Today, more than 45 local chambers from across the Commonwealth joined the PA Chamber of Business and Industry, The Chamber of Commerce for Greater Philadelphia, and The Greater Pittsburgh Chamber of Commerce in calling for a material reduction in Pennsylvania’s Corporate Net Income Tax. At 9.99 percent, Pennsylvania has the unfortunate distinction of having the highest non-graduated Corporate Net Income Tax rate in the country which serves as a major barrier to economic growth. This issue, which has seen growing bipartisan support over the past several months, has been a top priority of the state’s broad-based business community as a great way to improve Pennsylvania’s overall competitiveness.
In a letter sent to members of the state’s General Assembly, the business leaders noted that with the Commonwealth at a critical juncture in recovering from the pandemic and setting the course for a bright, bold economic future, the benefits of a CNI reduction go far beyond attracting new business and investment. Studies have shown that a decrease in the CNI tax rate would increase GDP, boost wages, increase home values, create family sustaining jobs and attract and retain new talent.
“The reality is, Pennsylvania’s excessively high CNI Tax rate has always detracted investment, resulting in billions of dollars in lost revenue and driving companies and job opportunities to other states,” said PA Chamber President Gene Barr. “As we collectively look towards our long-term, post-pandemic recovery, reducing the CNI is a critical step toward improving the Commonwealth’s overall competitiveness and putting us on the path toward a prosperous economic future.”
“In the Pittsburgh region, we are acutely impacted by the negative effects of our high CNI rate, as neighboring Ohio proactively markets that they have a 0 percent state corporate income tax rate,” said Greater Pittsburgh Chamber of Commerce President Matt Smith. “In order to be competitive and put Southwestern Pennsylvania onto the radar of site selectors and job creators, we need to materially reduce our CNI Tax rate without delay.”
“We urge members of the General Assembly to pass meaningful tax reform legislation this session and prioritize policies that promote economic growth,” said Rob Wonderling, president and CEO of the Chamber of Commerce for Greater Philadelphia. “High corporate net income taxes slows employment growth and is a barrier to attracting new enterprises. In today’s difficult economic climate there is not a moment to lose.”
Proposals have been introduced in both the state Senate and House of Representatives that would lower the Commonwealth’s CNI Tax rate. In his 2022-23 budget proposal, Gov. Tom Wolf also called for an immediate rate reduction to 7.99 precent with a gradual reduction in the rate over the course of 5 years.
As lawmakers and the Wolf administration negotiate the coming year’s spending plan, the business community is urging a material reduction in the CNI Tax rate be included in the final compromise.
The Pennsylvania Chamber of Business and Industry is the state’s largest broad-based business association, with its statewide membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.