CompetePA Coalition urges Gov. Wolf to reconsider proposed tax increases in budget

The CompetePA Coalition is urging Gov. Tom Wolf to reconsider business tax increases included in his 2021-2022 budget proposal.

CompetePA, managed by the Greater Pittsburgh Chamber of Commerce, is comprised of more than 160 businesses and organizations across the Commonwealth. Launched in 2005, the coalition’s goal is to help the state create a competitive business tax climate encouraging job growth in Pennsylvania.

“It is no secret that Pennsylvania has one of the least competitive business tax environments in the country,” the organization said in a Feb. 15 letter to the governor.

In its correspondence, CompetePA noted that Pennsylvania ranked 43^rd in the nation in the Tax Foundation’s “Corporate Tax Rating” in 2021. It also noted that the state has the highest non-graduated Corporate Net Income Tax (CNIT) rate in the country at 9.99 percent.

“While we appreciate your proposal to lower this rate, tying the rate reduction to combined reporting – a policy that adds complexity, uncertainty, and cost to business – ultimately further negatively impacts Pennsylvania’s competitive standing,” the letter continued.

The coalition also included their opposition to the proposal to raise the Personal Income Tax rate, which is currently one of the most competitive rates in the country at 3.07 percent. It is also the rate paid by several small businesses in the state.

“As regions everywhere look to recover and thrive in a post-pandemic world, now more than ever we need to ensure Pennsylvania is competitively positioned versus the competition,” the letter stated. “Instituting combined reporting, as well as raising the PIT rate on individuals and small businesses, are drastic moves that send the wrong message to businesses – both the businesses that are already here and the ones we are working to attract.”

CompetePA continued to urge Wolf to engage with the coalition’s longstanding work to significantly lower the CNIT to a competitive rate as well as removing the cap on usage of Net Operating Losses (NOL). The coalition specifically highlighted House Bill 198, introduced last month by Rep. George Dunbar (R-56), which seeks to amend the Tax Reform Code of 1971 and allow full NOL recovery from losses incurred during the COVID-19 recession.

“We need to ensure that especially as we emerge from the pandemic, Pennsylvania is in the best possible position to compete for talent and investment,” the letter concluded.