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HB 179

An Act authorizing the provision or sale of Pennsylvania milk in Pennsylvania schools.

2025-2026 Regular Session Introduced by Amen Brown and 15 co-sponsors

Creates a state individual income tax deduction for labor organization membership dues, effective for tax years starting 2026, reducing taxable income for eligible workers.

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Bill Summary · HB 179

HB 179 — Labor Organization Membership Dues Tax Deductible

Status: Passed First Reading
Introduced: August 15, 2025
Subject areas: Taxation; Individual income; Employment; Membership; Organized labor

Main purpose

To create a state individual income tax deduction for amounts that taxpayers pay as membership dues to labor organizations. The bill is intended to reduce taxable income for workers who pay mandatory union or labor-organization dues.

Key provisions

  • Amends G.S. 105‑153.5(b) by adding a new subdivision (17) that permits a deduction for:
    • “The amount paid by the taxpayer during the taxable year as labor organization membership dues.”
    • It defines “labor organization membership dues” to include dues, fees, assessments, or other monies required as a condition of membership or participation in a labor organization (as defined in G.S. 168A‑3).
  • Effective date: applies to taxable years beginning on or after January 1, 2026.

Who is affected

  • Primary: Individual taxpayers in the state who pay mandatory membership dues (or required fees/assessments) to a labor organization that meets the statutory definition in G.S. 168A‑3.
  • Secondary: Labor organizations (unions) may see a small membership/retention effect if the deduction changes the after‑tax cost of membership; state tax administration (forms/filing systems) will need to accommodate the new deduction.
  • Not affected: Federal tax treatment is unchanged; this is a state individual income tax deduction only.

Fiscal and administrative impact

  • The bill reduces state taxable income for qualifying taxpayers and therefore would reduce state income tax revenue. The fiscal magnitude is not specified in the bill text and will depend on (a) the number of taxpayers who claim the deduction, (b) total dues paid, and (c) marginal tax rates.
  • Committee/fiscal notes (where available) indicated minimal or zero direct budgetary impact in some committee records, but a comprehensive revenue estimate would require data on union membership and typical dues in the state.
  • Administrative effects: the Department of Revenue will need to add the deduction to state return forms and IT systems; this is typically a routine modification.

Procedural/timeline notes

  • The bill has passed its first reading and remains in the legislative process. If enacted as written, it takes effect for tax years beginning on or after January 1, 2026 (i.e., first usable for 2026 returns filed in 2027).
  • Further committee consideration, floor votes, and (if passed) gubernatorial action are required before it becomes law.

Additional considerations

  • The deduction reduces taxable income (not a tax credit), so the dollar tax benefit varies with a taxpayer’s marginal state income tax rate.
  • Policymakers may evaluate the measure relative to broader tax‑policy goals (equity, simplicity, revenue adequacy) and consider whether the deduction should be capped, limited to mandatory dues, or subjected to reporting requirements to prevent abuse.
  • Because the bill ties the deduction to the statutory definition in G.S. 168A‑3, eligibility will depend on that existing legal definition of “labor organization.”

Compiled from official sources — confirm details with the bill’s official record.

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