HARRISBURG, Feb. 21, 2011 – Sen. Christine Tartaglione today questioned Pennsylvania’s revenue secretary over why corporate tax loopholes aren’t drawing the same attention as consumers who make purchases on line.
“The governor’s going after getting the Internet loophole closed, which affects individual taxpayers, yet he’s not willing to go after a corporate loophole which affects big business and that’s very sad,” Tartaglione told Revenue Secretary Dan Meuser.
In testimony before the Senate Appropriations Committee today, Meuser outlined his department’s plans to force Pennsylvania taxpayers to report Internet purchases from all of 2011 and remit unpaid sales or use tax before the April tax deadline. Under the plan, taxpayers will be required to remember Internet purchases from 2011 and remit the six percent use tax.
But nearly eight years after Pennsylvania’s Business Tax Reform Commission recommended closing the Delaware loophole for corporate income taxes, and nine months after Tartaglione wrote to Meuser about the growing number of Pennsylvana gas drillers with Delaware subsidiaries, the secretary could not detail action taken to enforce tax laws on businesses.
Despite testifying that “companies go way out of their way to avoid paying our tax level,” Meuser said “solutions are being evaluated.”
“Why don’t we just close the Delaware loophole?” Tartaglione asked.
“That discussion certainly has been going on for a while,” the secretary replied. “We’re very focused on it. We’ll see what comes along.”
Tartaglione said the imbalance in tax enforcement is troubling.
“It’s difficult to imagine what is being evaluated,” Tartaglione said. “We have an extensive tax commission report nearly eight years old, and 23 states have already adopted combined reporting to close the Delaware loophole. If the administration would apply the same level of enforcement to corporations as it is to consumers, we could restore hundreds of millions of dollars in budget cuts.”
Tartaglione is the prime sponsor of Senate Bill 679, which would require “combined reporting” for businesses in Pennsylvania to close the “Delaware Loophole.”