Business taxes in Pennsylvania are headed in the right direction—down! Current improvements include successive business tax cuts, workers’ compensation reform, and electric deregulation and regulatory reform.

• At 3.07%, Pennsylvania has one of the lowest personal income tax rates in the country.

• Moreover, Pennsylvania’s local property tax burden is also well below average--86% of the national average based on personal income. Pennsylvania does not impose a state tax on real or personal property.

• In addition, Pennsylvania has socked away almost $664 million in its Rainy Day Fund to avoid tax increases if there are economic downturns in the future.

• Keystone Opportunity Zones – Tax Free Locations
  The Keystone Opportunity Zone program is providing a once-in-a-lifetime opportunity to develop, construct or renovate with greatly reduced or completely eliminated state and local taxes through 2010 or 2013.  To search for property in our region, try our Available Property Search.

These improvements in the business climate complement Pennsylvania’s 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’re comparing state spending, state tax burdens, or combined state and local tax burdens, the latest data shows Pennsylvania’s fiscal burden is in the bottom third of the nation in relation to personal income.

View details on Municipal and County taxes.

View details on Pennsylvania Business Taxes.
 

State Taxes

The primary sources of tax revenue at the state level are the Sales and Use Tax, the Personal Income Tax and the Corporate Net Income Tax. Other state taxes of interest to business include the Capital Stock and Franchise Tax, the Realty Transfer Tax and the Utility Gross Receipts Tax. In addition, like all other states, Pennsylvania requires employers to pay Unemployment Compensation taxes and to purchase workers’ compensation insurance.
 

Property Tax

The property tax is the primary source of revenue at the local level. Pennsylvania’s 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 relatively unique feature of Pennsylvania’s tax system compared to other states. Other local taxes of interest to business include the earned income tax, the business gross receipts tax and the realty transfer tax. It should be noted that not all local taxing jurisdictions impose the earned income tax and/or the business gross receipts tax. Local tax reform at the county level is also under way.