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Piccola's Tax Change Would Benefit Companies Investing in PA
HARRISBURG -- Recognizing
the need to find ways to improve Pennsylvania’s job climate, Senate Majority
Whip Jeff Piccola (R-15), joined by large and small employers from throughout
the state, called today for support for enacting a “Single Sales Factor”
proposal this year.
Piccola’s Senate Bill 380
would change Pennsylvania’s Corporate Net Income Tax (CNI) to a Single Sales
Factor. Pennsylvania’s CNI tax is currently comprised of three components:
sales, property, and payroll. Prior to 1999, each of these factors counted as
one-third in the calculation of employers’ CNI tax. A number of states have
enacted a Single Sales Factor, which provides an economic incentive for
companies to expand or locate in their home state.
“We are here today to
advocate for a change in the CNI formula to move from 60 percent sales to 100
percent sales. This change would represent an important and sorely needed step
to encourage job creation and job growth in the Commonwealth. In light of the
current budgetary restraints, I believe it is the best way to protect and grow
Pennsylvania jobs,” Piccola said.
In 1999, Governor Ridge
successfully advocated a change in the CNI formula that taxes sales at 60
percent, property at 20 percent, and payroll at 20 percent. “This change helped
make our Commonwealth more competitive. More importantly, by emphasizing sales
over property and payroll, this change rewards companies that make a commitment
to Pennsylvania -- building facilities here and paying people to work in our
state,” said Piccola.
“Since 1999, a number of
other states have begun to enact similar changes. As a result, the competitive
advantage that Pennsylvania had during the Ridge years has since been eroded,”
Piccola added.
Piccola also touted the
advantages of enacting a Single Sales Factor. “A Single Sales Factor plan would
positively impact thousands of existing employers and reward companies with
property and payroll in Pennsylvania. The estimated cost is $75 million -- well
within the existing projected budget surplus.”
During a press conference,
business taxpayers from throughout Pennsylvania joined Piccola to share their
growing desire to make Pennsylvania more competitive with other states. Among
those advocating the Single Sales Factor were Joseph Cottonaro, Senior Director
of Taxes at The Hershey Company, and Kirk Liddell, President & CEO of The Irex
Corporation and First Vice Chair of the Pennsylvania Chamber of Business &
Industry.
"By enacting a Single Sales
Factor apportionment formula, Pennsylvania will encourage the creation of new
jobs and new capital investment. This targeted tax change is an economic
development driver that will reward additional investment, and signal to
existing and prospective new employers that Pennsylvania is serious about
improving its business climate,” explained Joseph Cottonaro of The Hershey
Company.
“Collectively, the business
community has declared that it’s time for government to stop telling us what we
need in order to create jobs and to start listening to those of us who are in
the private sector, every day, trying to create the jobs. As part of The
Chamber's Agenda for Jobs, this legislation represents a necessary step to
improve Pennsylvania's tax structure in order to stimulate job growth. We urge
the adoption of such a pro-jobs tax measure as the Single Sales Factor during
this budget cycle,” said Kirk Liddell of The Irex Corporation.
“I think it’s obvious that
the simplest, most cost effective tax change for Pennsylvania is the enactment
of the Single Sales Factor. In order to remain competitive, we can -- and
should -- make positive changes to our tax structures. My common sense
legislation will do just that and should therefore be a significant factor in
the passage of the budget,” added Piccola.
Piccola’s legislation
includes 19 cosponsors and builds upon a similar measure -- House Bill 515 -- a
Single Sales Factor plan which was recently approved by the House of
Representatives -- sponsored by Representative Dave Reed (R-62).
 
# # #
Sen. Jeff Piccola
speaks at a June 22 news conference in the Capitol Media Center regarding
legislation that would
enact a "Single Sales Factor"
to benefit companies investing in Pennsylvania and improve the state's job
climate.
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