Ortitay Bill Would Erase Expired, Job-Killing Tax from Tax Code
HARRISBURG – Rep. Jason Ortitay (R-Washington/Allegheny) recently introduced legislation,
House Bill 1839, to formally remove language regarding the now expired Capital Stock and Foreign Franchise Tax (CSFT) from the state tax code. Before it expired in 2015, the CSFT was imposed on corporations with capital stock, joint-stock associations, limited liability companies, business trusts, and other companies doing business within Pennsylvania.
“Prior to its elimination, we were the only state in the nation that assessed and collected both a business asset tax and a Corporate Net Income tax,” Ortitay said. “It was double taxation that did nothing to incentivize job growth or economic expansion in the Commonwealth.”
Under the CSFT, domestic corporations were subject to the capital stock tax while foreign corporations were subject to the foreign franchise tax on capital stock apportioned to Pennsylvania. The capital stock tax for domestic firms was imposed on the corporation's capital stock value. The foreign franchise tax was a tax on the privilege of doing business in Pennsylvania, and was imposed on the capital stock value attributable to Pennsylvania.
“In order to eliminate any disagreement regarding whether the code’s current expiration language does enough to eliminate this tax once-and-for-all, I believe it is important to completely remove it from the tax code,” Ortitay said.
Originally set to expire in 2009 following a phase-out plan adopted by the state legislature in 2000, the CSFT was officially expired on Dec. 31, 2015. The expiration was delayed on five different occasions when the phase-out schedule was altered in 2002, 2003, 2009 and 2011 and 2013.
Prior to its elimination, The CSFT was imposed on corporations also paying the states Corporate Net Income Tax (CNIT), which at 9.99% is currently the second highest CNIT in the country.
Representative Jason Ortitay
46th Legislative District
Pennsylvania House of Representatives
Media Contact: Morgan Wagner
717.260.6281
mwagner@pahousegop.com
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