Pa. House Passes Bill To Close 'Delaware Loophole' For Business Taxes

By Tony Romeo

HARRISBURG, Pa. (CBS) - The Pennsylvania House has passed and sent to the Senate a bill that would reform corporate taxes in the state.

Supporters say the bill would offset a reduction in corporate net income tax rates by cracking down on companies that have headquarters or subsidiaries in Delaware and use that state's tax-friendly policies to avoid paying Pennsylvania levies.

But, Allegheny County Democrat Frank Dermody, the House minority leader, complained that the bill will not do that.

"It doesn't close the 'Delaware Loophole'," Dermody said. "It is not about tax fairness."

Allegheny County Republican Mike Turzai, the majority leader, insists that the measure will close the so-called 'Delaware Loophole,' "And ultimately begins in a slow fashion to reduce the rate so that we're competitive with other states."

The bill passed the House with bi-partisan support and now goes to the Senate. A similar bill passed the House last year, but did not clear the Senate before the two-year session ended in November.