax laws that will help to encourage job expansion and retention.”
Among the measures approved are:
Senate Bill 1385 -- would expand the cap on the Net Operating Loss provision of the Corporate Net Income Tax to $5 million or 20 percent of taxable income. The NOL cap is currently set at $3 million or 12.5 percent of taxable income. If enacted, the effective date of the increase would be January 1, 2009. The NOL expansion is projected to save Pennsylvania employers $21.5 million in Fiscal Year 2008-09, $68.4 million in Fiscal Year 2009-10, and $78.2 million in Fiscal Year 2010-11.
"Increasing the NOL cap would encourage businesses to expand their operation and create more jobs,” Scarnati said.
Senate Bill 1386 -- would increase the eligibility limits for special tax forgiveness for low-income Pennsylvanians. The bill would increase claimant income eligibility limits by a total of $2,000 over three years and the dependent allowance by $500 over the same period.
Currently, a family of four with a combined income of less than $32,000 pays no state income tax. Under SB 1386, families earning $37,000 or less would be exempt. That increase is projected to provide $74.6 million annually in savings to low-income working Pennsylvanians.
Scarnati noted that there has not been an increase in the base amount since 1998 and the dependent allowance has not been increased since 2003, the same year that Governor Rendell imposed his 10 percent personal income tax increase,
"With the skyrocketing cost of gas, and higher food and energy prices, low-income families are having a tough time making ends meet,” Scarnati said. “This bill would provide tax relief and help them keep more of their hard-earned dollars.”
Senate Bill 1387 -- would double the amount that small businesses may deduct as Section 179 expenses on their income tax filings. Section 179 of the federal Internal Revenue Code provides for the deduction of all or part of the costs of machinery and equipment used for business purposes.
Senate Bill 1387 would increase the maximum annual deduction to $50,000, which is projected to provide $6.6 million in savings to Pennsylvania's small businesses.
“This will provide a tax deduction to those small businesses that are purchasing equipment and machinery or looking to upgrade their facilities,” Scarnati said.
Senate Bill 1388, -- would amend Pennsylvania's Corporate Net Income Tax to expand the sales factor to 85 percent.
Scarnati explained that increasing the weight of the sales factor would help Pennsylvania companies that are based here, make their products in the state and employ state residents, as opposed to those companies that just sell their products here.
The bills now go to the House for consideration.
"The package approved by the Senate today is intended to make our economy more competitive and help low-income working Pennsylvanians who are struggling," Scarnati said. “It makes commonsense reforms to our tax laws that will help to encourage job expansion and retention.”
Among the measures approved are:
Senate Bill 1385 -- would expand the cap on the Net Operating Loss provision of the Corporate Net Income Tax to $5 million or 20 percent of taxable income. The NOL cap is currently set at $3 million or 12.5 percent of taxable income. If enacted, the effective date of the increase would be January 1, 2009. The NOL expansion is projected to save Pennsylvania employers $21.5 million in Fiscal Year 2008-09, $68.4 million in Fiscal Year 2009-10, and $78.2 million in Fiscal Year 2010-11.
"Increasing the NOL cap would encourage businesses to expand their operation and create more jobs,” Scarnati said.
Senate Bill 1386 -- would increase the eligibility limits for special tax forgiveness for low-income Pennsylvanians. The bill would increase claimant income eligibility limits by a total of $2,000 over three years and the dependent allowance by $500 over the same period.
Currently, a family of four with a combined income of less than $32,000 pays no state income tax. Under SB 1386, families earning $37,000 or less would be exempt. That increase is projected to provide $74.6 million annually in savings to low-income working Pennsylvanians.
Scarnati noted that there has not been an increase in the base amount since 1998 and the dependent allowance has not been increased since 2003, the same year that Governor Rendell imposed his 10 percent personal income tax increase,
"With the skyrocketing cost of gas, and higher food and energy prices, low-income families are having a tough time making ends meet,” Scarnati said. “This bill would provide tax relief and help them keep more of their hard-earned dollars.”
Senate Bill 1387 -- would double the amount that small businesses may deduct as Section 179 expenses on their income tax filings. Section 179 of the federal Internal Revenue Code provides for the deduction of all or part of the costs of machinery and equipment used for business purposes.
Senate Bill 1387 would increase the maximum annual deduction to $50,000, which is projected to provide $6.6 million in savings to Pennsylvania's small businesses.
“This will provide a tax deduction to those small businesses that are purchasing equipment and machinery or looking to upgrade their facilities,” Scarnati said.
Senate Bill 1388, -- would amend Pennsylvania's Corporate Net Income Tax to expand the sales factor to 85 percent.
Scarnati explained that increasing the weight of the sales factor would help Pennsylvania companies that are based here, make their products in the state and employ state residents, as opposed to those companies that just sell their products here.
The bills now go to the House for consideration.
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