PA Business Tax Climate
House Finance Committee Informational Meeting: Pennsylvania's Business Tax Climate
October 6, 2021
According to the study Total State and Local Taxes FY2019 by the Council on State Taxation, Pennsylvania's businesses accounted for 40.8% of state tax revenue, 48.2 % of local tax revenue, and 43.8% of total state and local tax revenue. While this does put Pennsylvania almost directly at the average in all three measures, there are major disparities on which sectors of the business community shoulder the burden of these percentages and thus, could be cause for concern when attempting to attract or retain certain types of economic development within our commonwealth.
According to the same study, Pennsylvania's business tax treatment of property taxes and sales taxes were below the national average; however, the business tax treatment of corporate income, excise, unemployment insurance, individual income on pass-through, and licenses were all above the national average.
Published tax rates matter and greatly influence site selectors when the next major plant, warehouse, office or headquarters is being considered. The two most glaring shortcomings in regard to Pennsylvania's corporate taxes are: the highest flat-rate in the nation 9.99% corporate net Income tax rate; and, a 40% cap on net operating loss.
Read the full report HERE.