PA Chamber Urges Lawmakers to Pair Affordability Efforts with Tax, Legal Reforms Pennsylvania should continue improving its tax and legal climate if policymakers are serious about making the Commonwealth more affordable and competitive, PA Chamber Vice President of Government Affairs Neal Lesher told state lawmakers during a Sept. 1 hearing on affordability. Testifying before the House Republican Policy Committee, Lesher highlighted several tax reforms the PA Chamber believes would help employers invest, grow, and create jobs in Pennsylvania. He expressed support for accelerating the state’s Corporate Net Income Tax reduction, expanding Net Operating Loss deductions for small businesses, adopting a state and local tax deduction workaround, increasing the vendor discount, and eliminating accelerated sales tax payments. Lesher noted that Pennsylvania has made significant progress since lawmakers began reducing the Corporate Net Income Tax in 2022, but said additional work is needed to improve the Commonwealth’s competitive position. “For businesses, cash is like water,” Lesher said. “It flows to the least restrictive place.” Lesher also emphasized the importance of simplifying Pennsylvania’s tax code and reducing compliance burdens that often require businesses to spend additional resources on accountants, attorneys, and other professional services. He argued that affordability discussions should include legal reform, noting that litigation costs can contribute to higher insurance premiums and other business expenses. “I really don’t think you can have a conversation on affordability in Pennsylvania without at least touching on lawsuit abuse reform,” Lesher said. The hearing also included an overview of the Pennsylvania Growth and Affordability Plan (GAP), a 10-bill legislative package being developed by House Republicans. According to Rep. Thomas Kutz (R-Cumberland), the package will address seven policy areas: childcare, personal health and wellness, energy, small businesses, large and new businesses, housing, and student loans. In addition to testimony from the PA Chamber, lawmakers heard from representatives of PPL Electric Utilities and the real estate industry about rising energy costs and Pennsylvania’s housing shortage. For the PA Chamber, the discussion reinforced a familiar message: improving affordability requires more than lowering household costs. It also requires policies that make Pennsylvania a more attractive place to invest, expand, and do business. Through tax competitiveness, regulatory simplicity, and legal reforms, the Chamber argues policymakers can strengthen both affordability and long-term economic growth across the Commonwealth.
Court Challenges Highlight Growing Resistance to State Climate Liability Efforts A recent federal court victory secured by the U.S. Chamber of Commerce and an ongoing Pennsylvania case underscore an important legal question with significant implications for employers: Can states and local governments impose financial liability on energy companies for global climate change? The answer increasingly coming from courts is that these disputes are best resolved by federal law, not a patchwork of state-level lawsuits and liability schemes. Last week, Chief U.S. District Judge Brenda Sannes struck down New York’s Climate Change Superfund Act, ruling the state cannot enforce a law that would have required fossil fuel companies to pay $75 billion over 25 years into a fund intended to cover climate-related damages. The court sided with a coalition that included 22 state attorneys general and business groups led by the U.S. Chamber of Commerce, finding the law was preempted by federal law. The decision represents an important check on efforts to address climate policy through retroactive liability rather than through federal legislation and regulation. Employers have long argued that allowing individual states to impose their own climate liability standards would create significant uncertainty for energy producers, investors, and consumers alike. The issues raised in the New York case closely mirror arguments now before Pennsylvania’s Commonwealth Court. In March 2024, Bucks County filed suit against several major oil companies and the American Petroleum Institute (API). The Bucks County Court of Common Pleas dismissed the case in May 2025, concluding that the claims were preempted by federal law. In April, the PA Chamber joined a coalition amicus brief urging the Commonwealth Court to affirm that dismissal. Like the parties challenging New York’s law, the coalition argues that climate change is a national and global issue that cannot be addressed through state-law claims targeting individual companies. Allowing such lawsuits to proceed would invite conflicting legal standards across jurisdictions and expose businesses to substantial liability for activities already governed by federal law. The broader concern for employers extends beyond litigation currently before the courts. Similar concepts have also been proposed through legislation. House Bill 1931, introduced in Pennsylvania during the previous legislative session, would allow lawsuits against energy companies for extreme weather events for which they are deemed “potentially responsible.” The legislation has not advanced, but such proposals could create sweeping liability exposure and increase costs for consumers. A report by the U.S. Chamber Institute for Legal Reform concluded that enactment of H.B. 1931 could significantly increase costs borne by Pennsylvania households and taxpayers by encouraging expansive climate-related litigation and increasing legal risks for energy producers. For Pennsylvania employers, the stakes reach well beyond the energy sector. Affordable and reliable energy remains a key competitive advantage for the Commonwealth’s manufacturers, industrial facilities, data centers and other energy-intensive businesses. Policies that increase litigation risks and costs for energy production can ultimately affect energy prices, investment decisions and the state’s broader economic competitiveness. The next major development will come from Pennsylvania’s Commonwealth Court, which must decide whether to uphold the dismissal of the Bucks County lawsuit. As courts continue to weigh these questions, the outcome could determine the extent to which climate-related disputes are resolved through federal law or through an expanding network of state and local liability actions.
