The state House finance committee will once again consider State Representative Dave Reed’s bill that would eliminate the so called “Delaware loophole.” Reed says the bill would lower the tax burden of all Pennsylvania’s businesses. The bill targets only those businesses that avoid paying state taxes by funneling their profits through other states with little or not business taxes, such as Delaware.
Reed has said it gives businesses a “fair and competitive playing field.” House Majority Leader Mike Turzai points to Pennsylvania’s March unemployment rate of 7.9 percent, saying it is too high and something needs to be done to make improvements to the state’s business climate. Turzai says Reed’s bill would not only eliminate the Delaware Tax Loophole but would also enact what he calls “necessary reforms” to the state’s business tax structure. Those actions include providing a schedule to remove the cap on net operating loss deductions.
Turzai says the bill would cut the corporate net income tax rate from 9.99 percent to 6.99 percent over a period of six years starting in the year 2014. The bill will be considered by the House Finance Committee at 11 a.m. today.