Pennsylvania Department of Community and Econmic Development

Pennsylvania Department of Community and Economic Development

Tom Corbett, Governor

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Tax Information

Local Taxes

Pennsylvania’s local governments impose a variety of local taxes that businesses need to understand. Oftentimes, these taxes must be withheld from employees’ payroll checks. Use the chart below to find information about specific local taxes.

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The Local Services Tax
(formerly the Emergency and Municipal Services Tax)
2008 Municipal Tax Rates
School Property Taxes Installment Payment of School Property Taxes
EIT Collection Reform Initiative DCED's EIT Collection Initiative
Property Tax Relief
(Homestead and Farmstead exclusions)
Property Tax Relief
General questions about withholding of local taxes Pennsylvania Institute of Certified Public Accountants (PICPA)
The Local Tax Register FAQs for Using the Local Tax Register

Business Taxes

Tax
Base
Rate
Comments
Corporate Net Income Tax
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 9.99% 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
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. 2.89 mills (2008) 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 Gross sales price. 6% 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) Varies by locality 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 1% 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) 1% Follows state provisions
Local Gross Receipts Tax Imposed by certain localities Varies by locality  
Local Earned Income Tax and Net Profits Tax Imposed by certain localities Varies by locality  
Personal Income 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> 3.07% Flate rate

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The page was last modified: 08/31/2012