Pennsylvania’s new budget for 2022-23 includes several business tax changes, including lower taxes for corporations.
The new budget cuts the corporate net income tax from 9.99% to 8.99% as of Jan. 1, 2023, and then gradually reduces (0.5%) it each year in phases until 2031, when it reaches 4.99%.
Pennsylvania’s corporate net income tax rate is currently the second highest in the nation, behind only New Jersey at 11.5%, according to the Tax Foundation. The 2031 rate will make Pennsylvania’s corporate net income tax the sixth lowest, according to the Pennsylvania Chamber of Business and Industry (PCBI).
Other business tax changes that start Jan. 1 include: