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Central Pa. banker warns that small business will be damaged by proposed lending rules

Proposed rules governing small business lending could threaten small business privacy and reduce access to capital.

That’s the warning Jonestown Bank & Trust Co. President & CEO Troy Peters sent to a congressional subcommittee Wednesday. Peters testified on behalf of the Pennsylvania Association of Community Bankers before the United States House of Representatives Small Business Committee and Subcommittee on Economic Growth, Tax, and Capital Access.

The subcommittee was chaired by U.S. Rep. Dan Meuser (R-PA Ninth District), who was named chairman last Feb. 3. Wednesday’s hearing focused on the Consumer Financial Protection Bureau’s (CFPB) proposed rule regulating data collection and reporting requirements of Section 1071 of the Dodd-Frank Act and the effects it will have on community banks’ ability to meet the unique needs of local small businesses.

Peters noted in his testimony that community banks are “different than large banking institutions that operate under a contrasting business model that focuses on large companies and loan sizes. We intimately know our markets and our customers.”

He added that small-business loans are not cookie cutter but are tailored to meet the specific business’ needs.

“Making application and loan data public as proposed will certainly be objectionable to my clients and is quite concerning,” Peters said. “By publicly displaying sensitive information like how much money they applied for, what the purpose of the loan is, and their revenue number, is not the kind of information they want or expect to be made public from a private transaction.”

Peters said such a disclosure could create a competitive disadvantage, such as revealing a planned business investment.

“Even worse, publishing information that a sole proprietor’s loan request was denied, in a small community like ours, is akin to posting a bounced check to the wall behind the store cash register,” said Peters. “The public humiliation shouts ‘Don’t do business with this person, they’re a deadbeat!’ I feel like this rule … will not be in the best interest of my clients and the communities that we serve.”

Meuser said that as community banks are vital to the state’s small businesses, he was pleased to have had the opportunity to invite a member of the Pennsylvania Association of Community Bankers to testify before his House Small Business subcommittee.

“I will continue to fight for community banks, and I appreciate Mr. Peters of Jonestown Bank & Trust expressing his concerns about the CFPB’s proposed rule on new data collection,” Meuser said. “I greatly valued his insight, as did the entire committee.

“We cannot allow burdensome federal regulations and mandates to harm banks that play such an important role in providing access to capital and supporting Pennsylvania’s small businesses.”

Pennsylvania’s gas tax to jump 3.5 cents in 2023

For Pennsylvania drivers, gas at the pump may soon cost more, thanks to a 2013 state law enacted to fund road and bridge improvements.

The commonwealth’s gas tax is scheduled to rise 3.5 cents in 2023, an increase levied on wholesalers that will likely be passed on consumers.

From the current 57.6 cents per gallon, the tax will rise to 61.1 cents per gallon next year, according to a notice in the Pennsylvania Bulletin.

Meanwhile, the tax on diesel fuel is set to climb from 74.1 cents per gallon to to 78.5 cents per gallon.

Pennsylvania’s gas tax is already one of the highest in the nation, ranking in the top three.

Paula Wolf is a freelance writer

State collects $2.9 million in general fund revenue for August

Pennsylvania collected $2.9 billion in general fund revenue last month, which was $63.8 million – or 2.3% – more than anticipated, the Department of Revenue reported Thursday.

Fiscal year to date, $5.6 billion has gone into general fund coffers. That’s $60.4 million, or 1.1%, above estimate.

More specifically:

· Sales tax receipts totaled $1.2 billion for August, $45.5 million above estimate. Year-to-date sales tax collections are $2.4 billion, which is 1.9% more than anticipated.

· Personal income tax revenue last month was $1.2 billion, $6.4 million below estimate. Year-to-date collections are 0.3 percent below estimate.

· August corporation tax revenue of $111.3 million was $1.8 million below estimate. Year-to-date corporation tax collections total $285.8 million, which is $5.1 million below estimate.

· Inheritance tax revenue last month was $116.7 million, or $3.3 million below estimate. Year to date, collections are $3.3 million below estimate.

· Realty transfer tax revenue was $88.8 million for August, $18.1 million above estimate, bringing the fiscal-year total to $123.2 million, which is 17.3% more than anticipated.

Other general fund tax revenue – including cigarette, malt beverage, liquor and gaming taxes – was $161 million for the month. That’s $6.3 million below estimate and brings the year-to-date total to $264.7 million, or 2.4% below estimate.

Non-tax revenue totaled $35 million for the month, or $18.1 million above estimate. The year-to-date total of $77.5 million is 30.5% more than expected.

Beyond general fund collections, the motor license fund collected $239.7 million in August, $25.3 million below estimate. Fiscal year-to-date revenues for the fund – which include the commonly known gas and diesel taxes, as well as other license, fine and fee revenues – are $480.6 million, or 4.9% below estimate.

Paula Wolf is a freelance writer

Through May, state’s general fund revenue sets record pace

With the May totals now in, Pennsylvania has collected a record $43.9 billion in general fund revenue for the first 11 months of the current fiscal year, Gov. Tom Wolf announced
Wednesday.