Major Investments Reflect Pennsylvania’s Growing Competitiveness Two major corporate announcements last week will bring more than $1.5 billion in new investment and nearly 3,000 jobs to Pennsylvania, offering more signs that the Commonwealth is becoming more competitive for major economic development projects due to recent pro-growth, PA Chamber-led policy reforms. Last Tuesday, Chobani announced plans to invest $1.2 billion to establish its first dairy manufacturing operation in Pennsylvania, creating 900 jobs in the Lehigh Valley. The project represents the largest private-sector investment in Pennsylvania agriculture history and, when fully operational, is expected to create a new market for more than three billion pounds of Pennsylvania milk each year. Then, on Thursday, Burlington Stores announced it will relocate its corporate headquarters from New Jersey to Philadelphia. The retailer plans to invest $370 million in a new headquarters at Schuylkill Yards and create at least 2,000 jobs over the next five years. The announcements come as Pennsylvania lawmakers are making a concerted effort to address some of the longstanding challenges that have made it harder for the state to compete for new investment. For example, for decades Pennsylvania had one of the highest corporate tax rates in the nation and a slow and complex permitting process that employers frequently cited as a barrier to investment. However, recent reforms spearheaded by the PA Chamber have put Pennsylvania on a more competitive path. In 2022, the PA Chamber helped lead a bipartisan effort to cut Pennsylvania’s 9.99 percent Corporate Net Income Tax — then the second-highest rate in the nation — in half over nine years. The rate is now 7.49 percent and remains on track to reach 4.99 percent in 2031. The Commonwealth has also taken significant steps to modernize its permitting process. Bipartisan reforms enacted through the 2024-25 and 2025-26 state budgets created and then expanded the SPEED program, allowing qualified third-party professionals to assist with certain permit reviews while establishing clearer timelines and greater transparency. The law also provided for “deemed approved” policies for certain permits no acted on in a timely manner. The PA Chamber worked with lawmakers, the governor’s office, labor, and other stakeholders to advance those reforms. Lawmakers also improved Pennsylvania’s treatment of Net Operating Losses, gradually raising the deduction cap to 80 percent and addressing a significant tax disadvantage for startups and growing businesses. These changes are part of a broader effort to make Pennsylvania a better place to invest, build, and create jobs. And there are signs that the Commonwealth’s competitive position is improving. Site Selection Magazine ranked the state’s business climate 11th in the nation in 2025, up seven spots from the previous year. CNBC ranked Pennsylvania 13th in the nation for business in 2026, its highest position in 15 years. Moody’s Analytics has also highlighted Pennsylvania’s economic performance, noting that the state is the only state in the Northeast with a growing economy.
