Monumental Tax Reforms a Win for Pennsylvania’s Economy
The Columbia Montour Chamber of Commerce joins the Pennsylvania Chamber of Business and Industry in applauding the General Assembly and Governor Tom Wolf for passage of significant reforms to the Commonwealth’s tax structure, including a reduction to the state’s uncompetitive Corporate Net Income Tax (CNI) rate and tax relief for small businesses.
“There’s been discussion about reducing the CNI for years,” said Columbia Montour Chamber President Fred Gaffney. “This agreement supports existing Pennsylvania employers, and significantly improves our opportunities for business growth.”
The Columbia Montour Chamber worked with the PA Chamber and a broad coalition of fellow chambers from throughout the Commonwealth to advocate for tax reductions and reforms to support employers, including sending a letter signed by more than 50 chambers of commerce that urged lawmakers to reduce the CNI for the economic benefits that studies show it will bring to the Commonwealth – including an increase in state GDP, wages and home values, job creation and the attraction and retention of new talent.
“This monumental tax reform package is a win for businesses and the people of Pennsylvania,” said PA Chamber President and CEO Luke Bernstein. “Chambers of commerce have been our steadfast allies in this effort and their joint advocacy proved critical. In a time when compromise can be elusive, this bipartisan measure is a good illustration that by working together, we can put Pennsylvania jobs, businesses, and investment first and chart a path towards a brighter future for our Commonwealth.”
For decades, Pennsylvania’s CNIT rate, which at 9.99 percent was the highest flat rate in the country, served as a barrier to growth. The budget cuts the rate in half over the course of eight years – starting with a full one percent reduction in 2023 to 8.99 percent and then phasing down each year by .50 percent until reaching 4.99 percent in 2031. Based on current state corporate tax rates, the full reduction takes Pennsylvania from the highest CNI tax rate in the country to the sixth lowest by 2031 and is the first change in the rate since 1995 – giving our economy a vigorous boost in our post-pandemic recovery.
The tax reform package also targets relief to small businesses, including allowing tax liability to be deferred when small businesses upgrade property assets, known as “like-kind exchanges”, and allowing small businesses to deduct qualifying equipment purchases, just as federal law provides for under Section 179 of the federal tax code. These tax reforms will make it easier for small businesses to expand, buy equipment, and invest in their operations and workforce.
The Columbia Montour Chamber of Commerce applauds state lawmakers for working in a bipartisan way to advance these important priorities and support Pennsylvania employers.