GOVERNMENT RELATIONS
« Back to Public Policy Agenda
Improving Business Climate
To promote a competitive business climate for southwestern Pennsylvania’s technology companies, the Council seeks to:
Reform Pennsylvania’s Corporate Net Income Tax
In 1991, faced with a massive budget deficit, Pennsylvania increased its corporate net income (CNI) tax by more than 50 percent. Seventeen years later, Pennsylvania’s CNI rate stands as the second highest rate in the nation and our state’s economic growth rate has consistently lagged national growth trends.
To restore competitiveness to our business climate, the Pittsburgh Technology Council serves as a key participant in Compete PA, a statewide coalition of businesses and business associations. Though our ultimate goal is to reduce the CNI rate to a more competitive level, our initial strategy is focused on enacting targeted reforms that will primarily support Pennsylvania’s technology and manufacturing sectors.
High Technology and Manufacturing Stimulus Act
Compete PA is currently supporting H.B. 2504 and SB 1229 , known as the High Technology and Manufacturing Stimulus Act, which is aimed at eliminating Pennsylvania’s existing $3 million cap on net operating losses and implementing a single sale factor approach for apportioning the corporate net income tax.
- Net Operating Loss: Pennsylvania is one of only two states in the nation that restricts companies from carrying losses forward to offset future revenues. This policies help create a more stable tax environment for early stage technology firms and manufacturing industries that face cyclical market places.
- Single Sales Factor Approach: By utilizing an approach known as a “single sales factor” formula for apportioning CNI business taxes, states allow firms to pay taxes based on where their sales occur, rather than where their facilities and staff are located. For technology companies, this approach can result in significant tax reductions as Pennsylvania-manufactured products generally are intended for external markets.
Go Government. For more information about the Council’s Government Relations initiatives, or if you have a specific issue that you would like to see the Council address, please contact Brian Kennedy, Vice President, Government & External Relations at 412.918.4297.