Posted: | January 4, 2013 02:31 PM |
---|---|
From: | Representative Bryan Cutler |
To: | All House members |
Subject: | Abolishing the Corporate Loan Tax |
The Corporate Loans Tax was part of a larger tax system in the Commonwealth that included the county personal property tax. All aspects of this tax system have been repealed except for the Corporate Loans Tax. In the near future, I will be introducing to eliminate the Corporate Loans Tax. The Corporate Loans Tax impacts about 7,000 taxpayers in the Commonwealth. Generally speaking banks, LLCs and other corporations are impacted but individual residents may also be subject to this tax under certain circumstances. The Corporate Loans Tax is only applicable to resident individuals and non-Pennsylvania corporations if the treasurer is located in the Commonwealth. The issuer of a bond (the borrower) is required to withhold 4 mills from the interest that is earned by the lender. The lender then is required to pay Personal Income Tax or Corporate Net Income Tax on the amount of interest earned. While several types of debt are exempt from the Corporate Loans Tax, the tax may impede the development or expansion of business in the Commonwealth. An example of someone that would be subject to the Corporate Loans Tax is an individual who “flips” homes. Often times the individuals who take dilapidated buildings, renovate them and then resell them do not get them same financing as an individuals who are not “flipping” these buildings. Individuals who “flip” buildings often receive loans in the form of bonds from private individuals who are looking to make an unconventional investment; subjecting these funds to an additional tax limits the availability of these funds and greatly impacts the rejuvenation of our communities. Please join me in co-sponsoring this initiative. |
||
View Attachment |
Introduced as HB78