Pennsylvania ranks 5th worst on corporate tax study


Pennsylvania finished 46th in a study by the Tax Foundation examining how well states have structured their corporate income tax systems in 2020.

The state’s ranking dropped one position from its 2019 score, according to the foundation’s analysis, which is part of a wider study titled “2020 State Business Tax Climate Index.”

The corporate tax ranking measures each state’s primary levy on business activities. Some states take a cut of businesses’ gross receipts, which the Tax Foundation sees as more economically harmful, while the majority of states tax corporate profits – the amount in receipts after most business expenses, including the cost of the items they sell, are deducted.

The analysis also looked at how corporate tax systems deal with net operating losses, whether machinery and equipment purchases can be deducted and whether corporate income tax brackets are indexed for inflation.

How Do States Rate on Corporate Income Taxes?