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Lower Macungie Township Administration Building
3402 Brookside Road
Macungie, PA 18062
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Phone: (610) 965-9933
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Topton Borough Hall
205 S Callowhill St.
Topton, PA 19562
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160A East Wing
Harrisburg, PA 17120-2134
Phone: (717) 787-1000
Fax: (717) 782-2893
Mackenzie Supports Bill to Close ‘Delaware Loophole’ and Reduce Tax Rate for PA Businesses
HARRISBURG – In a bipartisan effort to create a more competitive and fair business climate in Pennsylvania, state Rep. Ryan Mackenzie (R-Berks/Lehigh) today voted in favor of legislation that passed the House to close the “Delaware Loophole” and implement necessary business tax reforms in the Commonwealth.

For more than five years, the Delaware Loophole has garnered significant attention and has been criticized as a flaw in Pennsylvania’s business tax structure. The term was coined to describe a legal tax avoidance practice used by some multi-state corporations to reduce their Pennsylvania tax liabilities by transferring the ownership of intangible assets to an affiliated company in Delaware.

Under House Bill 440, the only businesses that would be affected are those that are taking advantage of the loophole for the sole purpose of tax avoidance in Pennsylvania.

The national median Corporate Net Income Tax rate is approximately 7 percent, which means Pennsylvania is nearly 3 percent above the median rate. A report, “Location Matters,” issued last year by the Tax Foundation and Klynveld Peat Marwick Goerdeler (KPMG) ranked Pennsylvania dead last in state tax costs on businesses. This report confirmed that the Commonwealth’s business tax burden is hampering its job growth.

“All levels of government talk about creating and retaining more jobs in Pennsylvania. By closing the Delaware Loophole and lowering the corporate tax rate from 9.99 percent to 6.99 percent, Pennsylvania will create a more hospitable business environment for companies to successfully start up and maintain business,” said Mackenzie, vice chairman of the House Labor and Industry Committee.

House Bill 440 garnered more than 50 co-sponsors from both political sides and heads to the Senate for consideration. For more legislative information, visit Mackenzie’s website at or follow his legislative Facebook at

Representative Ryan Mackenzie
134th District
Pennsylvania House of Representatives

Media Contact: Lauren Whetzel
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