Unlike some states, Pennsylvania does NOT levy a property tax on tangible personal property, machinery, or equipment. Additionally, machinery and equipment used directly in the manufacturing process is exempt from state sales tax.
The following is a summary of the most common Pennsylvania business taxes.
Personal Income Tax (PIT)
- Levied against the taxable income of resident, non-resident individuals, estates and trusts, partnerships, S corporations, and LLCs
- The current rate is 3.07% (note: retirement income is not subject to Pennsylvania state income tax)
Corporate Net Income Tax (CNI)
- Levied on domestic and foreign corporations doing business, carrying on activities, having capital or property employed or used in Pennsylvania, or owning property in Pennsylvania
- Levied against federal taxable income without the federal net operating loss deduction
- The current rate is 8.99% REDUCED FROM 9.99% in 2022 (0.5% reduction for each subsequent year until the rate is 4.99%)
Real Estate Transfer Tax
Imposed on the real value of property, including contracted improvements, transferred by deed, instrument, long term lease, or other writing
The current rate is 2.0% (1% to State, 1% to County)
Sales & Use (SUT) and Hotel Occupancy Tax
- Levied on the retail sale, consumption, rental, or use of tangible personal property (note: non ready-to-eat foods, certain wearing apparel and residential heating fuels including, fuel oil, natural gas, coal, electricity, and firewood are exempt from tax). Machinery and Equipment used DIRECTLY in the manufacturing process is also exempt from sales tax.
- Collected and remitted by those engaged in the making the taxable sale
- Hotel Occupancy Tax levied on room rental charges for periods of less than 30 days by the same person
- The current SUT and Hotel Occupancy Tax rate is 6.0%
Unemployment Compensation Tax (UC)
- Paid on the first $10,000 of wages for each employee on an annual basis
- Mandatory coverage of employees engaged in the “regular course” of the employer’s business
- Certain occupational classes are excluded
Source(s): Pennsylvania Department of Revenue and Pennsylvania Department of Labor and Industry
Other Taxes of Importance
Not all taxes are universally levied. Depending on the locality there could be other taxes that are administered. View detailed taxes and rates >
- Real Estate Tax – Levied on the County, Municipal, and School District level. On average, real estate taxes in Franklin County are roughly 1.0% – 1.5% of fair market value of the property.
- Earned Income Tax
- Local Services Tax (LST)
- Per Capita Tax
- Amusement Tax