HARRISBURG – The Senate Finance Committee passed two bills sponsored by Sen. Doug Mastriano (R-33) this week to benefit Pennsylvania’s small businesses.
Senate Bill 253 would abolish double taxation on small business partners. Currently, Pennsylvania resident business partners subject to pass-through entity taxes in other jurisdictions incur a double tax. Pass-through entities are businesses in which the profits pass through to the owners of the business and are taxed at the individual tax rate. Pass-through entities in Pennsylvania are required to pay the tax twice, once to the commonwealth and a second time to the other state associated with the business.
Pass-through entities are denied a credit, relieving them of the double taxation requirement, even though a similar credit is available to resident S corporation shareholders.
“Small businesses are the lifeblood of our communities and local economies. They deserve to be on a level playing field, especially because it would also benefit our economy,” Mastriano said. “It’s good for business, and it’s good for our people.”
View Mastriano’s comments on Senate Bill 253.
Senate Bill 396 would support the commonwealth’s small businesses and pass-through businesses by affording them the benefit of federal deductibility as an expense of the electing business. It would not change the amount of taxes paid.
“My bill would provide federal tax income benefits and put federal tax dollars back into the pockets of Pennsylvania’s small business owners that could be used for reinvestment and growth – creating more jobs for commonwealth residents,” Mastriano said.
Thirty-four states allow the work-around Mastriano’s bill proposes, including all of Pennsylvania’s neighboring states.
View Mastriano’s comments on Senate Bill 396.
Both bills move to the full Senate for consideration.
CONTACT: Don Beishl, 717-787-6701