Conklin introduces bills to close 'Delaware Loophole,' end retailers' vendor discount

Legislative package designed to increase state revenues through business tax reforms

HARRISBURG, Dec. 9 – Centre County state Rep. Scott Conklin has introduced a two-bill package aiming to enact a pair of business tax reforms that he says could provide revenue alternatives to help end Pennsylvania's current state budget impasse.

 

Conklin's legislation, H.B.1757, would eliminate the current vendor discount which is a practiced utilized by Pennsylvania retailers. It allows retailers to retain 1 percent of the sales tax they send to the commonwealth if it is transferred on time. Conklin said the elimination of this practice could provide up to $85 million in yearly revenue.

 

"We're missing out. Point blank," Conklin said. "Failing to collect revenue from two sources that are right at our fingertips is a missed opportunity."

 

Additionally, Conklin has introduced a bill, H.B. 1758, that would implement a business tax policy called combined reporting by closing the so-called Delaware Loophole. The term was coined to describe a legal tax planning practice of multi-state corporations to reduce their Pennsylvania tax liabilities by transferring the ownership of intangible assets to an affiliated company in Delaware.

 

Conklin said that if enacted, the state would be projected to receive up to $700 million in new revenue by the 2018-19 fiscal year.

 

"Not one penny, not one dime of that would come from you, me or any Pennsylvanian," Conklin said. "My bills would avoid going into the pockets and pulling on the purse strings of the middle class.   

 

"It is time to consider new methods of generating revenues rather than those that have not seen movement thus far."

 

Conklin noted the introduction of these bills comes on the heels of a recently announced 'budget framework' for the current fiscal year which does not include a severance tax on Marcellus Shale natural gas drilling.

 

"I'm concerned that we're teetering on a slippery slope. If we back away too far from big businesses paying their fair share, who is next in line to pick up the tab? We have great funding needs and the money for them shouldn't come from the working class," Conklin said.