– Last night, Gov. Tom Wolf signed into law a companion bill by Sen. Michelle Brooks (R-Crawford/Erie/Mercer/Warren) containing the identical language to Rep. Frank Ryan’s (R-Lebanon) House Bill 2017
. The legislative language reverses the provisions of Bulletin 2017-02 and allows Pennsylvania businesses the opportunity to take advantage of this important provision, Ryan said.
The reason Ryan introduced this legislation is that the U.S. tax landscape has undergone significant changes with the recent enactment by Congress and the President of sweeping legislation overhauling our federal tax system.
“Under the new law, bonus depreciation doubles from 50 to 100 percent for property purchased between September 27, 2017, and January 1, 2023 (or January 1, 2024, for a small category of property),” Ryan said. “After that date, at 20 percent phase-down takes effect. Also, bonus depreciation amount is now permitted for the purchase of used property, in addition to new property. This is a common tax plan strategy used by virtually all businesses at some point in time, both large and small. But not in Pennsylvania.”
That’s because businesses looking to expand in Pennsylvania will not be able to take advantage of this provision. On Dec. 22, the Pennsylvania Department of Revenue issued Corporate Tax Bulletin 2017-02. Under these new provisions, in the best case scenario, a taxpayer gets no deduction until the asset is sold or disposed of. If the taxpayer has equipment that may be used indefinitely, it could effectively get no depreciation write-off in Pennsylvania.
“The new tax law has already begun to stimulate economic growth and development in many other states,” Ryan said. “This increased economic activity is the very reason we were able to pass a budget this year with no tax hikes and putting extra revenues into our Rainy Day Fund. By taking this action now, we can maximize its positive effects for employment and wage increases for Pennsylvania.”
Representative Frank Ryan
101st Legislative District
Pennsylvania House of Representatives
Media Contact: Charles Lardner