Oct. 04, 2023

HARRISBURG – In a late-night vote along party lines, legislation to create new tax incentives for medical marijuana operations and Hollywood movie studios passed the Pennsylvania House of Representatives this week. The bill contained a number of additional controversial provisions, including a complete rewrite of Pennsylvania’s business tax code, creating what some observers called one of the most punitive and aggressive tax proposals in the nation.

In a strongly worded speech on the House floor just prior to the vote, Rep. John Lawrence (R-Chester) ripped into the proposal, pointing out that House members had only hours to review details after they were hastily amended into an unrelated bill earlier in the day.

“What is in front of us tonight? A bill with an onerous new corporate tax plan on businesses in this state. New tax credits for Hollywood movie producers,” said Lawrence. “What is not in this bill? There’s nothing about tax reform for middle class homeowners being taxed out of their homes by school property taxes they can’t afford to pay. Nothing about the gasoline tax. But there are tax breaks for marijuana growers.”

The controversial tax plan was amended into House Bill 1219 earlier Tuesday. As amended, the bill contained a number of provisions, including the diversion of a third of a billion dollars from the state’s General Fund to mass transit operators.

Addressing the House chamber, Lawrence stated, “I want to be clear – this mass transit tax diversion scheme is a standing appropriation, which means it will not be subject to the annual budget process. It is bad governance to spend a third of a billion taxpayer dollars a year on a standing basis outside the normal budget process with no oversight from this chamber. It is a surrender of the constitutional authority of this chamber, a surrender we have regrettably seen in the past and should not repeat this evening.”

The bill would also move businesses in the state to a complex combined reporting tax scheme, and drastically increase authority of the Pennsylvania Department of Revenue.

“This bill clobbers job creators with a difficult to calculate combined reporting requirement that will accomplish one thing – send more businesses out of the state. Talk to the businesses that will be affected by combined reporting. They will tell you it is a nightmare. And this bill gives the Department of Revenue sweeping new authority that will lead to endless audits, inquiries, and litigation.”

Lawrence noted that there were positive elements to the bill, including a provision regarding childcare tax credits that has seen bipartisan support. House Bill 1219 also contained a decrease in the state’s corporate net income (CNI) tax. A similar standalone proposal to cut the CNI saw broad bipartisan support earlier in the week.

“On Monday, members on both sides of the aisle came together on a bipartisan basis to show real leadership to reform Pennsylvania’s tax system,” said Lawrence. “Just one day later, that good work was assigned to the trash can and substituted with a naked partisan proposal that squeaked through the House by a single vote.”

House Bill 1219 goes to the Senate for consideration.

To listen to Lawrence’s remarks on the bill, click here.

Representative John Lawrence
13th District
Pennsylvania House of Representatives

Media Contact: Donna Pinkham