The PA Chamber noted its support of S.B. 349 which passed the Senate last week in a memo sent to the full Senate supporting the measure. The legislation provides much-needed relief and equity for struggling small businesses, encouraging capital investment and job creation.

Senate Bill 349 would bring Pennsylvania in line with every other state related to a state tax deduction, which would improve our competitiveness.

Section 179 of the federal tax code allows owners of pass-through businesses to take a tax deduction for the full purchase price of qualifying equipment. The Tax Cuts and Jobs Act increased the federal limit for Section 179 expenses from $500,000 to $1 million.

Pennsylvania law allows those subject to state corporate income tax to take the full deduction, but limits the deductions for businesses subject to the state personal income tax to $25,000.  Senate Bill 349 would provide equity for small businesses, increasing the deduction during the current year from $25,000 to $1,050,000 or consistent with the federal limit.

The Senate passed the measure for the first time since its introduction in 2014 in a 31-19 vote.  The bill heads over to the House for approval.