On April 26, the Pennsylvania House voted 195 to 8 on a bipartisan basis to approve legislation that would reduce the Commonwealth’s Corporate Net Income Tax (CNIT) to boost jobs and economic growth nationwide. of State. The bill is now before the Pennsylvania Senate for consideration.
“Today’s historic vote shows Pennsylvania is open for business,” House Speaker Bryan Cutler (R-Lancaster) said Tuesday. “This is a critical step in ensuring we can attract and retain job creators of all sizes, building family careers across Pennsylvania.”
According to Pennsylvania House Republicans, the state has the second highest corporate income tax rate in the nation, with New Jersey ranking first. With neighboring states ranging from 6% to 7.25%, the Commonwealth is essentially eliminated from the list of states where companies seek to relocate or expand, they said.
“Pennsylvania has too many attributes to consistently lose to other states in investment and job growth, but it has for too long due in large part to an excessively high CNIT “said Pennsylvania Chamber of Commerce and Industry President and CEO Gene Barr. said earlier this month. “If we are reduced to a more competitive level, we can focus on implementing the policies that will revive our economic recovery, form and retain a globally competitive industry.st workforce of the century.
If passed, an amendment to the 1960 House Bill would reduce Pennsylvania’s CNIT from 9.99% to 8.99% effective January 1, 2023 and reduce taxes for more than 93,000 businesses across the state.
Additionally, HB 1960 would continue to reduce the CNIT rate by 0.5% per annum for the next two years if the Commonwealth had a General Fund budget surplus of more than $500 million, lawmakers said.
“This is strong, pro-growth legislation that will provide good jobs for Pennsylvanians and stand up for Pennsylvania taxpayers and families,” said House Majority Leader Kerry Benninghoff (R-Center /Mifflin). “This is legislation that, although only a start, will strengthen our communities, help stop our brain drain and bring investment to our state.”
Benninghoff said the House Republican Caucus is focused on passing legislation to make Pennsylvania the envy of the East by accelerating its economy to spur investment, create family-supporting jobs and grow communities. .
HB 1960’s concepts, he said, have bipartisan support and are seen as “essentially necessary” to change the perception that Pennsylvania is not open to receiving additional investment.
“For many years, our state has been charged with holding the title of having the second highest CNIT in the nation,” Cutler explained. “This distinction has prevented countless industries, businesses and employers from investing and growing in Pennsylvania. This bill levels the playing field as we compete to attract employers and industries to our Commonwealth.
“We will never stop working to increase investment in Pennsylvania and grow our economy and there is more to come,” Benninghoff said.
For example, as the state grows its economy and jobs, lawmakers “must also seek to reduce the tax burden on our citizens, especially those who are working and experiencing record inflation,” Cutler said.
Toward that goal, the PA House also unanimously proposed legislation on Tuesday proposed by Pennsylvania Rep. Jesse Topper (R-Bedford/Franklin/Fulton) to provide relief from the prepayment of sales and use taxes to the state.
“Pennsylvania’s antiquated prepayment tax collection system only serves to make the state’s tax code even more difficult for businesses,” Topper said. “This bill would provide them with some relief at a time when they need it most.”
Under the current system, Pennsylvania business owners must estimate each month how much sales and use tax they think they can collect.
If passed, HB 2277 would end Pennsylvania’s accelerated sales tax (AST) advance payments, which are based on estimated sales tax collections, and business owners would only pay the state than the sales tax they actually collect, according to the bill.
“Although business owners base their estimates on the previous year’s collections, the estimates are not always accurate, forcing them to make an additional payment at the end of a tax period if they underestimate estimate the amount of sales tax they actually collected,” Topper said. . “This is a confusing practice that can easily be remedied by removing this odd prepayment requirement.”
HB 2277 has also advanced to the State Senate for consideration.