Pennsylvania Chamber of Business and Industry President and CEO Luke Bernstein today thanked Gov. Tom Wolf and leaders in the General Assembly for working together to enact significant reforms to Pennsylvania’s tax structure, which were signed into law last week. Act 53 of 2022 improves Pennsylvania’s economic competitiveness by providing relief to small businesses, along with immediate and continued reductions to the state’s Corporate Net Income Tax (CNIT). By 2031, the end of the scheduled reductions, Pennsylvania’s rate of 4.99% will be the sixth lowest in the nation (based on current state corporate tax rates).
Here’s a look at what these leaders are saying about these reforms, how they were accomplished, and what they mean for the state’s future:
“Throughout my administration I made it a priority to reduce and reform the CNIT and I’m pleased that this budget reflects a commitment to investing in our business sector and workforce,” said Governor Tom Wolf. “The overwhelmingly bipartisan-approved budget supports a stronger business economy to bring new business and good paying jobs to Pennsylvania and reforms Pennsylvania’s CNIT to ensure tax equity and fairness.”
“We all know Pennsylvania is a great place to live, and we also know for far too long our state’s tax and regulatory policies have made it a tough place to start and grow a business, thanks to what was the highest corporate net income tax in the nation,” Speaker of the House Bryan Cutler said. “I am grateful to have worked with our leadership team, our colleagues in the Senate and the Governor to secure significant reforms to reduce burdens on small businesses and entrepreneurs, and to put the state on a track to reduce the CNIT every year through 2031. Our thanks to the PA Chamber and our state’s local chambers for their advocacy on this issue to expand opportunity for Pennsylvania’s workers and their families.”
“The reduction of the Corporate Net Income Tax in this year’s state budget is a major win for Pennsylvania. It is a huge step in the right direction in creating a business climate that helps attract, expand, and grow businesses and jobs in the Commonwealth,” said Senate Majority Leader Kim Ward. “Time after time, Pennsylvania lost businesses to other states due to our tax climate. The reduction in the Corporate Net Income Tax now better positions Pennsylvania to compete with other states for business growth while also managing the economic headwinds before us.”
“For years there has been bipartisan recognition that our Corporate Net Income Tax is a major disincentive to job creators that wish to further invest in Pennsylvania,” House Majority Leader Kerry Benninghoff said. “By reducing the CNIT this year, with continued reductions in future years, and also helping our small businesses with tax fairness and simplification, we will drive natural growth and investment in the Commonwealth that will strengthen our communities and lead to a better Pennsylvania.”
“It’s always good when we can help the entrepreneurs who are investing in the Commonwealth – taking risks, innovating, and creating the good-paying jobs that support our communities. We should be doing everything we can to make sure Pennsylvania is a leader in manufacturing, technology and science, and this is a great step,” said House Minority Leader Joanna McClinton. “Now it’s time for us to keep partnering with businesses of all sizes to make sure these tax cuts are reinvested in job growth and worker pay to build a stronger economy for everyone.”
“This budget makes major tax policy modifications, including a phased reduction of the Corporate Net Income Tax to 4.99 percent in 2031 and conformity with Section 179 expense deductions and Section 1031 like-kind exchanges for small businesses, that are the most significant changes to improve the economic climate here in Pennsylvania in more than a generation,” said Senate Majority Appropriations Chairman Pat Browne. “As a result of these critical tax changes, Pennsylvania’s overall business tax climate will soon be the most competitive among our Northeastern states and among the most competitive in the nation. Together with the strongest Commonwealth financial position in a generation, the 2022-23 budget sets a solid foundation to encourage and recruit historic investment in Pennsylvania and sends a strong message to job creators that our Commonwealth is open for business.”
“This budget package is a comprehensive plan that moves Pennsylvania forward towards a brighter future. That includes putting Pennsylvania on the path to being more attractive to job creators large and small. We have long been tagged with having the second highest Corporate Net Income Tax in the nation,” House Majority Appropriations Chairman Stan Saylor said. “I am incredibly pleased to have worked with groups like the Chamber to initiate the first reduction since 1995. Additionally, we are making it easier for our small businesses to grow and invest, rising the tide for all job creators.”
“At a time when we are providing historic investments in education, including in the career and technical area, we have the tools to prepare a more inclusive, better educated population and skilled workforce. That, coupled with the implementation of small business tax cuts and capitalizing upon proven incentive programs, we hope to improve Pennsylvania’s economic competitiveness,” said Senate Minority Leader Jay Costa.
“The bipartisan CNIT reforms enacted this budget – both lowering the rate and increasing tax fairness – will improve Pennsylvania’s competitiveness, ensure corporations that operate primarily or exclusively in Pennsylvania have a level playing field, and grow opportunity and prosperity for everyone,” House Democratic Appropriations Chairman Matt Bradford said.
“Pennsylvania has so much to offer investors and entrepreneurs. These tax reforms instantly make us more globally competitive and allow us to focus on Pennsylvania’s strengths as a hub of global commerce and opportunity – our prime location, world-class educational institutions, innovative workforce and more,” said Luke Bernstein, President and CEO of the PA Chamber. “On behalf of the state’s business community, I want to thank the Governor and the leaders in the House and Senate for working across the aisle to pave the way for greater opportunity for generations to come, and our deep thanks to the 222 members of the House and Senate who voted yes.”
For further details on the positive impact of the tax reform package on Pennsylvania’s business community, visit www.pachamber.org.
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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.