For Immediate Release
November 10, 2021
HARRISBURG - HARRISBURG - Pennsylvania Chamber of Business and Industry President and CEO Gene Barr issued the following statement after the Senate’s passage of Senate Bill 347, relating to “Like-Kind Exchanges” on Tuesday and Senate Bill 349, relating to Section 179 Expense Deductions last month. Both bills are part of a Small Business Tax Reform package aimed at removing state tax barriers for small businesses.
“This legislation provides much-needed relief for struggling businesses, allowing them to invest back in the Commonwealth and create more jobs,” Barr said. “Both are key components of the Chamber’s ‘Bringing PA Back’ initiative, a member-driven recovery effort to advocate for policies that will rebuild Pennsylvania’s economy in a manner that provides opportunity for all.”
Under federal tax law, a "like-kind" exchange under Internal Revenue Service Code Section 1031 allows for tax-deferral when property is exchanged for similar property. Pennsylvania is currently the only state in the nation that does not allow for a similar deferral at the state level. Senate Bill 347 would align Pennsylvania law to federal law by allowing for similar treatment at the state level.
Senate Bill 349 would align Pennsylvania law with Section 179 of the federal tax code. Section 179 allows owners of pass-through businesses to take a tax deduction for the full purchase price of qualifying equipment. 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 $1.05 million, or consistent with the federal limit.
“The Commonwealth needs to be increasingly competitive, for both jobs and capital,” Barr said. "Companies and investors have choices, both globally and among the states, on where to place their investments and we want businesses to remain here, invest here and grow here. We applaud the PA Senate for passing these crucial pieces of legislation.”
The Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its statewide membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.