Wednesday, June 3, 2009
Bills Would Reform State Business Taxes
Pennsylvania State Senator Christine Tartaglione (D – Phila.) has introduced two bills that would reform business tax practices in the state and hopefully bring more business to the Commonwealth. Under the bills, the Corporate Net Income Tax would fall from 9.99% to 7.99%, which State Senator Jay Costa (D – Forest Hills) believes would be more attractive and competitive for prospective businesses. Also, the 1.89 mill Corporate Stock and Franchise Tax would be frozen for two years before being slowly phased out of use. “[After 2011 we would] begin the reduction over the next three years, by phasing out .63 mills each [year] thereafter, to a point where we have eliminated entirely over the course of five years the Corporate Stock and Franchise Tax, which many people have communicated to us is one of the most onerous taxes we have, as well as the Corporate Net Income Tax,” says Costa. The bills would close the “Delaware loophole.” The loophole allows companies to avoid paying Pennsylvania taxes by operating out of states like Delaware and Nevada, which have no income tax. The legislation would do this by implementing “combined reporting” which forces companies to report profits in both states.