A bipartisan reform bill will lower Pennsylvania’s corporate income tax while closing the “Delaware loophole,” which for years has allowed companies to reduce their state taxes. Multi-state corporations can currently reduce their Pennsylvania taxes by transferring ownership of certain assets to a Delaware affiliate.
House GOP leaders have joined Democratic lawmakers to urge the bill’s passage, reports the Pittsburgh Tribune-Review
. The loophole has been open for at least seven years; former Democratic Gov. Ed Rendell could not persuade lawmakers to close the tax break.
However, this time around, the measure is being combined with corporate tax cuts GOP legislators want and a bipartisan group is calling for the deal to be part of this year’s budget talks.
By closing the loophole, the state will bring in an additional $30 million to $40 million in revenue the first year and hundreds of millions of dollars a year after that, according to Republican House Majority Policy Chairman David Reed.
Reed said the additional funds will go toward allowing tax reductions for the state’s businesses. The plan calls to reduce Pennsylvania’s Corporate Net Income Tax, which is now the second-highest in the nation, from 9.99 percent to 6.99 percent over the next six years.
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