Data shows PA corporate tax collections consistently higher since CNI tax cut went into effect in January 2023
HARRISBURG – In light of new data released by the Independent Fiscal Office, the Senate Finance Committee today voted to advance two pro-growth tax reform bills championed by Sens. Ryan Aument (R-36), Tracy Pennycuick (R-24), Greg Rothman (R-34), and Judy Ward (R-30). The bills were brought up for consideration by Sen. Scott Hutchinson (R-21), Chairman of the Senate Finance Committee, who has consistently supported efforts to enact pro-growth tax reform.
The first bill, Senate Bill 345 sponsored by Sens. Aument and Rothman, accelerates the reduction of the Commonwealth’s Corporate Net Income (CNI) tax by immediately dropping it to 7.99% and then reducing it an additional point every January until it falls to 4.99%.
A plan to reduce Pennsylvania’s CNI tax rate over the course of nine years was passed as part of the 2022-23 state budget, with the first one-point drop from 9.99% to 8.99% taking effect in January 2023. Since this initial cut, Pennsylvania’s economy has shown signs of growth, including increased revenue collections from the CNI tax in January, February, March, and April of 2023 compared to the same periods in 2022.
Studies have also shown that decreasing the CNI leads to better job opportunities, higher workers’ wages, and improved communities.
“While we applaud the historic change made in last year’s budget, we believe Pennsylvania should not have to wait nearly a decade to experience the full benefits of the lower rate,” the senators said. “All the data we have since we cut the rate in January shows that reducing rates increases revenue for the state and makes Pennsylvania more economically competitive and ensures it is an attractive place to live and work. Passing this bill will improve the economy and help working families much faster. Why should we wait?”
The second bill, Senate Bill 346 sponsored by Sens. Rothman, Aument, and Pennycuick, will gradually increase the Net Operating Loss (NOL) carryover limit from the current 40% to 80% over four years, bringing the Commonwealth in line with both the federal limitation and the limitations of 48 other states.
“The current limit puts Pennsylvania at a huge disadvantage compared to nearly every other state in the country, turning away new businesses that might otherwise choose to locate here. For Pennsylvania to compete nationally and attract new businesses, we must address this anti-growth policy,” the senators said.
Both bills will now go before for the full Senate for consideration.