HARRISBURG, Pa., June 29, 2002 (PRIMEZONE) -- The Pennsylvania Chamber of Business and Industry reacted to the passage of the 2002-2003 State budget today:
On behalf of our 10,000 members, we were pleased to see that the General Assembly extended the life of the Research and Development tax credit to 2006 and expanded the net operating loss carry forward period for Pennsylvania companies from 10 years to 20 years. "These are important changes to the Commonwealth's tax code," said Floyd Warner, President of the Pennsylvania Chamber of Business and Industry, "and both were part of our tax priorities for this year."
"The Pennsylvania Chamber of Business and Industry fought for many years, however, to enact a phase down of this state's most onerous business tax, the Capital Stock and Franchise tax," continued Mr. Warner. "It is for this reason that we express disappointment in the repeal of a significant portion of this phase down. Pennsylvania continues to play "catch-up" when it comes to economic development and the creation of jobs. Businesses in Pennsylvania expected and planned for relief from the burdensome Capital Stock and Franchise Tax this year."
The budget passed this week strips away this relief and results in a three-quarter mill tax increase on business. "While the first reaction in difficult economic times is to place the burden of revenue shortfalls on business, this solution often has an even higher adverse affect on the state," said Mr. Warner. "Businesses making location and relocation decisions today will see that Pennsylvania has a higher tax burden than other states, and they will go elsewhere. With it will go tax revenues that could help to sustain this state. We understand that the budget decisions this week were difficult to make but believe they will only intensify our already difficult struggle as we compete for jobs for Pennsylvania."
We appreciated the opportunity that we had this Spring to work with many members of the General Assembly on lawsuit abuse reform. We look forward to working with them to re-instate the planned phase-down of the Capital Stock and Franchise tax and to enact meaningful changes to our unemployment compensation laws when the General Assembly returns. All of these critical business issues will go a long way towards creating jobs in Pennsylvania.
With over 10,000 members representing every county in the Commonwealth, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association and the fastest-growing state chamber in the United States.