Last Thursday, the PA Chamber convened a bipartisan group of state legislators, Wolf administration officials, and local business leaders in the Lehigh Valley to highlight the benefits of the recently enacted state tax reform legislation.
“This tax reform package is an important step toward making Pennsylvania more competitive and showing the world that we’re open for business,” PA Chamber President and CEO Luke Bernstein said. “We thank the Wolf administration, the General Assembly, and our local partners for working with us in a bipartisan manner to enact critical tax reform measures, and we look forward to continuing to work together to drive Pennsylvania’s economy forward.”
The tax reform package (Act 53 of 2022) – which was enacted as part of the 2022-23 budget agreement – includes a long overdue reduction to the state’s Corporate Net Income Tax rate from 9.99 percent to 4.99 percent – cutting it in half over the course of nine years. Based on current state corporate tax rates, once the law is fully implemented, Pennsylvania will go from imposing one of the nation’s highest CNIT rates to the 8th lowest in the country.
“The tax reforms, especially the Corporate Net Income Tax reduction, passed by the General Assembly and signed by the Governor represent the most historic and significant changes to our state’s taxing structure in a generation,” state Senator Pat Browne, R-Lehigh, said. “These changes will create a more competitive business climate within our Commonwealth and help to propel sustainable economic growth, attract new investments and create jobs.”
The benefits of a more competitive business tax code go far beyond improving the state’s business climate. Studies have shown that decreasing the CNIT leads to increased GDP, higher wages, and increased home values, all of which create family sustaining jobs and attract and retain talent. And in the months since Act 53 has become law, the nonpartisan Tax Foundation provided an updated analysis that shows Pennsylvania will leap from 44th in corporate tax structure among the states to 27th once all the reforms in Act 53 are in effect (assuming other state tax policy remains constant.) In terms of overall competitiveness, the tax package will move the Commonwealth from 29th to 17th overall.
Read coverage of the event in the Allentown Morning Call, Express-Times, Central Penn Business Journal, and WFMZ-69.