2022 Pennsylvania Consolidated & Unconsolidated Statutes
Act 103 - FIRST CLASS CITY BUSINESS TAX REFORM ACT - DEFINITIONS

Session of 2022

No. 2022-103

HB 324

AN ACT

Amending the act of May 30, 1984 (P.L.345, No.69), entitled "An act to provide revenue for cities of the first class by authorizing and imposing a tax on persons engaging in certain businesses, professions, occupations, trades, vocations and commercial activities therein; providing for its levy and collection at the option of cities of the first class; conferring and imposing powers and duties on cities of the first class and the collector of city taxes in such cities; and prescribing penalties," further providing for definitions.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1.  The definition of "net operating loss" in section 2 of the act of May 30, 1984 (P.L.345, No.69), known as the First Class City Business Tax Reform Act, is amended to read:

Section 2.  Definitions.

The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

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"Net operating loss."

(1)  In the case of a person conducting its entire business within a city of the first class, any net losses incurred from the operation of its business as returned to and ascertained by the Federal Government prior to giving effect to the exclusion for dividends received and net operating loss subject to the same adjustments made applicable to net income in this section. In the case of a person conducting its business both within and without a city of the first class, any net operating loss incurred which is carried forward to another tax year shall be allocated and apportioned in the same manner as net income prior to its being deducted from apportioned and allocated net income in the subsequent tax year. Apportionment and allocation of net operating loss shall be based upon allocation and apportionment factors applicable to the year in which the net operating loss was incurred.

(2)  Net operating losses incurred in another tax period may be carried over for [three] 20 tax years following the year in which it was incurred. The earliest net loss shall be carried over to the earliest taxable year to which it may be carried.

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Section 2.  The amendment of the definition of "net operating loss" in section 2 of the act shall apply to net operating losses incurred in the year of enactment of this act and each tax year thereafter.

Section 3.  This act shall take effect immediately.

APPROVED--The 3rd day of November, A.D. 2022.

TOM WOLF