PA Chamber Leads NOL Reform Push as Budget Negotiations Continue

PA Chamber President and CEO Luke Bernstein recently explained why Pennsylvania’s uncompetitive treatment of Net Operating Losses (NOLs) can be aptly defined as ‘Nother Opportunity Lost” on Politics PA’s video podcast, “Voices of Reason.” Bernstein spoke in favor of policies to make Pennsylvania more competitive and the importance of drawing on our assets to attract and retain new generations of workers. You can watch the program here.

This vocal advocacy is just the latest in the PA Chamber’s numerous efforts to improve Pennsylvania’s treatment of NOLs in the state tax code. Net Operating Loss deductions allow businesses to offset their tax liabilities with previous years’ losses. This helps states attract more employers, create jobs, and reduce hurdles to business growth. Currently, Pennsylvania is at a competitive disadvantage in this area because it caps its NOL rate at 40 percent – one of just two states that cap NOL deductions below the federal limit of 80 percent of taxable income. Meanwhile, 24 other states have no cap on NOLs, making them far more attractive to employers – especially smaller businesses, start-ups, and cyclical businesses that typically operate through lean times throughout the year. In fact, a recent study by the Kauffmann Foundation showed the negative impact of Pennsylvania’s business tax structure on its ability to draw in new business when it identified the Commonwealth as having the lowest rate of new entrepreneurs in the country.  As lawmakers work toward wrapping up the FY 2024-25 state budget deal, we’re urging them to improve Pennsylvania’s treatment of NOLs among their achievements. We’ve spent the last several months informing lawmakers and the public about the need to take this important step and the ways in which it would boost the state’s prospects for generating entrepreneurial opportunities and job growth. Our efforts include:

  • Leading a coalition of more than 70 chambers of commerce across Pennsylvania in sending a letter to the governor and the General Assembly, calling on them to improve Pennsylvania’s economic competitiveness by eliminating this tax penalty on start-up businesses;
  • Hosting a press conference on NOL reform with a bipartisan group of House and Senate members, PA Chamber President and CEO Luke Bernstein, and Flashfood President and CEO Nick Bertram that gained statewide media attention;
  • Creating a public-facing video explaining in layman’s terms how changing the treatment of NOL’s in Pennsylvania would benefit small businesses and improve the Commonwealth’s competitive standing;
  • Crafting various communications, including landing pages on our website and one-pagers that describe the reasons why Pennsylvania’s current NOL structure is detrimental and needs to change;
  • Explaining on television programs and podcasts the reasons why NOL reform is a top PA Chamber priority.

As lawmakers continue to work toward final consensus on the budget deal, we’re urging them to include NOL reform in the mix.


Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.