Section 8045. Net income.
(a) Net income.--Notwithstanding the definition of "net income" in section 2 of the act of May 30, 1984 (P.L.345, No.69), known as the First Class City Business Tax Reform Act, for purposes of calculating net income to determine business income and receipts tax liability in a city of the first class, net income has the same meaning as taxable income under sections 216 and 217, with respect to the treatment of any of the following:
(1) Research and experimental expenditures under 26 U.S.C. § 59(e) (relating to other definitions and special rules), 174 (relating to amortization of research and experimental expenditures), 174A (relating to domestic research or experimental expenditures) or 481 (relating to adjustments required by changes in method of accounting).
(2) Expenses for qualified production property under 26 U.S.C. § 168(n) (relating to accelerated cost recovery system).
(3) Interest deductions under 26 U.S.C. § 163(j) (relating to interest).
(b) Taxable income.--For purposes of applying sections 216 and 217 under subsection (a), a reference to taxable income shall be deemed to be a reference to net income to determine business income and receipts tax liability in a city of the first class.
(c) Application of modification.--A modification after the effective date of this subsection to the calculation of taxable income under Article IV of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, that requires an addition, deduction, exclusion or other adjustment to account for a provision of 26 U.S.C. (relating to Internal Revenue Code) and to prevent a reduction in revenue to the Commonwealth, shall apply to the calculation of net income to determine business income and receipts tax liability in a city of the first class. For purposes of applying a modification under this subsection, a reference to taxable income shall be deemed to be a reference to net income to determine business income and receipts tax liability in a city of the first class.
(8045 added July 12, 2026, P.L.265, No.21)
Compiler's Note: See section 35(4) of Act 21 of 2026 in the appendix to this act for special provisions relating to applicability.