PA Chamber Seeks Changes to Proposed Corporate Tax Rules The PA Chamber is urging the State Department of Revenue to revise its proposed regulations governing how businesses determine which sales of services count as Pennsylvania sales when calculating their corporate net income tax. The Chamber submitted comments last week to the Independent Regulatory Review Commission (IRRC), raising concerns that portions of the proposed regulations go beyond existing state law and could create additional uncertainty and compliance costs for employers. Pennsylvania adopted a new system for calculating corporate income tax in 2013 that generally looks at where a company makes its sales. For businesses that provide services (such as accounting, consulting, legal, engineering, and technology services), sales are generally counted in Pennsylvania based on where the customer receives the benefit of the service. The Department of Revenue issued guidance in 2014, and tax practitioners and the business community have long sought formal regulations to provide greater clarity and certainty. The PA Chamber supports that goal but said the proposed regulations would, in several areas, change existing policy rather than formalize it. “We believe a well-crafted regulation could provide certainty and be mutually beneficial to taxpayers and the Department,” PA Chamber Vice President of Government Affairs Neal Lesher wrote in public comments submitted to the IRRC on Aug. 24. The comments focus on provisions it believes deviate from state law and others that would create rules that could favor the Department of Revenue in determining where a company’s sales should be counted, rather than requiring the department to make findings required by law. State law generally requires professional services to be counted where they are delivered, but the proposed regulations would instead establish rules based on factors such as a customer’s primary residence, where a business contract is managed, or where an affiliated company’s employees are located. The PA Chamber argues that those locations do not necessarily show where a customer receives the benefit of a service. It is asking the department to make the proposed rules optional safe harbors — approaches businesses can choose to use — rather than replacing the standard established by state law. The Chamber also raised concerns regarding proposed rules for internet-access services, how the department can require a different method for deciding where a company’s sales should be counted, documentation requirements, and a provision that could allow the department to treat up to 100 percent of an employer’s sales as Pennsylvania sales if its records are deemed insufficient. Another provision would require taxpayers to explain differences between how they count sales in Pennsylvania and how those same sales are treated in other states. The Chamber said this could impose significant compliance costs when differences simply result from states having different tax laws. The PA Chamber also asked the department to provide guidance on common business arrangements, including contract manufacturing and research and development services. “Better clarity and certainty in this area is something we all desire,” Lesher wrote. The full public comment letter is available here.
PA Chamber weighs in on two Pennsylvania court cases The PA Chamber recently filed amicus briefs in two cases before Pennsylvania courts, weighing in on issues that could affect how businesses interact with state agencies and where lawsuits involving out-of-state companies are heard. The briefs are part of the PA Chamber’s broader advocacy work, which extends beyond the state legislature to the executive and judicial branches. Through amicus, or “friend of the court,” briefs, the PA Chamber provides courts with its perspective on cases that could affect Pennsylvania’s business climate and economic competitiveness. In Goldata Computer Services Inc. v. Department of Banking and Securities, the PA Chamber joined the U.S. Chamber of Commerce in urging the Pennsylvania Supreme Court to recognize a state constitutional right to a jury trial in state agency enforcement actions. The brief argues that claims involving securities fraud and deceit have historically been tried before juries and that civil monetary penalties also require a jury trial. The U.S. Supreme Court has recognized a federal constitutional right to a jury trial in certain cases involving such penalties. The case could have implications for how Pennsylvania agencies pursue enforcement actions against businesses. In a separate case, Syngenta Crop Protection v. Black, the PA Chamber joined a coalition in urging the Pennsylvania Superior Court to reverse a trial court decision and dismiss out-of-state plaintiffs’ mass tort claims under the doctrine of forum non conveniens. The doctrine allows a court to dismiss or transfer a case when another jurisdiction would be a more appropriate and convenient forum for the litigation. The issue has taken on greater significance following the U.S. Supreme Court’s 2023 decision in Mallory v. Norfolk Southern Railway Co., which held that Pennsylvania’s consent-by-registration statute can provide Pennsylvania courts with personal jurisdiction over out-of-state corporations based on their registration to do business in the Commonwealth, including in certain cases involving conduct that occurred outside Pennsylvania. In Syngenta, more than 1,000 plaintiffs have filed claims in Pennsylvania’s Mass Tort Program, with more than 91 percent identifying no connection between their claims and Pennsylvania, according to the coalition’s brief. Syngenta Crop Protection, LLC is a Delaware company with its principal place of business in North Carolina. The brief argues that its registration to do business in Pennsylvania should not, by itself, make Pennsylvania the appropriate forum for claims brought by out-of-state plaintiffs involving out-of-state conduct. Both cases illustrate how judicial decisions can shape Pennsylvania’s business environment and the legal obligations facing employers. Rules governing agency enforcement and where businesses can be sued help shape the legal environment companies face when operating in the Commonwealth, and the PA Chamber will continue to weigh in on cases where those decisions could affect Pennsylvania’s competitiveness and the broader business climate.
