HB 333 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for classes of income.

PRIOR PRINTER'S NO.

1160 THEPRINTER'S GENERALNO. ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

2656 THE GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

NELSON, COX, GROVE, KAUFFMAN, STAMBAUGH, KEEFER,PICKETT, ROWE,SMITH, WHEELANDGLEIM, ANDSTAATS, OBERLANDER,DUNBAR, APRILR. 7, 2021 THOMAS, REFERRED TO COMMITTEE ON FINANCE, APRIL 7, 2021 AN ACT Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An act relating to tax reform and State taxation by codifying and enumerating certain subjects of taxation and imposing taxes thereon;

MACKENZIE, THOMAS, KEEFER, ROWE, WHEELAND, OBERLANDER, MERCURI AND RYAN, APRIL 7, 2021 AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, JANUARY 25, 2022 AN ACT Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An and enumerating certain subjects of taxation and imposingg taxes thereon;

conferring powers and imposing duties upon the Department of Revenue, certain employers, fiduciaries, individuals, persons, corporations penalties,"and inother personalentities; income tax, further providing for classes of income.

prescribing crimes, offenses and penalties," in personal income tax, further providing for classes of income.

Section 303(a.3) of the act of March 4, 1971 <-- (P.L.6, No.2), known as the Tax Reform Code of 1971, is amended to read:

SECTION 1.

SECTION 303(A.3) OF THE ACT OF MARCH 4, 1971 <-- (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, IS AMENDED AND THE SECTION IS AMENDED BY ADDING A SUBSECTION TO READ:

Classes of Income.--* * * (a.3) The cost of property commonly referred to as Section <-- 179 Property may be treated as a deductible expense only to the extent allowable under [the version of section 179 of the Internal Revenue Code in effect at the time the property is placed in service or under] section 179 of the Internal Revenue Code of 1986 (26 U.S.C.

* * * [(A.3) THE COST OF PROPERTY COMMONLY REFERRED TO AS SECTION <-- 179 PROPERTY MAY BE TREATED AS A DEDUCTIBLE EXPENSE ONLY TO THE EXTENT ALLOWABLE UNDER THE VERSION OF SECTION 179 OF THE INTERNAL REVENUE CODE IN EFFECT AT THE TIME THE PROPERTY IS PLACED IN SERVICE OR UNDER SECTION 179 OF THE INTERNAL REVENUE CODE OF 1986 (26 U.S.C.

§ 179), WHICHEVER IS EARLIER.

THE BASIS OF SECTION 179 PROPERTY SHALL BE REDUCED, BUT NOT BELOW ZERO, FOR COSTS TREATED AS A DEDUCTIBLE EXPENSE.

THE AMOUNT OF THE REDUCTION SHALL BE THE AMOUNT DEDUCTED ON A RETURN AND NOT DISALLOWED, REGARDLESS OF WHETHER THE DEDUCTION RESULTS IN A REDUCTION OF INCOME.] * * * (A.11) THE COST OF PROPERTY COMMONLY REFERRED TO AS SECTION 179 PROPERTY MAY BE TREATED AS A DEDUCTIBLE EXPENSE ONLY TO THE EXTENT ALLOWABLE UNDER SECTION 179 OF THE INTERNAL REVENUE CODE OF 1986 (26 U.S.C.

§ 179) IN EFFECT ON THE EFFECTIVE DATE OF THIS SUBSECTION.

THE BASIS OF SECTION 179 PROPERTY SHALL BE REDUCED, BUT NOT BELOW ZERO, FOR COSTS TREATED AS A DEDUCTIBLE EXPENSE.

THE AMOUNT OF THE REDUCTION SHALL BE THE AMOUNT 20210HB0333PN2656 - 2 - DEDUCTED ON A RETURN AND NOT DISALLOWED, REGARDLESS OF WHETHER THE DEDUCTION RESULTS IN A REDUCTION OF INCOME.

The amendment of section 303(a.3) of the THIS act <-- shall apply to property placed in service in tax years beginning after December 31, 2020.

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