PAtownhall.com
Pennsylvania's Marketplace of Ideas
Pennsylvania's Marketplace of Ideas
PAtownhall.com
Pennsylvania's Marketplace of Ideas
Pennsylvania's Marketplace of Ideas
by News Release
FOR IMMEDIATE RELEASE
Contact:
Shawn Bannon
412 281-4783, ext. 4525
sbannon@alleghenyconference.org
Business leaders seek to make Pennsylvania's taxes competitive to create jobs and prosperity
HARRISBURG, PA, Oct. 29, 2007 – Members of the CompetePA Coalition were in Harrisburg today to encourage state lawmakers to continue progress on improving the Commonwealth's business tax climate and fostering long-term economic growth by enacting additional improvements to the state's business tax structure.
The CompetePA Coalition comprises more than 100 businesses and organizations from across Pennsylvania that want to see Pennsylvania compete successfully for new jobs and investment. The coalition is working to solve the serious business tax competitiveness problems that are contributing to the low rate of job creation.
"The hundreds of thousands of employees from all geographic areas and industries that are represented by the CompetePA Coalition remain unified in their support of broad-based changes to our tax structure," said Gene Barr, PA Chamber vice president of government and public affairs. "Making these improvements will reap long-term benefits for Pennsylvania's economy and its citizens."
The coalition's 2007 goals include the elimination of the cap on net operating losses (NOL) and moving toward a single sales factor for Corporate Net Income (CNI) tax apportionment. These improvements would build on positive business tax reductions that were included in the 2006-07 state budget. At that time, the NOL was raised from $2 million to $3 million, or 12.5 percent of taxable income, whichever is greater; and the sales factor was increased from 60 percent to 70 percent.
"Pennsylvanians deserve the growth in high-quality jobs and resulting prosperity that would come from a more competitive business climate," said Kathryn Klaber, executive director of the Pennsylvania Economy League of Southwestern Pennsylvania. "Our young people in particular need better opportunities that will allow them to stay here to work and live."
The Commonwealth's restrictive cap on net operating loss carryforwards is particularly detrimental to start-up and cyclical companies that operate in Pennsylvania, while the structural deficiencies in the apportionment formula to the Corporate Net Income tax have long been a hindrance to economic development.
Pennsylvania is one of only two states with a cap on net operating loss carryforwards. At 9.99 percent, the CNI rate remains the second-highest in the nation.
"Eliminating the NOL cap would ensure that new businesses are able to survive and continue to grow, and would level the playing field for cyclical companies that now must pay significantly higher CNI taxes over a multi-year period," Klaber said.
In addition, calculating the CNI rate based solely on a company's sales means businesses would no longer be penalized for increasing investments in capital and hiring employees. The adoption of the so-called Single Sales Factor to the CNI apportionment formula represents a "home team" advantage that encourages the investment of new jobs and capital in the Commonwealth.
Building on the momentum on business tax reform, coalition members met individually with state lawmakers, and hosted a panel discussion featuring tax experts from businesses across the Commonwealth, who discussed the current business tax climate and its impact on business growth and job creation.
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For more information about CompetePA and what you can do to help Pennsylvania compete successfully for new jobs and investment, visit www.CompetePA.com.
