Pennsylvania Rep. Barbara Gleim (R-Cumberland) announced Tuesday that she intends to introduce legislation that will lower the state’s corporate net income tax rate.
In a memo to members of the House of Representative, Gleim said her legislation would lower the rate from 9.99 percent to 4.99 percent.
“Pennsylvania’s current CNIT rate, the highest single-rate CNI tax in the country, stifles economic growth and hurts our ability to be competitive by discouraging businesses from developing in the Commonwealth. This extremely high tax rate is also particularly onerous to industries with long or uneven business cycles because of the limitations Pennsylvania also places on net operating loss deductions,” she said in the memo. “My legislation will simply reduce Pennsylvania’s Corporate Net lncome Tax rate from 9.99 percent to 4.99 percent for taxable years beginning after December 3I, 2021. This change will help to make Pennsylvania more competitive with neighboring states such as West Virginia, New York, Ohio and Virginia, leading to increased investments from businesses looking to either move or expand in the Commonwealth and generating countless job opportunities for our hardworking residents.”
According to the Tax Foundation, an independent tax policy nonprofit, 44 states levy a corporate income tax with rates ranging from 2.5 percent in North Carolina to 11.5 percent in New Jersey. Pennsylvania is one of six states, along with Alaska, Illinois, Iowa, Minnesota, and New Jersey, with a top marginal corporate income tax rate at 9 percent or higher.
Ten states – Arizona, Colorado, Florida, Kentucky, Mississippi, Missouri, North Carolina, North Dakota, South Carolina, and Utah – have top rates at or below 5 percent. Four states, Nevada, Ohio, Texas and Washington do not tax corporate income tax, but levy taxes based on gross receipts instead. Two states, South Dakota and Wyoming, impose neither a corporate income tax or a gross receipts tax.