In the near future, we plan to introduce legislation that would establish a system of combined reporting to ensure all corporations that do business in Pennsylvania are paying their fair share. There are currently 28 other states and the District of Columbia that require combined reporting.
 
This bill, utilizing language from the adopted Multistate Tax Commission model statute on combined reporting, would ensure multi-state businesses file a single return featuring the income and expenses of parent companies and their affiliates, regardless of location.
 
We cannot continue to allow tax loopholes that enable huge corporations to skirt their share of the tax burden. The long talked about “Delaware loophole” allows 73% of corporations that do business in PA—including most wealthy multinational corporations — to escape from paying any corporate taxes before reducing the corporate net tax rate.
 
As the legislature continues to modernize business taxes and pushes to expedite the lowering of our Corporate Net Income Tax, it is imperative that we require Combined Reporting to expand the tax base and capture additional revenue.
 
A shift to combined reporting levels the playing field for Pennsylvania businesses playing by the rules; it helps stop corporate tax avoidance; it modernizes our tax system; and it helps bring in additional revenue by increasing the amount of businesses subject to our corporate net income tax.
 
Please join us in cosponsoring this important legislation.