Pennsylvania 2023-2024 Regular Session

Pennsylvania House Bill HB1550

Introduced
6/28/23  

Caption

In corporate net income tax, further providing for definitions, for imposition of tax, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.

Impact

If enacted, HB1550 is expected to significantly affect how corporate income is taxed in Pennsylvania. The tax rate on corporate net income is set to decrease progressively, reaching as low as 4.99% by the year 2031. Moreover, the bill introduces stricter regulations around underpayment of estimated taxes, potentially leading to increased compliance pressures on corporations. The changes could motivate some businesses to reassess their operational structures and tax obligations within the state.

Summary

House Bill 1550 proposes amendments to the Tax Reform Code of 1971, specifically targeting the corporate net income tax. The bill includes changes to definitions, tax imposition, reporting, and payment procedures. One of the key changes is the introduction of a 'water's-edge' method for the taxation of unitary businesses, meaning that only entities with substantial operations within the Commonwealth will be taxed on their income derived from Pennsylvania. This aims to streamline the taxation process for corporations operating in multiple states with different tax regulations.

Sentiment

The sentiment surrounding HB1550 appears mixed among stakeholders. Proponents argue that the bill will encourage economic development by reducing the tax burdens on businesses, making Pennsylvania a more attractive place for corporate investment. However, opponents raise concerns about the long-term implications of diminished revenue for public services, cautioning that such tax cuts may disproportionately benefit larger corporations while neglecting the needs of small businesses and independent operators.

Contention

Notable points of contention include the fairness of the proposed apportionment rules, which critics argue may allow larger corporations to minimize their tax liabilities significantly. There are concerns that the water's-edge apportionment could encourage companies to engage in income-shifting practices, taking advantage of favorable tax treatment while placing a greater burden on businesses that do not have the resources to navigate complex tax landscapes. Additionally, the changes pertaining to deductions for dividends among unitary group members may also face scrutiny.

Companion Bills

No companion bills found.

Previously Filed As

PA SB161

In corporate net income tax, further providing for definitions, for imposition of tax, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.

PA HB1462

In corporate net income tax, further providing for definitions, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.

PA SB656

In corporate net income tax, further providing for definitions, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.

PA HB1610

In personal income tax, further providing for definitions and for income taxes imposed by other states and providing for provisions for overtime pay; in corporate net income tax, further providing for definitions, for determination of net loss deduction, for imposition of tax, for reports and payment of tax, for timely mailing treated as timely filing and payment and for additional withholding requirements, repealing provisions relating to consolidated reports, further providing for extension of time to file reports, for changes made by Federal Government, for limitations on assessments, for definitions, for manufacturing innovation and reinvestment deduction, for enforcement, rules and regulations, inquisitorial powers of the department, for retention of records and for penalties; in tax credit and tax benefit administration, further providing for definitions and providing for application of tax credits or tax benefits to a unitary business; providing for working Pennsylvanians tax credit; and, in general provisions, further providing for estimated tax, for underpayment of estimated tax and for restatement of tax liability under treaties.

PA HB1219

In personal income tax, further providing for classes of income and for special tax provisions for poverty and providing for alternative special tax provisions for poverty; in corporate net income tax, further providing for definitions, for imposition of tax, for reports and payment of tax, for consolidated reports and for manufacturing innovation and reinvestment deduction; in realty transfer tax, further providing for transfer of tax; in tax credit and tax benefit administration, further providing for definitions; in entertainment production tax credit, further providing for definitions, for credit for qualified film production expenses, for carryover, carryback and assignment of credit and for limitations; in Pennsylvania Economic Development for a Growing Economy (PA EDGE) tax credits, providing for biotechnology; in neighborhood assistance tax credit, further providing for tax credit and for grant of tax credit; providing for expanded neighborhood improvement zones; in Pennsylvania Child and Dependent Care Enhancement Tax Credit Program, further providing for credit for child and dependent care employment-related expenses; providing for Public Transportation Trust Fund; and, in general provisions, further providing for underpayment of estimated tax, for method of filing and for allocation of tax credits.

PA HB60

In corporate net income tax, further providing for definitions.

PA HB2422

In corporate net income tax, further providing for definitions.

PA HB2440

In corporate net income tax, further providing for definitions.

PA HB1482

In corporate net income tax, further providing for imposition of tax.

PA HB1414

In corporate net income tax, further providing for imposition of tax.

Similar Bills

PA SB656

In corporate net income tax, further providing for definitions, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.

PA SB161

In corporate net income tax, further providing for definitions, for imposition of tax, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.

CA AB1814

Transportation.

CA SB848

Transportation.

PA HB1462

In corporate net income tax, further providing for definitions, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.

OR SB419

Relating to taxation of multinational corporations; prescribing an effective date.

OR HB2674

Relating to taxation of multinational corporations; prescribing an effective date.

CA AB310

Wealth tax.