On July 8, after years of trying to cut taxes, the Pennsylvania Legislature finally passed an amendment to Pennsylvania’s Corporate Net Income Tax (CNIT) and passed other provisions aimed at reaching businesses. outsiders doing business in the Keystone State. See HB 1342. This article will discuss the three main tax benefits of the new bill.
Pennsylvania has long been criticized for its high tax rate of 9.99%, which hampers growth. Pennsylvania’s CNIT rate has consistently ranked it first among states with the highest corporate tax rates nationally. The new bill gradually lowers the CNIT rate, until it bottoms out at 4.99% in 2031. When fully implemented, Pennsylvania’s CNIT rate will rank among the lowest in the nation. The CNIT’s lower rate could make it more attractive to companies looking to relocate, given that all of its neighboring states have significantly higher tax rates. This should also help Philadelphia as it hopes to attract more business. Philadelphia has been hit by its own high corporate income and revenue tax rate, the effect of which has only been exacerbated by the high CNIT rate.