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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2023 - 2024
Regular Session
MEMORANDUM
| Posted: | June 7, 2023 11:31 AM |
|---|---|
| From: | Senator Devlin J. Robinson |
| To: | All Senate members |
| Subject: | Reduction of the Mutual Thrift Institutions Tax |
| In the near future, I intend to introduce a proposal to reduce the Mutual Thrift Institutions Tax (MTIT) and place it on a similar reduction schedule to the Commonwealth's Corporate Net Income Tax (CNIT), which was passed with bipartisan support last session. The tax reform package enacted as part of the 2022-2023 budget included a long overdue reduction to the state’s Corporate Net Income Tax rate to 8.99% with a reduction schedule to 4.99% over the course of nine years. While I applaud this historic change, I believe that mutual bank institutions should be granted the same relief. The MTIT tax rate is currently set at 11.5% and applies to the institution’s total of net earnings received or accrued from all sources during the tax year. Pennsylvania’s mutual thrift institutions are locally operated and invest directly in their local communities through accessible and affordable home mortgages, small business loans, and relationship savings banking. Making the MTIT rate consistent with the corporate net income tax would benefit local communities and drive Pennsylvania’s economy. To that end, my proposal includes an immediate drop to 8.99% and then a scaled reduction every January 1 until we reach 4.99%, as it was enacted for the CNIT in Act 53 of 2022. My proposal also expands the net operating losses look-back period from only three years to a more appropriate ten years. At a time when bank liquidity is crucial to survival, it is vital that we provide relief to the institutions who are the economic hubs of our main street communities. The benefits of a more simple and fair tax code will benefit the residents of local communities across Pennsylvania who rely on mutual banks for access to capital to support their families and grow their businesses. Please join me in supporting this proposal to empower Pennsylvania’s mutual banks in their efforts to give back to their local communities. |
Introduced as SB858
Memo Updated: June 7, 2023 11:32 AM