The $3.2 billion in general fund revenue that came into the state’s coffers last month was $402.4 million, or 14.2%, over estimate. Year-to-date general fund collections are 12.5% above
estimate.

Here are more May numbers from the release:

• Sales tax receipts were $1.2 billion, or $129.1 million above estimate.

• Personal income tax revenue was $1.1 billion, or $126.9 million more than expected.

• The corporation tax revenue totaled $510.9 million, or $129.5 million more than
anticipated.

• Inheritance tax revenue was $132.3 million, or $15.6 million above estimate.

• Realty transfer tax revenue was $69.3 million, or $13.9 million more than expected.

• Other general fund tax revenue, including cigarette, malt beverage, liquor and gaming taxes, totaled $176.3 million, or $3.1 million less than anticipated.
• Non-tax revenue was $29.7 million, or $9.4 million below estimate.

Outside general fund collections, motor license fund collections – which include gas and diesel taxes, as well as other license, fine and fee revenues – were $301.1 million in May, or $10.7
million more than expected.

Also, the state’s rainy day fund, a separate account to protect Pennsylvania against emergencies, now contains a record $2.8 billion.

“We have the money in the bank to pay for the historic investment I want to make in K-12 education, as well as the corporate net income tax cut and reforms I have proposed to bolster
Pennsylvania businesses, and still have $1.8 billion left over,” Wolf said in the release. “At a time when Pennsylvanians are hurting and state government is not, there is no excuse not to
use this huge pot of money to improve education, lower costs for taxpayers, and build a stronger economy.”

Paula Wolf is a freelance writer.

Central Pa., Lehigh Valley businesses get KIZ tax credits

Gov. Tom Wolf announced Thursday the approval of $14 million in 2021 Keystone Innovation Zone tax credits for 197 early-stage technology companies, including 10 in central Pennsylvania and the Lehigh Valley.

In Southside Bethlehem KIZ, Soltech Solutions LLC, $100,000 and $50,326; Almas Foods International, $88,569; Paro AI Inc., $100,000; UBMe Inc., $2,824; Seven Sirens Brewing Co., $100,000; and Optamo LLC, $14,895, received tax credits.

In the Northwest Lancaster City KIZ, tax credits went to Triode Media Group Ltd., $100,000; Creative Coding Group Inc., $9,074; and VIZpin Inc., $95,826, while ReturnLogic Inc. in the York County KIZ got $100,000 in tax credits.

The Keystone Innovation Zone program provides tax credits for companies that have been operating for less than eight years, have increased gross revenue over the previous year, are located in a KIZ, and are within a targeted industry sector such as information technology or advanced manufacturing/diversified materials, a release explained.

The program provides young companies with working capital to meet critical needs, whether that’s capital expenditures, workforce expansion, operational expenses or making these businesses more attractive to investors.

Senators will propose tax credits bill to address labor shortage

To address the persistent labor shortage in Pennsylvania, state Sens. Ryan Aument and John Yudichak announced that they will soon introduce a bill to create a Small Business Workforce Tax Credit.

Aument, whose district is in Lancaster County, and Yurdichak, who serves Carbon and Luzerne counties, made their intentions known in a Senate co-sponsorship memorandum dated Feb. 10.

The aim of the tax credit, they explained, is to incentivize hiring by small businesses for “the purpose of successfully drawing our citizenry back to work.”

Under the proposed legislation, small businesses will reduce the amount of state taxes they owe if they’re able to boost employment numbers compared to the year before.

They would qualify for a tax credit if they had 50 or fewer employees as of Dec. 31, 2019, and experienced at least a 25% decrease in income tax gross receipts from the second quarter of 2019 to the second quarter of 2020.

The memorandum, addressed to Aument and Yudichak’s fellow senators, asks their colleagues to co-sponsor the bill.

It noted that 50% of restaurant operators in the full-service, quick service and fast-casual segments expect recruiting and keeping employees to be their major challenge this year, according to the National Restaurant Association.

PA House approves bill to increase allotted deductibles for small businesses

Tax reform legislation passed by the house on Tuesday would allow Pennsylvania’s small businesses to take full deductions on qualifying equipment up to $1.05 million on state personal income tax.

House Bill 333, introduced in the House by Eric Nelson, R-Westmoreland County, was approved on Tuesday by a 125-75 vote and is now headed to the Senate.

The bill amends Section 179 of the Federal Tax Code, which allows owners of a pass-through business to take a deduction for the full purchase price of qualifying equipment.

Currently, those subject to state corporate net income tax can take a full deduction up to $1 million. Those subject to the state personal income tax, however, can only take a deduction up to $25,000.

House Bill 333 increases that deduction during the current year from $25,000 to $1.05 million, consistent with the federal limit.

If passed in the Senate and signed by Gov. Tom Wolf, the bill would help provide relief for struggling businesses, allowing them to create more jobs across the state, Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry, said in a statement on Wednesday.

“The Commonwealth needs to be increasingly competitive, with both jobs and capital. Companies and investors have choices – both globally and among the states – on where to place their investments and we want businesses to remain here, invest here and grow here,” said Barr. “House Bill 333 is a key component of the Chamber’s Propel PA Forward initiative which focuses on policies that will improve the state’s business climate to create an equality of opportunity for every resident. We applaud the PA House for passing this bill with bipartisan support.”

