Rep. Josh Kail (R-Beaver/Washington) has introduced legislation aimed at improving Pennsylvania’s tax climate for small businesses by removing the cap on Net Operating Loss (NOL) carryforward deductions by 2025. This initiative is intended to support small businesses and enhance the state’s attractiveness and competitiveness for new enterprises.
Currently, Pennsylvania restricts a business’s NOL carryforward deduction to 40% of taxable income, making it one of only two states with such a cap below the federal limit of 80%. This restriction can penalize start-ups that typically incur losses in their initial years and manufacturers in commodity markets that experience significant profit and loss fluctuations.
“Making Pennsylvania business-friendly is not just a goal; it’s a fundamental necessity, which is why I am calling for an end to the start-up penalty,” said Kail. “My legislation promotes a tax structure that is beneficial for entrepreneurs and cyclical businesses, both of which are critical to a healthy economy. By uncapping NOL deductions, we achieve an environment that welcomes innovation and fosters opportunities for family-sustaining jobs. My legislation establishes hope for enhancing the quality of life for all residents of the Commonwealth.”
Representative Josh Kail
15th Legislative District
Pennsylvania House of Representatives
Media Contact: Nancy Nilson
717.260.6238
nnilson@pahousegop.com
