PA SB1031

Establishes the Net Operating Loss Transfer Program allowing eligible biotechnology and technology businesses operating in Pennsylvania for no more than 7 years to sell their net operating losses to other corporations in exchange for funds to be used on allowable business expenditures

Selling taxpayers face a lifetime cap of $20,000,000 in transferable net losses, with an annual limit of $5,000,000 per business; the program has an overall annual cap of $200,000,000 in transferable net losses statewide

Purchasing taxpayers must pay at least 80% of the tax benefit value to acquire the losses, which they can then apply against their corporate net income tax liability

Eligible businesses must have proprietary intellectual property, use Pennsylvania-developed patents, provide agricultural technology, or generate at least 50% of revenue in the Commonwealth, and must have no positive net operating income for the past two years

Applications require a $3,500 nonrefundable fee and must be submitted by June 30 each year; selling taxpayers who fail to use exchange funds properly or cease Pennsylvania operations within five years must forfeit and remit the funds on a prorated basis