Reed Smith Client Alerts

Pennsylvania enacted legislation addressing the mechanics of its statutory “decoupling” from federal 100% bonus depreciation. This legislation is a direct response to the Department of Revenue’s announcement that it would delay all depreciation deductions on 100% bonus depreciation property—for Pennsylvania corporate net income tax purposes—until the year in which the property is disposed of.

Authors: Kyle O. Sollie Michael A. Jacobs Kenneth R. Levine Christine M. Hanhausen

Type: Client Alerts

On June 22, 2018––in advance of the budget deadline––the Pennsylvania Legislature passed its budget, which notably did not include a Tax Reform Code bill. However, the Legislature did include in its negotiations, and ultimately passed, legislation “fixing” the depreciation computation for federal 100%  bonus depreciation property—an expected $27.5 million cost to the Commonwealth over two years1 and a direct rebuke to the Department of Revenue’s policy announced back in December of delaying all depreciation on 100% bonus property until the year of disposal. On June 28, Governor Wolf signed this legislation into law as Act 72 of 2018.