Pa. commits over $90B toward infrastructure in latest 12-year plan Pennsylvania is planning more than $90 billion in transportation infrastructure investments over the next 12 years under a newly approved statewide program. Earlier this month, the State Transportation Commission approved Pennsylvania’s 12-Year Transportation Program, outlining more than $90 billion in planned investments in roads, bridges, public transit, airports, rail freight, and other transportation infrastructure. The plan represents a more than three percent increase over the previous 12-year program and draws on federal, state, and local funding. It includes projects across all transportation modes over the full 12-year period, with priorities informed in part by public input gathered during the planning process. “This plan was developed through significant collaboration with Pennsylvania communities to enhance safety and modernize our system,” PennDOT Secretary Mike Carroll told PennLive. “This investment in our transportation network helps ensure that the Commonwealth remains a safe place to live, work and visit.” The largest share of funding during the program’s first four years, beginning Oct. 1, will go toward state highway and bridge projects, with $16.9 billion allocated for that work. Public transit will receive $12.9 billion, followed by $367 million for multimodal projects, $240 million for rail freight, and $154 million for aviation. The new program also builds on transportation work completed in recent years. According to state officials, more than 21,000 miles of roads and 1,900 bridges have seen improvements during the current administration. Now that the commission has approved the plan, the Federal Highway Administration and the Federal Transit Administration will review its compliance with necessary federal requirements. For Pennsylvania employers, the scale of the investment highlights the role transportation infrastructure plays in supporting the state’s economy. Improvements to highways, bridges, transit, rail, and airports help strengthen connections between businesses, workers, suppliers, and customers while supporting the movement of people and goods throughout the Commonwealth.
Shapiro imposes new requirements on Pa. data center projects Gov. Josh Shapiro last Tuesday signed an executive order imposing new requirements on data center projects seeking to operate in Pennsylvania, including provisions related to electricity usage and others designed to increase transparency, strengthen environmental protections, and give local communities greater influence over proposed developments. Executive Order 2026-05 directs the Department of Environmental Protection (DEP) to incorporate the Governor’s Responsible Infrastructure Development (GRID) Requirements into its permitting process for data center projects. Shapiro said the standards are not voluntary, and developers must agree to legally binding requirements to receive the approvals needed to build. The order does not impose a moratorium on data center development, as other states have instituted. However, it requires projects to secure all required local approvals before receiving a state permit, which could effectively prevent some proposed developments from moving forward. Data centers must pay their own way A central component of GRID is preventing new data center electricity demand from shifting costs onto existing residential and business customers. Under the order, developers must pay the full cost of new generation, transmission, distribution, and other infrastructure needed to serve their projects. They must also bring in or purchase sufficient incremental electric capacity to meet their demand. The requirements include increasing clean-energy requirements, beginning at 10 percent in 2027 and rising to 32 percent by 2035. The executive order also directs the administration’s Special Counsel for Energy Affordability to work with the Pennsylvania Public Utility Commission on additional protections for ratepayers. Those efforts include establishing procedures to ensure that data centers are among the first customers to have their electricity service curtailed during periods of grid stress and requiring data centers to cover