PA Businesses to See Tax Cuts?
A report released today by The Tax Foundation looks at legislation expected to be voted on by the US House tomorrow on business taxes. This bill (HR 1956) would ban states from having a corporate tax (net income, stock and franchise, gross receipts, etc.) on corporations with no property or employees within a state. For instance, other states would not be able to impose a corporate income tax on Pennsylvania businesses simply because they ship to customers in that state.
This would benefit PA businesses (and consumers) in two ways:
1. Absolute savings – PA businesses would see a tax cut of millions, based on what they pay to other states. They would also reduce the cost of complying with tax laws in states they have no physical presence.
2. Relative competitiveness – Pennsylvania taxes on outside businesses (Table 3 in link) are far less than many of our neighboring states (including Ohio, New Jersey, and West Virginia). These states add to the tax burden on PA businesses, while giving themselves a competitive advantage.