Share This Page

Tax package gets rare bipartisan support in Harrisburg

HARRISBURG — Efforts to close a corporate tax loophole received a major boost today when House GOP leaders joined Democratic lawmakers to urge its passage.

Closing the so-called Delaware loophole is an issue that has languished at least seven years. Former Democratic Gov. Ed Rendell never could persuade legislators to pass it.

But combining the measure with corporate tax cuts GOP lawmakers seek produced an unusual bipartisan group of 21 Democrats and Republicans, who called for both ideas to be part of this year's budget negotiations.

Now, multi-state corporations can legally reduce their Pennsylvania tax liability by transferring ownership of certain assets to an affiliated company in Delaware.

The new proposal targets companies taking advantage of the loophole solely for Pennsylvania tax avoidance, lawmakers said. Certain expenses would be required to be added back for tax purposes.

The first year, the measure would generate just $30 to $40 million in additional state revenue, said House Majority Policy Chairman David Reed, R-Indiana. He teamed with Democratic Rep. Eugene DePasquale, of York, for an overall tax fairness package introduced today.

In subsequent years, the added revenue could be hundreds of millions of dollars a year, Reed indicated. Revenue brought in under the proposal would go toward tax reductions for business.

The plan calls for reducing the state's Corporate Net Income Tax from 9.99 percent to 6.99 percent over six years.

Pennsylvania's CNI tax rate is second-highest in the nation.

House Speaker Sam Smith, R-Punxsutawney, and Majority Leader Mike Turzai, R-Bradford Woods, attended the news conference today to discuss the measures.

Rendell "wanted to take a sledgehammer" to the loophole, Turzai said, but the proposal offered today takes a "laser-like" approach to fixing the problem.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.