Pennsylvania House Republicans have released a package of tax cuts aimed at helping the state's economy recover from the COVID-19 pandemic.
The suite of five bills, referred to by the lawmakers as the “Commonwealth COVID Comeback,” was announced at an October 14 press conference. The bills are intended to "rebound the economy by incentivizing manufacturing with no new taxes or fees," according to a press release on the package.
The package will include a bill to create a new set of tax incentive zones for businesses in the advanced manufacturing, medical supply, life sciences, food supply chain, robotics, information technology or automation, and cargo operations industries, according to a cosponsorship memorandum filed by Rep. Josh Kail (R).
“There seems to be, on the national stage, a renewed focus after we saw in COVID how risky it is to rely on foreign sources of manufacturing,” Kail said at the press conference. “My bill is an effort to bring those manufacturers back.”
Businesses located in those zones would receive tax abatements for state and local taxes and would be eligible for targeted job creation tax credits.
Another bill, to be authored by Rep. Natalie Mihalek (R), would lower the state’s corporate net income tax rate from 9.99 percent to 5.99 percent by January 1, 2025. The legislation would also increase the cap on net operating loss carryforwards to 50 percent of taxable income by January 1, 2022.
Gov. Tom Wolf (D) has also called for reducing the corporate net income tax to 5.99 percent, coupled with shifting the state to mandatory combined reporting. And Senate Finance Committee Minority Chair John Blake (D) has said mandatory combined reporting is needed to "close the 'Delaware loophole' that allows companies an opportunity for legal tax avoidance."
Another bill in the Republicans' package, to be authored by Rep. Mike Reese (R), would establish a select committee to review ways to assist the development of new industries, including advanced manufacturing, in the state. Reese, who during the press conference called the return of manufacturing to Pennsylvania a matter of national security, said, “I promise you this is going to be bipartisan at the end of the day, no doubt about it.”
The remaining bills focus on COVID-19 liability protections and Department of Environmental Protection permits, according to the press release.