Companies don't pay tax on money they don't make
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In response to Debbie Srogi's June 15 commentary perpetuating popular inaccuracies with regard to state taxes ("Governor Giveaway: Corbett Keeps Shoveling Our Money to Oil and Gas Companies," Perspectives), I offer the following:
• The majority of corporations that pay no corporate tax to Pennsylvania don't because they do not owe taxes. For example, for tax year 2006, while roughly 70 percent of companies had no corporate net income tax liability, 65 percent of corporations weren't active for a particular tax year or reported zero taxable income to the Internal Revenue Service. Companies do not pay tax on money they don't make.
• Regarding the so-called Delaware loophole, we can't quantify the tax impact of a vague concept with varying definitions and factors. But to address the minority of companies exercising deliberate strategies to avoid paying corporate tax, Gov. Tom Corbett and the Department of Revenue are committed to investigating transactions between companies, identifying sham royalty and interest payments to out-of-state passive investment corporations used to skirt taxes, and collecting taxes rightfully due Pennsylvania.
• Regarding the vendor discount for timely sales tax remittance and reporting, Ms. Srogi is apparently unaware that Gov. Corbett actually proposed in February limiting this discount to retain $41.3 million in much-needed General Fund revenue in fiscal year 2012-13 and join the majority of states that don't allow this "handling fee" to go uncapped.
Deputy Secretary for Taxation
Pennsylvania Department of Revenue
First Published June 21, 2012 12:00 am