The Pennsylvania Senate Finance Committee recently advanced legislation that would reduce Pennsylvania’s Mutual Thrift Institutions Tax and align it with the ongoing Corporate Net Income Tax reduction schedule.
Senate Bill 576 would reduce the Mutual Thrift Institutions Tax rate immediately from 11.5 percent to 8.55 percent. Reductions would continue until the rate reaches 4.99 percent in 2033.
The bill also would extend the net operating loss carryback period from three years to six years to provide mutual financial institutions operating in Pennsylvania additional flexibility.
“Community banks are deeply invested in the success of the neighborhoods they serve, and this legislation will help ensure they can continue providing the personalized financial services that strengthen local economies and empower Pennsylvanians,” state Sen. Devlin Robinson (R-Allegheny County), who introduced the bill, said. “By modernizing Pennsylvania’s tax structure for these ‘hometown’ banks, we are supporting institutions that help families buy homes, entrepreneurs start businesses, and communities grow and prosper.”
Mutual thrift institutions provide financial services to residents, families, and small businesses throughout their regions. Devlin’s district, the 37th Senatorial District, includes Pennsylvania’s largest mutual thrift institution and one other.
The bill advanced with bipartisan support and now moves to the full Senate for consideration.