At a Glance...
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.
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.
