Business Taxes

Pennsylvania Business Taxes

Corporate Net Income Tax (Form RCT-101)Imposed on C Corporations, Joint Stock Associations, Business Trust and any entities classified as a corporation for federal tax purposes.Pennsylvania follows Federal Check-the Box rules for LLCs

Apportioned federal taxable income before NOL and special deductions (line 28) with Pennsylvania additions and subtractions

Credits available for new job creation, education improvement, research and development, investment in a Keystone Opportunity Zone.Affiliated corporations that file a consolidated federal return must file separate Pennsylvania returns for a member company doing business in Pennsylvania.

Capital Stock/Foreign Franchise Tax (Form RCT-101)Imposed on Corporations (both Subchapter C and S), Joint Stock Associations, Business Trust, LLCs, and any entities classified as a corporation for federal tax purposes.

Capital stock value of corporations doing business in Pennsylvania. Capital stock value is based on a company’s average net income and net worth.

See Comments

The rate for 2008 is 2.89 mills. The rate will be reduced by one mill each year thereafter until the tax is eliminated. This tax will expire with regard to taxable years beginning after 12/31/2010.Assets used in manufacturing, processing, and research and development activities are exempt.

Sales and Use Tax

Retail sales of tangible personal property and some services. Exemptions for resale; isolated or bulk sales; goods used in manufacturing, processing, or research and development.

Unemployment Compensation Tax

The first $8,000 of wages paid to each employee.

Total New Employer rate:

Total Standard rate:

 3.7030%

5.9632%

Rates listed are for calendar year 2008 and are for non-construction employers.

Real Property Tax

Assessed Value (Fair Market Value x Assessment ratio)

Assessed value is determined by the County Real Estate Tax Assessor. 

Each county has a different assessment ratio.

 Generally, each township collects real estate taxes on behalf of itself, the county, and the local school district.

Realty Transfer Tax

The value of property transferred within Pennsylvania

Most localities impose 1% in addition to the state; however, certain cities and municipalities impose more than 1%.

Local Sales Tax

Retail sales (Philadelphia and Allegheny County only)

Local Gross Receipts Tax

Local Earned Income Tax and Net Profits Tax

Personal Income Tax Imposed on partnerships, S corporations, business trusts and limited liability companies that are not taxed as corporations for federal purposes.

State taxable income