Last week, the Senate Finance Committee approved three proposals that would improve Pennsylvania’s tax climate. The bills are part of a pro-growth policy agenda that falls under the PA Chamber’s ‘Bringing PA Back’ economic resurgence initiative.
The measures would provide much needed relief to businesses and bring the Commonwealth more in line with tax treatments utilized by other states. One of the biggest red flags to job creators looking to invest in Pennsylvania is the state’s Corporate Net Income Tax, which at 9.99 percent is one of the highest rates in the country. Senate Bill 447 would incrementally reduce the CNI rate to 6.99 percent over the course of 6 years.
Further adding to the Commonwealth’s uncompetitive nature is the state’s treatment of like-kind exchanges. Pennsylvania is the only state that does not align with the Internal Revenue Code in providing for like-kind exchanges, putting the state’s small businesses at a competitive disadvantage. Senate Bill 347 would provide for “like-kind” exchange of tax deferrals.
Finally, H.B. 952, would follow the lead set by 29 other states by creating a sales and use tax exemption for certain equipment purchased by data centers.
In a memo sent to the Senate Finance Committee, the PA Chamber noted that these bills will help to improve the state’s competitiveness and promote job growth. “Economic recovery is a key component of our Bringing PA Back initiative, a member-driven recovery effort to advocate for policies that will rebuild Pennsylvania’s economy in a manner that provides opportunity for all.”
These bills now await consideration by the full Senate.