Senator Regola introduces two tax cut measures

Legislation would promote energy savings

State Senator Bob Regola (R-39) today introduced two bills during the General Assembly’s Special Session on Energy that would provide tax breaks for individuals and businesses that take steps to improve their energy efficiency and reduce pollution.

“These bills are intended to reward consumers and companies that take steps to invest in new technology that result in energy savings and greater efficiency,” said Sen. Regola. “This is a win-win situation for consumers and companies that will receive tax breaks, while we improve and invest in the environment.”

Sen. Regola noted that the development of alternate energy sources and related technology is hampered by current laws limiting the ability to timely deduct from corporate tax liability for net losses particularly for new or small businesses.  As such, Senator Regola’s first bill -- Senate Bill 43 of the Special Session -- would increase the deductibility of a net operating loss (NOL) from 12.5 percent to 50 percent of taxable income, up from a maximum of $3 million to $12 million.

“Pennsylvania is one of only two states that prohibit companies from carrying forward the full extent of their net operating losses to offset future income,” said Regola. “This penalizes companies by significantly increasing their tax rates.  By increasing the NOL cap, we provide an incentive for businesses to invest in new and improved technology to achieve energy savings.”

The second bill, Senate Bill 44 of the Special Session, would establish energy efficiency and pollution prevention tax credits for businesses and individuals.  The tax credit would be for up to 50 percent of the cost associated with the acquisition or upgrade of equipment which results in at least a 10 percent increase in energy efficiency or in pollution reduction. 

“My bill would provide businesses with a credit up to 100 percent of its gross income and a carryover provision would allow the credit to be carried forward for up to 20 years,” said Regola.  “The real innovation in my bill is that individuals would also be rewarded for implementing similar energy saving and pollution reduction measures.  They would be able to take the credit, at the same rate and under the same criteria as businesses, for up to 50 percent of the cost to purchase and install equipment that results in a 10 percent increase in energy efficiency, or in pollution prevention.”

Both bills will be referred to the Special Session’s Committee on Legislation for its consideration.

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Contact:  Nate Silcox (717) 787-6063