House Finance Committee reports bill to create net operating loss exchange for PA startups

The House Finance Committee voted 24-2 to report House Bill 1129 as amended, which would establish a net operating loss exchange allowing eligible technology and biotechnology startups to sell accrued net operating losses to purchasing taxpayers in exchange for cash.

Supporters say the program would give early-stage companies immediate capital and help keep jobs and intellectual property in Pennsylvania. "House Bill 11 29 establishes a net operating loss exchange program, and it would allow technology and biotechnology startups to be eligible businesses that could sell their net losses in exchange for financial assistance to keep that startup business running," said Shannon Snell, the committee's senior research analyst.

Under the amendment approved by the committee (House amendment 1437), an eligible business must have operated in Pennsylvania for no more than seven years, must file a Pennsylvania corporate net income tax return, and must have at least 30% of its U.S. employees based in Pennsylvania (up from 15% in the underlying…