In Central Pennsylvania, state and local business taxes are headed in the right direction—downward. 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
- Manufacturers with a facility located in Pennsylvania are exempt from taxation of property that is purchased for incorporation into products.
- Materials or supplies that are used predominately and directly to produce product are also exempt.
- Reduced or eliminated taxation through our Keystone Opportunity Zone (KOZ) program
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 specific period of time.
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 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: