The state House on Wednesday passed a bill intended to close the so-called Delaware loophole and reduce corporate net income taxes in Pennsylvania.
House Bill 2150 cleared the chamber by a vote of 129-58 and will now go to the Senate for consideration.
The lead sponsor is Republican Rep. Dave Reed of Indiana County. Democratic Rep. Eugene DePasquale of York County is the leading Democratic sponsor.
The proposal would add an "expense add-back provision" to prevent corporations from reducing or avoiding taxes, beginning in 2013.
Beginning in 2014, the bill would allow for the reduction of the CNI to 6.9 percent at increments of 0.5 percent per year. The tax is 9.9 percent.
HB 2150 also aims to phase out the cap on carrying forward net operating losses in a subsequent tax year and shifting the tax apportionment system to a single-sales factor.
Opposing Democrats prefer a Delaware loophole proposal that would adopt combined reporting, said Bill Patton, a spokesman for House Democrats.
Combined reporting means that corporations and their subsidiaries would be required to jointly file one tax report and pay taxes according to the amount of business activity conducted in Pennsylvania.
The House on Wednesday also unanimously approved HB 1616, a proposal that would allow companies to charter themselves as benefit corps, or B corps. These are for-profit companies that consider societal good in their decision making alongside profit and shareholder value.