Pennsylvania Taxes

The Pennsylvania Department of Revenue (DOR) is responsible for collecting all Pennsylvania taxes, including all corporate taxes and taxes on inheritance, personal income, sales and use, realty transfer, motor fuel, and all other state taxes.

Pennsylvania has a flat income tax rate of 3.07% that is the lowest of all eight states with this type of system. The statewide sales tax rate is 6%. Current improvements on Pennsylvania state taxes include:

  • Successive business tax cuts
  • Workers compensation reform
  • Electric deregulation and regulatory reform

Pennsylvania taxes are not only improving, but already offer below-average taxation and special tax benefits to businesses throughout the state. Some of the existing taxation benefits in Central Pennsylvania include:

  • One of the lowest personal income tax rates in the country: 3.07%
  • A property tax burden 14% below the national average, based on personal income
  • No Pennsylvania state tax imposed on real or personal property
  • Pennsylvania keeps a nearly $664 million in its Rainy Day Fund to avoid tax increases during times of economic downturn
  • Reduced or eliminated taxation through our Keystone Opportunity Zone program

Income Tax Rate

3.07%

State Gasoline Tax Rate (cents per gallon)

58.7¢

Property Taxes Paid as a Percentage of Owner-Occupied Housing Value

1.48%

State and Local Individual Income Tax Collections per Capita

$1276

Corporate Income Tax Rate

9.99%

Local & School Tax Rates

State Sales Tax Rate

6.00%

Keystone Opportunity Zones (KOZs)

Providing a once-in-a-lifetime opportunity to develop, construct or renovate properties throughout Central Pennsylvania, the Keystone Opportunity Zone program offers greatly reduced or completely eliminated state and local taxes through a time period of multiple years. To learn more about the Keystone Opportunity Zone program, click here. Or, to search for available, KOZ-eligible properties in Central Pennsylvania, click here.

Pennsylvania State Taxes

Primary sources of tax revenue at the state level are the sales and use tax, personal income tax and corporate net income tax. Other state taxes include the capital stock and franchise tax, the realty transfer tax and the utility gross receipts tax. In addition, Pennsylvania requires employers to pay unemployment compensation taxes and to purchase workers’ compensation insurance.

Pennsylvania Property Taxes

Pennsylvania’s property tax is the primary source of revenue for local government. The state constitution requires that all taxes be uniform on all subjects of taxation. As a result, the rate of taxation on business property is the same as the rate on residential property, which is a unique feature of Pennsylvania’s state tax system.

Other Taxes

Other local taxes include the earned income tax, business gross receipts tax and realty transfer tax. Not all local taxing jurisdictions impose the earned income tax and/or business gross receipts tax. Local tax reform at the county level is also underway.

More Pennsylvania Tax and Government Information

Pennsylvania maintains a tradition of fiscal responsibility. In addition to a constitutional mandate to balance its budget, taxes and spending in Pennsylvania are below the national average. Whether you are comparing state spending, state taxes or combined state and local taxes, the latest data reveals that Pennsylvania’s fiscal burden is in the bottom third of the nation in relation to personal income.

For more information on financials in Pennsylvania, visit the links below:

  • Municipal and County TaxesThis link provides the municipality and school district for a particular address. Additionally, the report provides a listing of tax levies for the municipality and its coterminous school district. To find Withholding Rates and PSD codes for a particular municipality and its coterminous school district, click here.

 

  • Business Taxes and Incentives: Pennsylvania offers a variety of tax incentives, credits and programs to eligible Pennsylvania residents and businesses. These tax credits, economic development programs refund/rebate opportunities and incentive programs provide economic assistance and tax reductions to individual and business taxpayers