SCRANTON TIMES-TRIBUNE Editorial: Just about everyone agrees that Pennsylvania’s 9.9 percent corporate net income tax rate is too high – for those businesses that actually pay it.
There also never has been a secret about how to reduce that rate. Lawmakers need to close the so-called “Delaware loophole,” by which many major corporations evade any Pennsylvania income tax liability. Doing so would more fairly distribute the corporate tax burden and cover the revenue that would be lost to the state by reducing the rate.
Under the Delaware loophole, a company sets up a corporate headquarters in a low- or no-tax state, often Delaware. The Pennsylvania subsidiary of that company then buys trademarks, copyrights or other proprietary items from the home office and reports the profits generated in Pennsylvania in the state of the home office, eliminating the Pennsylvania corporate net income tax bill. It costs the treasury between $70 million and $100 million a year… (more)
