Legislation providing financial incentives to aid small businesses introduced in Senate

© Shutterstock

State Sens. Vincent J. Hughes (D-Philadelphia) and John Blake (D-Lackawanna) on Thursday introduced a new legislative package to aid small businesses in Pennsylvania through specific financial incentives; tax-deferred savings accounts and exemptions from certain business fees.

“There are many challenges that confront small business as they try to develop a market niche,” Blake said. “Helping small business grow creates jobs, improves the economic climate and provides greater business growth opportunities in the future.”

For the more than 1 million small businesses in Pennsylvania, there are currently 2.5 million small business employees. This represents 47 percent of all employees in the state. Small firms make up 98 percent of state employers.

“We need to recognize the contributions that small businesses make to our economy and do more to support their efforts,” Hughes said. “The bills in the package are intended to help small business prosper.”

Modeled after legislation introduced in New York state, Senate Bill 1196 would create tax-deferred savings accounts for small businesses, allowing those businesses to deposit profits into tax deferred accounts. The funding saved can then be used tax free for the purposes of job creation.

The second bill in the package, Senate Bill 1195 would exempt business start-up fees for businesses owned by women, service-disabled veterans, and minorities. The legislation would also cover disadvantaged small businesses and microenterprises. Fees for businesses that do not qualify for a full exemption would have a 50 percent reduction in the cost of those fees. The exempted fees, however, must be used for a business opening.

Blake noted the importance of finding new and effective ways to help small businesses, which include state government action to relieve burdens small business employers face. This legislation, Blake said, “addresses cost drivers that impact business operations.”