Pennsylvania Moving Toward Full Tax Deduction for Capital Purchases

A provision of the budget package making its way through Pennsylvania's Legislature would put the state in line with a federal tax change letting corporations immediately expense 100 percent of a qualifying capital purchase.

Lawmakers say Pennsylvania is perhaps the only state that isn't allowing the deduction. A House Appropriations Committee analysis says allowing the deduction will create a $102 million tax break in the coming fiscal year that starts July 1.

But Rep. George Dunbar says the effect on state tax collections will eventually be revenue neutral. 

Lawmakers say the legislation would let corporations immediately deduct 100 percent of the cost of new and used capital investments, such as buildings and equipment.

The temporary change would last for five years through 2022 before phasing down over five years.

Copyright AP - Associated Press
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