Celebrating – and Working to Grow – Small Business in Pennsylvania

Last week (April 30 – May 6) was National Small Business Week, a celebration of the critical contributions of America’s entrepreneurs and small business owners. The PA Chamber proudly counts thousands of these employers among our nearly 10,000 members and we thank them for the financial and cultural ways they enrich our communities.

One of the best ways to support small businesses is to get out and shop! Whether online or in person, purchasing goods and services from small businesses ensures that they can continue to operate, grow, and thrive. Another way is to support policies and elected officials who value the pro-growth legislation that will foster economic growth and job creation and improve Pennsylvania’s competitive standing among other states.

The PA Chamber’s mission is to build a business climate that encourages business leaders to locate, build, and expand their businesses here. We’re proud to have made critical strides toward that goal last session with the enactment of Act 53, a monumental tax reform package that included long sought-after tax reforms. Some of those reforms specifically benefit small to mid-sized employers, including:

  • Like-Kind Exchanges: This provision lets employers dispose of one asset and acquire another without generating a tax liability from the sale of the first asset. Before this was enacted, Pennsylvania was the only state in the country that didn’t allow for this tax deferral at the state level.
  • Tax Deduction for Qualifying Equipment Purchases: Section 179 of the federal Tax Code allows owners of pass-through businesses to take a tax deduction for the total purchase price of qualifying equipment. Pennsylvania law limited deductions for businesses subject to the state personal income tax. This measure provides equity for small businesses, increasing the current deduction limit to be consistent with the federal limit.


Another victory we secured last session helped save nearly 3,000 small businesses from unfair unemployment compensation rate hikes. Working with our local chamber partners and lawmakers, we helped craft, pass, and enact a legislative fix to a looming UC increase at the end of 2022. The legislation, which became law in only nine legislative days upon introduction, exempted businesses who were forced to shut down during the pandemic from having to pay a much higher UC tax rate, helping them put their hard-earned dollars toward investing in their companies and hiring new workers.

While these are important steps in the right direction, our work isn’t done! This session, we’re zeroed in on legislation that would improve the treatment of Net Operating Losses in Pennsylvania. Right now, the Commonwealth is one of only two states that cap NOL deductions below the federal limit – meaning the federal government allows NOL deductions at 80 percent of income; and PA caps a business’s NOL at just HALF of that (40 percent) of taxable income. This is a red flag to employers and a major burden for the small businesses that constitute the backbones of their local economies. If you were a small employer that had the option between investing in a state that capped the NOL deduction at half the federal standard or one that had no cap at all (as 25 U.S. states currently do), where would YOU choose to do business?

We’re telling state lawmakers that improving the treatment of NOLs will promote a fairer tax system by reducing additional tax burdens on entrepreneurial risk, cyclical businesses, or those more susceptible to economic downturns. Pennsylvania is a national outlier in its antiquated treatment of losses. Fixing this flaw will promote future growth and make the Keystone State far more attractive to employers and entrepreneurs – a win-win for small businesses, our communities, and our economy!

Lastly, we’re working to ensure that small businesses’ workforce needs are being met by advocating to reform our state’s workforce development programs; strengthen job training opportunities; help the private sector find and offer childcare opportunities; and fill in-demand jobs to address the workforce shortage. You can read more about our multi-faceted workforce strategy here.

America’s Top Small Business

In its celebration of National Small Business Week, the U.S. Chamber proudly recognized the very best in American small businesses with a reimagining of its America’s Top Small Business Awards.

Employers who have demonstrated ingenuity, grit, and perseverance and operated for at least one year, have fewer than 250 employees, or gross revenues of less than $20 million for both 2021 and 2022 may apply to be recognized as “America’s Top Small Business” on or before Friday, July 7.

To learn more, visit this website. Good luck!