HARRISBURG – Legislation sponsored by Senator Bob Mensch (R-24) advanced out of the Pennsylvania Senate’s Finance Committee today. Senate Bill 288 would expand the 21st Century Manufacturing Innovation and Reinvestment Deduction Act. The bill now heads to the Senate floor for a vote.
The current Manufacturing Innovation and Reinvestments Deduction program in the Tax Code allows for manufacturers that make capital investments of more than $60 million to receive a pro-rated deduction against its taxable income for a period of ten years upon the completion of the capital project. The Tax Code currently has two tiers, (1) $60-100 million and (2) investments greater than $100 million. The deduction is not a tax credit, is non-deferrable, not able to be transferred to another entity, and cannot be used to reduce the manufacturer’s tax liability by more than 50%.
“Large manufacturers throughout the state, several of them in my area, employ thousands of people and have utilized this program to make investments well over $100 million to make capital improvements and continue to invest in the Pennsylvania workforce,” Mensch said. “I believe the program can also be utilized in incentivizing smaller manufacturers to expand in Pennsylvania and grow their workforce.”
This bill adds two tiers below the current program, one from $1-10 million and one from $10 million to $60 million. The bill also clarifies when the deduction takes place, after the allocation and apportionment of income.
This is pro-growth legislation which rewards companies who invest in their facilities and their workforce without the normal hurdles and state-revenue implications from other programs like tax credits.
“Seeing how this has already been so successful for larger companies, this is a win-win for small manufacturers, their workers, and the entire economic future of Pennsylvania.”
Watch Senator Mensch’s floor remarks here.
For more information on Senator Mensch’s legislation, visit www.senatormensch.com. State updates can also be found on Senator Mensch’s Facebook at facebook.com/PASenatorBobMensch/ or Twitter @SenatorMensch.
CONTACT: Madison Scarfaro email@example.com (215) 541-2388