Pennsylvania’s Startup Penalty

What is It:

  • For many businesses, it takes a while to turn a profit. In the first few years, it’s common to operate at a loss.
  • While most other states allow struggling businesses to “carryforward” those losses (80% or more) to the next tax year, Pennsylvania is behind 48 other states, only allowing a 40% carryforward.
  • This means if a business operates at a massive loss one year, yet barely makes a profit the next, they are slammed with unaffordable (and unfair) taxes.

Why it Matters:

The Fix:

  • Senate Bill 346 would eliminate Pennsylvania’s Startup Penalty by bringing Pennsylvania in line with the federal government and the 48 other states that allow struggling businesses to carryforward 80% of their losses.
  • This will ultimately keep struggling businesses afloat long enough to make it and create an atmosphere of economic opportunity for all.

The Latest:

  • 73 Chambers of Commerce Urge Elimination of PA’s Start-up Penalty
    Read the letter HERE
  • The PA National Federation of Independent Businesses (NFIB) hosted a press conference April 8, calling for an end to the PA Start-up Penalty, emphasizing that it is an “obstruction to prosperity” and it “thwarts entrepreneurship.”

Watch a portion of the NFIB press conference below.

Infographic: The U.S. States Losing & Gaining Population | Statista You will find more infographics at Statista
Back to Top