HB 217 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for classes of income.

PRINTER'S NO.   174

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 217
                                                  Session of
                                                    2025

     INTRODUCED BY KUTZ, HAMM, JAMES, KUZMA, MARCELL, KAUFFMAN,
        M. BROWN, HANBIDGE, CUTLER, GROVE, ROWE, GALLAGHER,
        SCIALABBA, KEPHART, M. JONES, TWARDZIK, STAMBAUGH, LAWRENCE,
        RYNCAVAGE, STRUZZI AND ZIMMERMAN, JANUARY 22, 2025

     REFERRED TO COMMITTEE ON FINANCE, JANUARY 22, 2025


                                     AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," in personal income tax, further providing for
11      classes of income.
12      The General Assembly of the Commonwealth of Pennsylvania
13   hereby enacts as follows:
14      Section 1.    Section 303(a)(2) of the act of March 4, 1971
15   (P.L.6, No.2), known as the Tax Reform Code of 1971, is amended
16   to read:
17      Section 303.    Classes of Income.--(a)     The classes of income
18   referred to above are as follows:
19      * * *
20      (2)     Net profits or net loss. The net income from the
21   operation of a business, profession, or other activity, after
 1   provision for all costs and expenses incurred in the conduct
 2   thereof, determined either on a cash or accrual basis in
 3   accordance with accepted accounting principles and practices but
 4   without deduction of taxes based on income. For purposes of
 5   calculating net income under this paragraph, to the extent a
 6   taxpayer properly deducts an amount under [section 195(b)(1)(A)
 7   of the Internal Revenue Code of 1986 (26 U.S.C. § 195(b)(1)(A))]
 8   26 U.S.C. § 195(b)(1)(A) (relating to start-up expenditures), as
 9   amended, and the regulations promulgated under [section 195(b)
10   (1)(A) of the Internal Revenue Code of 1986] 26 U.S.C. § 195(b)
11   (1)(A), the taxpayer shall be permitted a deduction in equal
12   amount in the same taxable year. There shall be permitted a
13   deduction from other classes of income equal to the net loss for
14   the tax year.
15      * * *
16      Section 2.   The amendment of section 303(a)(2) of the act
17   shall apply to tax years beginning after December 31, 2025.
18      Section 3.   This act shall take effect immediately.




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