Pennsylvania’s new, lower corporate tax rate attracts businesses, good jobs

Governor Tom Wolf joined business and economic leaders at the York County Economic Alliance to celebrate Pennsylvania’s new lower Corporate Net Income Tax (CNIT) rate of 4.99%, which will bring Pennsylvania to a healthy and competitive business environment. – Paying jobs and moving our economy forward.

“I’ve been calling for a lower corporate net income tax rate since I took office, and I’m thrilled that we were able to make that happen in my last bill,” said Gov. Wolf said. “This low rate is a game changer for business in Pa. We will ensure tax fairness, make Pennsylvania a premier location for businesses, and bring new good-paying jobs here to Pennsylvanians.”

Pennsylvania has officially moved to a 4.99% CNIT rate – half of the current 9.99% rate – which puts the Commonwealth economy at the seventh lowest CNIT rate in the country.

“We’re here to celebrate a new chapter in Pennsylvania’s history and to highlight what we can achieve when we work together to put Pennsylvania first,” said Luke Bernstein, CEO of the PA Chamber of Business and Industry. “We are proud to work with Gov. Wolf and the bipartisan coalition of legislators and want to thank the Governor and legislative leaders for working with us to make these long-sought tax reform goals a reality. At a time when consensus can seem difficult, our collective efforts to advance Pennsylvania’s economic future are our shared resources.” It makes it more competitive and sends an important message to entrepreneurs and investors around the world that Pennsylvania is open for business. We look forward to building on this momentum with more growth reforms that promote Pennsylvania as a great place to live, work and raise a family.

CNIT is a state tax paid by businesses in Pennsylvania on their corporate profits. A major factor influencing companies’ decisions on where to establish entrepreneurial businesses is the state’s business tax climate. Pennsylvania’s rate of 9.99 percent is the second highest in the nation among the 44 states that issue the CNIT. The 9.99 percent rate often creates a barrier to attracting new businesses and new jobs to Pennsylvania.

By improving Pennsylvania’s business climate at a low CNIT rate, Gov. Wolff is welcoming businesses to put down roots here or expand existing operations — both of which will create new good-paying jobs for Pennsylvanians. It also sends a quick signal to business leaders that Pennsylvania is open for business.

“Lowering the CNIT will make Pennsylvania more competitive in attracting business and economic development projects and will mean more jobs and more investment coming to our community,” said Neil Weaver, Acting Secretary of the Department of Community and Economic Development. “This demonstrates our commitment to keeping existing Pennsylvania businesses here in the Commonwealth by providing a business climate that makes sense for companies’ bottom lines as they continue to grow.”

Pennsylvania’s new, competitive CNIT rate is just one more benefit that makes Pennsylvania a great business location, including:

  • A strategic East Coast location within a day’s drive of nearly 40 percent of the U.S. population and 60 percent of Canada’s population.
  • It has six universities in the top 100 nationally in terms of manpower generated by higher education and research institutions worldwide.
  • An affordable cost of living combined with plenty of entertainment and cultural opportunities.

Reducing the size of Pennsylvania’s CNIT has been a bipartisan effort and priority. Gov. Wolff is joined today by Representatives Carol Hill-Evans, Mary Jo Daley and Greg Rothman.

“Gov. Wolf has called for a reduction in the CNIT in every budget he has proposed, and I have been proud to sponsor legislation in multiple sessions to implement that. “Working with the staff of the Department of Revenue and the House Democratic Appropriations Committee, the plan to reduce the CNIT will encourage new businesses and manufacturers to set up shop in Pennsylvania. I hope they will create good jobs and grow local economies.”

Lowering the CNIT, eliminating outdated capital stock and franchise taxes, and investing heavily in education and the workforce are another step in Gov. Wolf’s commitment to improving Pennsylvania’s business climate.

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