PRINTER'S NO. 49

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

60

Session of

2023

INTRODUCED BY MERCURI, SCHLEGEL CULVER, JAMES, JOZWIAK, PICKETT,

ROWE, SCIALABBA AND ZIMMERMAN, MARCH 7, 2023

REFERRED TO COMMITTEE ON FINANCE, MARCH 7, 2023

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," in corporate net income tax, further providing

for definitions.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 401(3)1(q), (r) and (s) of the act of

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

(3) "Taxable income." 1. * * *

(q) [Notwithstanding] The following apply:

(1) For qualified property placed in service prior to

January 1, 2021, notwithstanding paragraph (a), taxable income

shall include the amount of the deduction for depreciation of

qualified property claimed and allowable under [section 168(k)

of the Internal Revenue Code of 1986 (26 U.S.C. § 168(k))] 26

U.S.C. § 168(k) (relating to accelerated cost recovery system).

(2) For qualified property placed in service after December

31, 2020, for which depreciation was claimed and allowable under

26 U.S.C. § 168(k), taxable income shall include the deduction

income in accordance with paragraph (q), an additional deduction

for depreciation of the qualified property shall be allowed from

taxable income until the total amount included as taxable income

under paragraph (q) has been claimed. The additional deduction

shall be equal to the product of taking three sevenths of the

amount of the deduction for depreciation of the qualified

property allowable under [section 167 of the Internal Revenue

Code of 1986 (26 U.S.C. § 167)] 26 U.S.C. § 167 (relating to

depreciation), not including the amount of the deduction for

depreciation of the qualified property claimed and allowable

of qualified property was included in taxable income in

accordance with paragraph (q), an additional deduction for

depreciation of the qualified property shall be allowed from

taxable income until the total amount included as taxable income

under paragraph (q) has been claimed. The additional deduction

shall be equal to the depreciation on the qualified property for

the taxable year as determined in accordance with [sections 167

and 168 of the Internal Revenue Code of 1986 (26 U.S.C. §§ 167

and 168)] 26 U.S.C. §§ 167 and 168, except that [section 168(k)

of the Internal Revenue Code of 1986 (26 U.S.C. § 168(k))] 26

on the property for the taxable year as determined in accordance

with 26 U.S.C. §§ 167 and 168, except that 26 U.S.C. § 168(k)

shall not apply.

(B) Except as provided under paragraph (4), the adjusted

basis of qualified property for purposes of determining the

depreciation deduction under this paragraph shall reflect any

adjustments required to be made in determining the adjusted

basis of the property for Federal income tax purposes.

(4) For property placed in service in taxable years

beginning after December 31, 2020, if a taxpayer is required to

under this article unless the taxpayer is entitled to claim a

deduction for depreciation.

(s) The following apply:

(1) For property placed in service before September 28,

2017, an additional deduction shall be allowed from taxable

income in the earlier of the taxable year in which qualified

property is fully depreciated for Federal income tax purposes,

or is sold or otherwise disposed of by a taxpayer to the extent

the amount of depreciation claimed under [section 168(k) of the

Internal Revenue Code of 1986 (26 U.S.C. § 168(k))] 26 U.S.C. §

depreciation was included as taxable income under paragraph (q),

an additional deduction shall be allowed from taxable income to

the extent the amount of depreciation claimed under [section

168(k) of the Internal Revenue Code of 1986 (26 U.S.C. §

168(k))] 26 U.S.C. § 168(k) on the qualified property has not

been recovered through the additional deductions provided by

paragraph (r)(2).

(3) The following apply:

(A) For property placed in service in a taxable year

beginning after December 31, 2020, with respect to qualified

income for depreciation for an amount equal to the aggregate

depreciation claimed on the property for Federal income tax

purposes less the aggregate amount of depreciation claimed as a

deduction under paragraph (r)(3).

(B) The additional deduction under subparagraph (A) shall

not:

(I) Include any depreciation attributable to a period in

which the taxpayer was not subject to the tax imposed under this

article.

(II) Reduce the adjusted basis of the qualified property for

year by a taxpayer and for which a gain or loss is recognized

for Federal income tax purposes on a single company basis, a

taxpayer is entitled to an additional deduction from taxable

income for depreciation that has not been claimed for purposes

of the tax imposed under this article on the adjustment for

depreciation provided under paragraph (r)(4).

(B) The additional deduction under subparagraph (A) shall

not:

(i) Include any depreciation attributable to a period in

which the taxpayer was not subject to the tax imposed under this

reduction for purposes of claiming a Federal tax credit.

* * *

of the act shall apply to taxable years beginning after December

31, 2020.

Section 3. This act shall take effect immediately.