Could Pennsylvania become more attractive to out-of-state business and industry sooner than later?
If state senators Ryan Aument (R-Lancaster) and Greg Rothman (R-Cumberland/Dauphin/Perry) can rally the troops, it could become a reality.
The pair of south-central Pennsylvania lawmakers are proposing legislation to accelerate the reduction of the Commonwealth’s Corporate Net Income Tax (CNIT) rate.
As part of the 2022-23 state budget, a tax reform package was instituted that called for a reduction in the CNIT from 9.99 percent to 4.99 percent over a nine-year period, concluding in 2031.
The agreement on incremental CNIT rate reductions was possible in part due to a nearly $6 billion budget surplus for the 2022 fiscal year, in addition to $2.1 billion in federal COVID-19 relief funds allocated to the state by the American Rescue Plan Act.
In their co-sponsorship memoranda, the pair said “While we applaud this historic change, we believe Pennsylvania should not have to wait a decade to experience the full benefits of the lower rate.”
This rate affects domestic and foreign corporations or the privilege of doing business; carrying on activities; having capital or property employed or used in Pennsylvania; or owning property in Pennsylvania.
Aument and Rothman’s proposal is to accelerate the timetable for the reduction. Initially, the rate would drop immediately to 7.99% and then be reduced by a single percentage point each year until 2026 when the 4.99% goal is attained. This would be five years earlier than what was enacted in Act 53.
“The agreement on incremental CNIT rate reductions was possible in part due to a nearly $6 billion budget surplus for the 2022 fiscal year, in addition to $2.1 billion in federal COVID-19 relief funds allocated to the state by the American Rescue Plan Act.”
“The benefits of a more competitive business tax code go far beyond improving the state’s business climate,” they said. ” 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 new talent.”
Getting ready so their buds in DC can hit us with that 30% sales tax.
So what corporation in PA or anywhere (e.g., Exxon-Mobil) has ever given back or reduced anything after pulling in billions in profits? Also as Trump’s famous “tax cut” proved, somebody always pays when corporations pay less.