The Senate Finance Committee has advanced two legislative proposals introduced by Senator Doug Mastriano aimed at assisting Pennsylvania’s small businesses.
Senate Bill 253 targets the issue of double taxation imposed on small business partners. Currently, Pennsylvania resident business partners facing pass-through entity taxes in other jurisdictions experience taxation twice. In the state, pass-through entities are firms where profits pass directly to the owners, who then pay individual income tax on these profits. These entities must pay taxes to both Pennsylvania and the other state where the business operates. A tax relief credit that alleviates this burden is available to S corporation shareholders, but not to pass-through entities.
“Small businesses are the lifeblood of our communities and local economies. They deserve to be on a level playing field, especially because it would also benefit our economy,” Mastriano commented. “It’s good for business, and it’s good for our people.”
View Mastriano’s comments on Senate Bill 253 online.
Senate Bill 396 proposes to support small businesses and pass-through firms by allowing them the federal deductibility of business expenses without altering the total taxes owed. According to Mastriano, this measure would provide tax benefits and potentially redirect federal tax income back to the state’s small business owners for growth and reinvestment, thus fostering job creation in Pennsylvania.
“My bill would provide federal tax income benefits and put federal tax dollars back into the pockets of Pennsylvania’s small business owners that could be used for reinvestment and growth – creating more jobs for commonwealth residents,” Mastriano stated.
Thirty-four states, including all of Pennsylvania’s neighbors, have already implemented similar measures to those suggested in Mastriano’s proposal.
View Mastriano’s remarks on Senate Bill 396 online.
Both pieces of legislation now await consideration by the full Senate.
