Pennsylvania Sen. Ryan Aument’s (R-36) tax reform bill advanced the Senate Finance Committee, his office announced Wednesday.
Senate Bill 771 would reduce the Corporate Net Income (CNI) tax from its current 9.99 percent rate to 6.99 percent by 2024. Aument said the bill tax reform would reduce the state’s CNI rate using performance-based mechanisms. The tax could be further reduced if it meets or exceeds revenue projections for the 9.99 percent rate, his office said. In this way, the tax reform is unique in that it only reduces the CNI rate if the benefits equal or outweigh the costs of cutting the tax.
“It is my hope that making Pennsylvania more economically competitive by lowering our CNI rate will benefit working-class families, reverse our stagnant population growth, and ensure that Pennsylvania is an attractive place to live, work, and raise a family for generations to come,” Aument said.
Additionally, the tax reform would help the state compete for new businesses and the jobs they create while providing more opportunities for residents to experience success and upward economic mobility, his office said.
Pennsylvania business leaders agreed.
On Wednesday, the PA Chamber of Business and Industry, the Chamber of Commerce for Greater Philadelphia, and the Greater Pittsburgh Chamber of Commerce announced their approval of the committee’s vote.
“We believe an initial material reduction to at least 7.99 percent will signal to businesses and investors that the Commonwealth of Pennsylvania is truly “open for business,” the group said in a press release. “The business community has long advocated for such a reduction to improve the state’s overall competitiveness.”
The group said that companies across sectors are making large-scale investments post-pandemic. The tax reform is needed to attract businesses to the state so companies can take advantage of its highly skilled workforce, world-class universities, and other innovations. With the higher CNI, they said, companies are going to surrounding states.
In comparison, New York’s CNI rate is 6.5 percent, as is West Virginia’s, while Virginia’s is 6 percent. Of the surrounding states, only New Jersey’s CNI rate is higher than Pennsylvania’s, Aument’s office said.