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State & Regional News

Pa.'s corporate tax reform gets thumbs up from business leaders

Don Cunningham Tax Reform
Hayden Mitman
/
LehighValleyNews.com
Lehigh Valley Economic Development Corporation president and CEO, Don Cunningham (at podium) touts Pennsylvania's corporate tax reform.

BETHLEHEM, Pa. — Recent state corporate tax reform will help businesses, including those in the Lehigh Valley, grow and create more jobs throughout the state, officials said Thursday.

Local elected officials joined business leaders and representatives from the Lehigh Valley Economic Development Corporation to celebrate the state's decision to cut its Corporate Net Income Tax -– which, at 9.99%, is among the highest rates in the country.

  • Pennsylvania's current corporate net income tax, at 9.99%, is among the highest in the nation
  • Gov. Tom Wolf has supported reforms that will lower the rate to 4.99% by 2031
  • Business leaders say this reform will help local companies invest locally and create jobs

“We were the second-highest state in the United States, which was a disadvantage not only for our companies that are operating here in the Lehigh Valley and across the commonwealth, but certainly for our work of working to recruit new companies into the market," LVEDC President Don Cunningham said, leading off the morning’s event.

    "That was a significant demerit on the analysis of the economic competitiveness of the Lehigh Valley and the Commonwealth.”
    The CNIT is a tax that businesses pay to the state from corporate profits.

    New Jersey, with a rate of 11.5%, is the only state in the country with a higher corporate income tax rate.

    Cunningham explained that, for the past several years, his organization has called for a lower corporate income tax rate, as it could help woo new business and investment in the area.

    With the approval of the most recent state budget, Gov. Tom Wolf has put Pennsylvania on a path to cut the CNIT rate to 4.99% by 2031. Next year, the rate will drop to 8.99%, with annual half-percent decreases until the goal rate is reached.

    “We applaud the governor and the general assembly for passing such an important tax change that will have a real meaningful impact for Pennsylvania companies and workers."
    Christopher Kuhn, chief financial officer at Olympus Corporation of the Americas.

    Forty-four states levy a CNIT, and, when Pennsylvania’s rate drops to less than 5%, the commonwealth will be within the top 10 states with the most competitive CNIT rates, Cunningham said.

    “That's a huge game changer, not only for companies that are here, but for companies that we want to recruit in the future,” he said.

    During the day’s event, lawmakers from both parties touted the bi-partisan support that helped enable the tax reform. Four Republican and two Democratic state representatives and senators from the Lehigh Valley attended.

    And, from the business community, representatives from Olympus of the Americas and C.F. Martin & Company spoke about the impact the tax reform could have on the community.

    “What this tax reduction will do for businesses, including C. F. Martin, is allow us to keep more of the funds that we are generating in the business and, instead of paying those in taxes, continue to invest that back into the business,” Martin Chief Financial Officer Nathan Eckhart said.

    Christopher Kuhn, CFO of Olympus of the Americas, said the tax reform will help businesses grow and create more jobs throughout the state.

    “We applaud the governor and the general assembly for passing such an important tax change that will have a real meaningful impact for Pennsylvania companies and workers,” Kuhn said.