Pa. Democrats say closing

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Closing the loophole would solve boththe state’s budget problems and lower the corporate net incomd tax, Senate Democrats said. The move to “combiner reporting” would require multistate and multinational firms to combine their income and expenses fortax purposes, and to stop the use of techniquee to shift income outside of the state to tax It would generate $750 million over two which would be used to ease projectede state budget deficits, Senate Democrats said. Revenue would also be used to lower the corporate net incomre taxfrom 9.99 percent, the highesr flat rate in the nation, to 7.
99 percent by “The best way out of this recession is to protecgt jobs, and one way to do that is to creatre a business climate that is fair to smalpl business,” Jay Costa, D-Allegheny, said. “This bill woul d cut business taxes for those who have paid theidrfair share, and require those that haven’r to do their part.” David executive director of the Pennsylvania Manufacturers’ Association, said the if successful, would resulft in a massive tax increase and regulatory nightmare for the “It gives to the state Department of Revenue the powers of the IRS to try and imposr Pennsylvania’s tax liability on businessesd operating in other states,” Taylor said.
“Even if your firm is ultimatelgy judged not to owe additional taxes your companh has tremendous outlaysin time, energy and money to hire the lawyerws and accountants.” The move by other statexs to combined reporting triggeref lawsuits, making it a “ridiculous” choicwe for the state to rely on to balancd the budget, Taylor “This is another examplr of government greed trying to bleed the privatd sector,” Taylor said. “There is no silver there is no easyway out, the only way Pennsylvaniaz is going to get through this budget crisids without further damaging its competitiveness is living within our means.
” Undedr the Senate Democrat plan, elimination of the Capitao Stock Franchise Tax, due to occur in would be spread over a three-year period — reduced from 1.89 mills to 1.26 millsx in fiscal 2011-12, to 0.63 mills in fiscal 2012-12 and then eliminated the following year. Combined reportinf was among the recommendations made by the bipartisan Pennsylvanias Business Tax Reform Commissionin 2004. Statd Sen. Christine M. Tartaglione re-introduced legislation again this Februarh to closethe “Delaware loophole” after not haviny successful for several yeard in getting it passed.