Pennsylvania Governor Tom Corbett addressed state lawmakers on Tuesday February 5, 2013 to release details of his 2013-2014 state budget proposal ("Budget"). The Budget includes an increase in spending of approximately $679 million in the upcoming fiscal year, yet includes no proposed tax increases.
The Budget's impact reaches industries across a wide spectrum, including state government, health and human services, education, transportation and public safety, to name a few. The Governor also continues his efforts to make Pennsylvania a more friendly and desirable environment for both new and existing businesses. Some key elements of the Governor's business tax reform include:
- Eliminating the capital stock and foreign franchise tax beginning with the 2014 tax year.
- Gradually reducing the corporate net income tax from 9.99% to 6.99%. Beginning in calendar year 2015, the rate will drop to 9.89%.
- Increasing the annual maximum net operating loss deduction from $3 million to $5 million. The maximum deduction will increase to $4 million in 2014.
- Simplifying the tax code and repealing out-of-date taxation and administrative provisions such as:
- Following federal tax treatment of like-kind exchanges and business startup costs
- Repealing the corporate loans tax
Copies of the 2013-14 Governor's Executive Budget and Budget in Brief can be accessed online via the following link: http://www.budget.state.pa.us
We will continue to monitor the progress of the Budget as it makes its way through the legislative process and issue updates as they become available.
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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.