Simmons Supports Bill to Close Delaware Loophole and Reduce Tax Burden for Job Creators

HARRISBURG – Seeking to improve Pennsylvania’s business climate and spur job growth, state Rep. Justin Simmons (R-Lehigh/Northampton) has co-sponsored House Bill 440, which was approved this week by a bipartisan majority in the House of Representatives. The legislation would close the so-called Delaware Loophole and gradually reduce the state’s Corporate Net Income (CNI) Tax.

“For far too long, Pennsylvania has had the reputation of being one of the worst places in the country to do business,” said Simmons. “I co-sponsored and voted in support of this legislation because it helps to level the playing field and, as a result, encourage companies to expand or locate here and create badly-needed new jobs in the process.”

House Bill 440 would reduce Pennsylvania’s current CNI Tax to 6.99 percent. It currently stands at 9.99 percent, which is the highest flat rate in the country and the second highest overall business tax. Many companies seek to avoid the high tax by creating a shell company in a tax-haven state like Delaware, thereby taking advantage of what is referred to as the “Delaware Loophole.”

More than 70 percent of companies located in Pennsylvania that are subject to the CNI Tax currently pay no tax. The reduction would take place over a period of 10 years, beginning in 2015.    

The measure would also uncap the Net Operating Loss (NOL) deductions businesses may take.
Other reforms included in the bill would support Pennsylvania’s small businesses, encourage new investments in existing businesses and promote the development of new start-up companies.

“House Bill 440 takes a comprehensive, commonsense approach to reforming Pennsylvania’s business tax structure,” said Simmons. “Improving our state’s economy and stimulating job growth are priorities of mine. This legislation will go a long way toward achieving those goals.”

The bill will now advance to the state Senate for debate and consideration.  

For more information on Simmons and his legislative priorities, visit or

Representative Justin Simmons
131st District
Pennsylvania House of Representatives
Media Contact:  Andy Briggs