the infrastructure costs associated with their electricity demand. Local approval and transparency Developers must also provide notice of their intent to comply with GRID, submit detailed project plans to DEP, and enter into a legally binding Consent Order and Agreement outlining their obligations and penalties for noncompliance. The requirements also call for transparency with local communities, local hiring, and community benefits agreements. DEP will not issue required permits for data center projects until all required local approvals have been obtained. Developers will also be required to provide information about their projects, including details on energy and water consumption. The administration said nondisclosure agreements will not be permissible for data center projects. As part of the order, the Department of Community and Economic Development (DCED) will release best practices for municipalities on zoning standards and community benefit agreements. DEP also launched a public map showing data center projects that have engaged with the department and the status of their permits. Fast Track removed The executive order immediately removes data center projects from Pennsylvania’s PA Permit Fast Track Program and makes them ineligible for the program going forward. Previously, nine data center projects had received Fast Track status, including two Amazon facilities in Bucks and Luzerne counties. Growing number of proposals The executive order comes as interest in Pennsylvania as a data center location has increased sharply. According to the administration, more than 100 data center proposals have been identified through publicly available sources. Shapiro characterized most as speculative, noting that many have not taken formal steps to seek state approval. Of the more than 100 proposals, Shapiro noted that 58 have engaged with DEP at some level, 15 have applied for at least one DEP permit, and five have received all permits necessary to begin their first phase of development. The governor’s executive action follows House lawmakers’ approval of the GRID requirements as part of House Bill 2650 earlier this year. The state Senate has not voted on the legislation.
Maryland Ruling Reinforces PA Chamber’s Warnings on Digital Ad Tax A Maryland court’s decision striking down the state’s digital advertising tax has reinforced a key warning the PA Chamber made throughout the debate over a similar proposal in Pennsylvania earlier this year. The Maryland Tax Court ruled on Friday that the tax violates the federal Internet Tax Freedom Act and ordered Maryland to refund taxes collected, plus interest. The law had already faced legal challenges, including a federal appeals court ruling last year that struck down part of it on First Amendment grounds. The latest ruling has direct implications for the debate over House Bill 1678 in Pennsylvania, which the PA Chamber led the opposition against this year. The bill passed the House of Representatives in June by a vote of 139-63 but was not included in the final state budget. House Bill 1678 would have applied the state’s 5 percent gross receipts tax to digital advertising purchased in Pennsylvania. As lawmakers considered the proposal, the PA Chamber warned that the proposal likely violated the Internet Tax Freedom Act, which prohibits discriminatory taxes on electronic commerce. House Bill 1678 singled out digital advertising while exempting traditional forms of advertising, including newspapers, television, radio, and billboards. The PA Chamber also cautioned lawmakers that the tax would place costs on Pennsylvania consumers and small businesses that rely on digital advertising to reach customers. Additionally, digital advertising revenue is already subject to Pennsylvania’s Corporate Net Income Tax under the state’s market-sourcing rules, meaning H.B. 1678 would have imposed a duplicative tax on the same economic activity. With Maryland now facing a court-ordered refund of taxes collected under its digital advertising tax, the court’s ruling offers a timely example of the legal and financial risks the PA Chamber warned Pennsylvania policymakers about as it successfully lobbied to keep the proposal out of this year’s budget agreement.
