Legislation introduced Monday would update state tax laws to help small businesses negatively impacted by the COVID-19 pandemic.
The legislation would make three changes.
It would allow small businesses to take a net loss against other sources of income. A business owner who sells personal property to make payroll, for example, would be able to deduct the business loss against the tax bill from selling the personal property.
The bill also would allow small businesses to take Net Operating Losses against future years for up to 20 years. Under current law, large corporations are already able to do this.
Finally, the bill would allow small businesses to carry back losses to previous tax years.
Businesses that suffered net operating losses in 2018 or 2019 could apply for a tentative tax refund if they were profitable in any of the five years prior to the loss.
State Sens. Camera Bartolotta (R- Beaver/Greene.Washington counties) and Judy Ward (R- Blair County) introduced the bill.
“Many small businesses that have been profitable for years are now seeing losses that are entirely due to COVID-19,” Ward said. “Small shops and mom-and-pop operations do not have massive amounts of savings; they are holding on by a thread. We cannot allow these families to lose everything they have worked so hard to build because of this virus – and the Wolf Administration’s response to it.”