The PA Chamber of Business and Industry, The Chamber of Commerce for Greater Philadelphia, and The Greater Pittsburgh Chamber of Commerce today applauded Gov. Tom Wolf for signing into law – and the 222 members of the state House and Senate who previously voted “yes” – on a significant tax reform measure that was agreed to as part of the 2022-23 state budget and includes a much-needed reduction to the state’s Corporate Net Income Tax. The Commonwealth’s business community has long advocated for a reduction to improve the state’s overall competitiveness and economic climate.
For decades, Pennsylvania’s CNIT rate, which at 9.99 percent was the highest flat rate in the country, served as a barrier to growth. The budget cuts the rate in half over the course of nine years – starting with a full one percent reduction in 2023 to 8.99 percent and then phasing down each year by .50 percent until reaching 4.99 percent in 2031. Based on current state corporate tax rates, the full reduction takes Pennsylvania from the highest CNI tax rate in the country to the sixth lowest by 2031 and is the first change in the rate since 1995 – giving our economy a vigorous boost in our post-pandemic recovery.
“This monumental tax reform package is a giant step towards making Pennsylvania more competitive,” said PA Chamber President and CEO Luke Bernstein. “We need to send a clear message that Pennsylvania is officially ‘Open for Business,’ and by cutting the CNI rate in half – a goal that our organization and fellow chambers have worked toward for so long – we are doing just that. Creating a competitive business environment allows us to further leverage the many attributes that truly make Pennsylvania shine as one of the best places in the world to work, live, and raise a family – our prime location, world-class educational institutions, innovative and skilled workforce, and more. We thank Governor Wolf and the General Assembly for prioritizing the Commonwealth’s competitiveness in this year’s budget, and for working together for Pennsylvania. In a time when compromise can be elusive, this bipartisan measure is a good illustration that by working together, we can put Pennsylvania jobs, businesses, and investment first and chart a path towards a brighter future for our Commonwealth.”
“The benefits of a CNI reduction go far beyond cutting costs for businesses. Studies have shown that a decrease in the CNI tax rate will increase GDP, boost wages, increase home values, create family sustaining jobs and attract and retain talent,” said Matt Smith, President of the Greater Pittsburgh Chamber of Commerce, an Allegheny Conference on Community Development affiliate. “It helps our entire population, creating an economic ecosystem that supports job creation in both large corporations and smaller, community-based businesses.”
“We applaud the actions of the Wolf Administration and General Assembly to bring Pennsylvania’s business taxes more in line with our neighboring and competitor states as we seek to attract and retain jobs from around the nation and world,” said Liz Ferry, Vice President of State Legislative Affairs at the Chamber of Commerce for Greater Philadelphia.
The Chamber community encourages lawmakers and the Wolf administration to build on the momentum in this year’s budget and continue to find ways to cross the political aisle and find agreement on policies that will help move Pennsylvania forward.
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The Pennsylvania Chamber of Business and Industry is the state’s largest broad-based business association, with its statewide membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.