PA Chamber Urges Action on Energy Supply, Reliability as Demand Grows Pennsylvania must act now to ensure its energy supply can keep pace with growing demand, PA Chamber Vice President of Government Affairs Neal Lesher told lawmakers Friday. Testifying before the Pennsylvania Senate Republican Policy Committee, Lesher warned that Pennsylvania faces a growing gap between electricity supply and demand as power plants retire while demand rises. “Pennsylvania stands at a critical crossroads in shaping both our own energy future and the nation’s energy future,” Lesher said in his testimony. Pennsylvania remains a national energy leader. It is the nation’s second-largest natural gas producer and third-largest electricity producer, while ranking first in electricity exports and as a supplier of natural gas, coal, and refined petroleum products. But the state’s energy mix has changed significantly. Citing data from the U.S. Energy Information Administration (EIA), Lesher testified that natural gas accounted for 59 percent of Pennsylvania’s electricity generation in 2023, up from just 1.5 percent in 2001; while coal’s share fell from 57 percent to 5.4 percent over the same period. Nuclear power accounted for nearly 32 percent of generation in 2023. Lesher noted that the shift toward natural gas has also helped reduce Pennsylvania’s power-sector carbon dioxide emissions by 46 percent between 2005 and 2020. Meanwhile, PJM Interconnection has projected that electricity demand will grow an average of 2.3 percent annually over the next 10 years. Lesher said new generation is not being added quickly enough to replace retiring resources, putting reliability and affordability at risk. “Without sufficient and reliable replacement generation from traditional baseload resources, available, dispatchable energy that can be quickly deployed to meet demand can be diminished and will put reliability at risk,” he said. The consequences could mean higher electricity prices and disruptions for businesses, particularly manufacturers and other energy-intensive industries. Lesher said those pressures could also make Pennsylvania less competitive for new investment. At the same time, he said data center development presents a major economic opportunity, potentially bringing in billions of dollars in investment, jobs, and tax revenue. However, capturing those benefits will require reliable, affordable power. The PA Chamber supports an “all-of-the-above” energy strategy that maintains existing reliable generation while encouraging investment in new technologies, including hydrogen and small modular reactors. Lesher also called for continued investment in natural gas infrastructure and policies that support carbon capture and storage. He urged policymakers to avoid policies that discriminate against reliable thermal generation, including carbon taxes, and called for continued electric grid modernization and permitting reform. Lesher pointed to the bipartisan SPEED program and subsequent reforms as positive steps, but said more work is needed to reduce delays and provide greater certainty for businesses making major investments. He also proposed creating a dedicated state energy department or strengthening the state’s existing energy policy functions to provide a centralized focus on Pennsylvania’s long-term energy needs. “By embracing a forward-thinking energy policy that combines innovation, reliability, and economic growth, we can ensure a prosperous energy and economic future for all Pennsylvanians,” Lesher said. Lesher’s full written testimony is available here
Pa. lawmakers propose sweeping limits on corporate political activity Pennsylvania lawmakers expect to consider legislation this fall that would prohibit corporations from making political contributions or otherwise engaging in election-related activity, a move that could significantly affect how businesses participate in the political process. House Bill 2728, recently introduced by Rep. Joe Webster (D-Montgomery), would amend Pennsylvania’s corporate charter law to prohibit corporations from “directly or indirectly engag[ing] in election activity or ballot question activity.” Corporations that violate the provision could lose their charter and business privileges and face civil action from the state Attorney General. Webster and several of his co-sponsors said in a press conference last week that the bill is intended to address the growth of corporate political spending in the aftermath of the U.S. Supreme Court’s 2010 decision in the landmark Citizens United case. This new proposal is similar in nature to (though significantly broader than) legislation the Pennsylvania House of Representatives passed in June. That bill, House Bill 497 (also introduced by Webster), sought to prohibit corporations with certain levels of foreign ownership from contributing to independent expenditure committees or administering affiliated political action committees funded by employee contributions. The PA Chamber vocally opposed H.B. 497 and raised concerns that its overly broad definition of a “foreign-influenced corporation” could sweep in organizations with deep roots in Pennsylvania that represent large segments of the state’s workforce. Brian Rengert, the PA Chamber’s Director of Political Engagement, argued in a memo that any effort to protect elections from foreign interference must be balanced with protecting the freedom of businesses and other organizations to lawfully participate in the political process. Notably, this new proposal goes beyond targeting corporations with foreign ownership and would instead apply to all corporations in Pennsylvania. Companies and their employees participate in the political process in a variety of ways, including through affiliated PACs funded by voluntary employee contributions and independent expenditures on issues and candidates. Restrictions on those activities would limit businesses’ and their employees’ ability to have a voice in elections and public policy debates. The legislation has been referred to the House State Government Committee. Its sponsors have expressed confidence that it could pass the House, yet acknowledged it is likely to face an uphill battle in the Republican-controlled State Senate. The PA Chamber will continue to monitor the proposal and advocate for policies that protect Pennsylvania’s elections while preserving the lawful ability of businesses and their employees to participate in the political process.