Lawmakers Propose Commercial Activity Tax to Aid Pennsylvania Businesses
Philadelphia-February 4, 2011 – Citing the need to level the playing field for Pennsylvania businesses and to make the state more competitive in attracting and retaining businesses, Senator Anthony Hardy Williams (D-Phila/Delaware County) joined by Council members Bill Green (D-At-Large) and Maria Quinones Sanchez (D- 7th) at a City Hall news conference yesterday, introduced what they hope will accomplish both objectives-a Commercial Activity Tax.
“The time has come for Pennsylvania to take bold common sense measures to make our state more competitive,” said Williams. “The Commercial Activity Tax (CAT) will be the first step in the process. I look forward to working with my colleagues in the legislature to pass this important legislation.”
The new tax measure, which would replace the corporate net income tax which Williams called business repelling, would implement a broad based, low-rate tax on receipts to be paid by all firms selling into Pennsylvania markets, thus reducing the tax burden on Pennsylvania businesses. The CAT will also result in the elimination of the “profitability penalty” and the market-distorting effects inherent in the corporate net income tax.
During the press conference Green remarked, “I’m honored and excited to be working with Senator Williams, along with my colleague Councilwoman Maria Quinones Sanchez, to attract new investment and economic activity to Philadelphia and Pennsylvania, to create jobs, and to make our tax system fairer, more efficient, and more effective.”
In addition to assisting in business retention and attraction efforts, the CAT will result in a broader tax base, a tax on consumption rather than investment, and encourage capital investment and job creation. The CAT also will help Pennsylvania-based companies when they are competing with companies that are based out-of-state. Finally, the CAT provides increased revenue stability, facilitates responsible fiscal planning, and creates a simplified and more efficient business tax structure – all of which are important to any business.
“Quinones Sanchez, who also spoke at the news conference stated, “I am pleased that the Senate will be debating our corporate tax structure and how we make Philadelphia and Pennsylvania competitive in this global market.”
A similar commercial activity tax has been effective in Ohio, which is winning awards for business attraction, capital investment, and job creation, and has been proposed in California. Williams will introduce the Commercial Activity Tax legislation soon.
For more information about Senator Anthony Hardy Williams please visit www.senatoranthonyhwilliams.com.