Northampton County Hotel Tax Grant Program accepting applications

Lamont McClure and the Department of Community and Economic Development (DCED) announced that applications for the 2021 Northampton County Hotel Tax Grant Program, which will enhance tourism and community development, will be accepted today through August 20.

Applicants must either be a federally registered non-profit entity, 501(c)(3) or 501(c)(4), or a municipal entity located within Northampton County, McClure, county executive said. Eligible projects will enhance tourism and/or promote community development within Northampton County and must be completed within 14 months of the grant award.

Hotel Tax Grants are awarded through a competitive process and distributed at the discretion of the County Council, advised by the County Executive who receives recommendations from the Hotel Tax Review Committee. Grant awards are expected to be announced in September.

Interested organizations must submit a Hotel Tax Funding Request using the application form available by visiting the DCED page on the Northampton County website: https://www.northamptoncounty.org/CMTYECDV/Pages/Apply-for-Funding.aspx

Applicants are required to register with the Northampton County DCED’s County Relationship Manager (CRM) and submit electronic applications through the web. https://web.northamptoncounty.org/DCEDForms/views/Login.html

The application process opens Wednesday, July 14, 2021 at 8:30 A.M. The deadline is set for Friday, August 20, 2021 at 4:00 P.M.

Revenue department extends personal income tax return deadline

Taxpayers in the commonwealth have an extra 90 days to file their 2019 Pennsylvania personal income tax returns, as the deadline has been extended from April 15 to July 15.

Penalties and interest on 2019 personal income tax payments have also been waived through this new deadline, according to a recent announcement from the Pennsylvania Department of Revenue.

State revenue department officials announced changes last week to the due date for filing personal income tax returns amid Gov. Tom Wolf’s mandated closure of non-life-sustaining business operations to prevent the spread of the coronavirus. The extension falls in line with the Internal Revenue Service’s (IRS’s) extension of the federal filing of tax returns to July 15.

“This is a necessary step that will give Pennsylvania taxpayers extra time to file their returns and make tax payments during a difficult time for everyone,” said state Revenue Secretary Dan Hassell. “Particularly for those who plan to meet with a tax professional to prepare their returns, the new deadline will help everyone follow the governor’s guidance to stay at home as we all work to prevent the spread of the virus.”

State revenue department officials are still urging taxpayers who are able to file their returns electronically to do so, which will enable the department to continue to process returns while commonwealth offices are closed.

Tax dispute weighs on supporters of Jim Thorpe’s business, tourism industry

As a tax dispute continues to play out between the Lehigh Gorge Scenic Railway and the borough of Jim Thorpe, the borough’s business community and its tourism agency hope for an equitable solution.

A railway company announced its plan to terminate its relationship with the borough of Jim Thorpe by the end of November because of a tax dispute. (File Photo) –

Last week, the railway announced its plan to terminate its relationship with the borough by the end of November because of a tax dispute. The railroad company, owned by Reading, Blue Mountain and Northern Railroad of Port Clinton, offers a round-trip service that carries passengers from a station in Jim Thorpe to the borough’s Lehigh Gorge State Park along the Lehigh River and into Old Penn Haven in Lehigh Township.

The borough views that service as subject to an amusement tax and wants to charge the owner.

The borough wants to impose a 5 percent amusement tax on the railroad owner and 2.5 percent tax for the school district.

In the resolution, the Jim Thorpe Tourism Agency said it hopes all parties can work together for a solution that would be fair to all involved. The agency said the excursion train has run for 15 years out of the Jim Thorpe station and introduces many visitors to the borough and its natural surroundings. The train runs each day, all summer long and typically draws large crowds. In addition, the shops and eateries in Jim Thorpe’s downtown thrive in large part because of the business driven by the railroad, the agency said.

The ever-increasing number of passengers has translated to steady, reliable revenue for the borough’s businesses, according to the agency.

Danny Behan, co-owner of Molly Maguire’s Pub in Jim Thorpe, said his restaurant sits facing the train. If it leaves, it could be a big loss, he said. When the train is packed, so is his restaurant.

“It would just be a catastrophic loss, not only to me but to every other business owner so it would be a great big loss,” Behan said. “Hopefully, they can get to some agreement.”

In addition, the railroad owner cancelled the Santa rides scheduled in Jim Thorpe for December, Behan added.

On Wednesday, Behan hosted a meeting at his restaurant regarding the issue and attracted 31 businesses who showed up to express their concerns.

In an announcement regarding its new train schedule, Reading & Northern Railroad said it received overwhelming support from people throughout the region after it said it would terminate its relationship with Jim Thorpe because of lack of support from borough management.

As it moves forward with its 2020 plans, the company said it would be reaching out to many communities to see how it can bring the joy of railroading to as many people as possible.

The railroad company also runs trains to stations in several areas of eastern Pennsylvania, including Schuylkill Haven, Pottsville and Reading.

Mayor Michael Sofranko and Andy Muller Jr., CEO/owner of the railroad company, did not immediately return requests for comment.

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