PA Chamber Applauds Senate Finance Committee for Advancing Pro-Growth Tax Bills HARRISBURG – The Pennsylvania Chamber of Business and Industry today applauded members of the Senate Finance Committee for advancing two tax reform bills that will enhance the state’s business competitiveness and support economic growth. Senate Bill 207 accelerates the reduction of Pennsylvania’s Corporate Net Income (CNI) tax rate to four percent by 2026, improving the Commonwealth’s ability to attract investment and create jobs. Separately, Senate Bill 473 restores the vendor discount for businesses that collect and remit sales tax, helping small businesses offset their costs. “These bills are a win for Pennsylvania’s economy,” PA Chamber Senior Vice President of Government Affairs Alex Halper said. “A lower CNI makes our state more competitive and encourages job growth, while restoring the vendor discount provides much-needed relief for businesses facing rising costs. We urge lawmakers to move swiftly in advancing these commonsense, pro-business reforms.”
PA Chamber LTE Pushes Back on Combined Reporting The Pittsburgh Post-Gazette recently published a letter to the editor from PA Chamber Director of Government Affairs Neal Lesher correcting misconceptions about Pennsylvania’s tax structure and the impact of mandatory combined reporting on businesses. Full text of the letter is shown below. Letter: No loophole by Neal Lesher | Pittsburgh Post-Gazette The Post-Gazette’s recent editorial, “Shapiro corporate tax plans are a good starting point to avoid budget blues” (Feb. 16), overlooks key facts about Pennsylvania’s tax structure and the real impact of mandatory combined reporting. The so-called “Delaware loophole” was closed more than a decade ago when the General Assembly authorized the Department of Revenue to add back to business’s tax liability any interstate transactions made for tax avoidance. Since then, multiple reforms — like federal tax law changes in 2017 and bipartisan state tax reforms in 2022 — have expanded Pennsylvania’s corporate tax base by hundreds of millions of dollars. In fact, corporate net income tax collections have surged, up 92 percent in just the past five years. Additionally, mandatory combined reporting wouldn’t create the sort of revenue windfall proponents claim. A 2010 National Conference of State Legislatures study found no evidence that combined reporting increases tax revenue. More recent studies in Maryland, Indiana and Virginia show that it can actually reduce revenue or create unpredictable swings. Meanwhile, the complexity of compliance would discourage multi-state firms from investing in Pennsylvania. Instead of making our tax system more burdensome, lawmakers should build on recent bipartisan reforms that lower rates and simplify compliance — proven ways to make Pennsylvania more competitive for job growth and investment.
PA Chamber Leads Statewide Coalition Calling for Elimination of Pennsylvania’s Start-Up Tax HARRISBURG – Today, the Pennsylvania Chamber of Business and Industry led a coalition of more than 70 chambers of commerce across the Commonwealth in calling on Governor Josh Shapiro and members of the General Assembly to improve Pennsylvania’s economic competitiveness by eliminating the state’s tax penalty on start-up businesses. In a letter addressed to the governor and legislative leaders, the coalition highlighted the urgency of improving Pennsylvania’s tax treatment of Net Operating Losses (NOLs). The coalition cited the negative impact of Pennsylvania’s current business tax and regulatory climate, noting that the state ranks among the worst in the nation for job seekers and key economic indicators. The Kauffman Foundation recently identified Pennsylvania as having the lowest rate of new entrepreneurs in the entire country. “Governor Shapiro and leaders in the House and Senate have each acknowledged the need to improve Pennsylvania’s economic competitiveness,” the letter reads. “Improving the treatment of Net Operating Losses is a major step towards this goal. Pennsylvania’s 40 percent cap on NOLs is one of the most restrictive in the nation, hindering start-ups and cyclical businesses.” The coalition emphasized the importance of increasing the cap on NOL deductions, which allow businesses to offset their tax liabilities with previous losses, as a means to attract more employers and reduce hurdles to entrepreneurship and business growth. Net operating loss reform has emerged as a bipartisan priority in both the state House and Senate. The letter points out that 24 states have no cap on NOLs, while Pennsylvania is one of just two states that caps NOL deductions below the federal limit of 80 percent of taxable income. “We appreciate the many proposals that policymakers and advocates have put forth to spur Pennsylvania’s economy and urge lawmakers to focus on competitiveness,” the letter continues. “We urge you to prioritize correcting Pennsylvania’s treatment of start-up businesses so the Commonwealth can compete on an equal playing field to attract entrepreneurs, new employers, and the jobs, economic development, and prosperity they bring to communities.” Full text of the letter is available here.