If we act now and act quickly, we can position Pennsylvania to be number one in adopting a single sales factor, proactively approaching the issue before our neighboring states. Mann, who has gained bipartisan support for the bill, talked about why a single sales factor would be good for Pennsylvania. As a former small-business owner, I know that a business must grow to survive. It must seek markets both near and far. This is referred to as a multi-state business and the taxation of these businesses is complicated.
Taxation is apportioned to each state in which it does business.
Under Pennsylvania's present system, taxation is apportioned on the basis of a three-factor formula, which includes sales, property and payroll. According to Mann, this formula penalizes Pennsylvania-based businesses, which see higher tax bills when they expand their business activity and investment in the state. Unfortunately, this has led some corporations to headquarter in other states, where the taxing structure supports expansion. Mann's legislation would base corporate taxes purely on sales, thereby encouraging existing companies to grow and signaling companies that currently only sell products in Pennsylvania to consider making an investment in infrastructure in the state. My bill will let Pennsylvania's corporations know that we stand behind them and want to see them grow and thrive.