STATE RANKING #16

Quick facts: 

-Pennsylvania has a flat income tax.

Pennsylvania has the most local taxing jurisdictions than another other state.

3.07%

State Income Tax

State
Income
Tax

9.99%

Cost of Setting Up A Business

state
business
tax

HIGH

Property
Taxes

6.34%

Sales
Tax (average)

State Income Taxes in Pennsylvania

The state of Pennsylvania is one of few states with a flat individual income tax. Pennsylvania’s rate is 3.07%.

Local & City Income Tax – Similar to Ohio Kentucky, Pennsylvania also has Local & City income tax rates in addition to the 3.07% state tax rate. The Local & City tax rates vary from 1.00 to 3.4% depending on the jurisdiction (the average is 1.21%.)

Note: Pennsylvania has the most local taxing jurisdictions in the country with approximately 2,978 different taxing jurisdictions.

State Business Taxes in Pennsylvania

The state of Pennsylvania has one of the highest business income tax rates in the country at 9.99%.

Sales Taxes in Pennsylvania

Like many states, Pennsylvania has multiple sales tax rates. One at the state level and another at the local level. The state rate is 6.00% and the average local rate is 0.34% (total average rate for Pennsylvania Sales Tax is 6.34%).

Property Taxes in Pennsylvania

The average property tax rate for residential property in the state of Pennsylvania is 1.51%, making it an awfully expensive place to own property. 

Inheritance tax in Pennsylvania

Pennsylvania is one of only 6 states in the country that has an inheritance tax. Pennsylvania’s inheritance tax affects lineal heirs, but not spousesLearn more here.

Unemployment taxes in Pennsylvania

Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:

  • Wage Base – Pennsylvania has a wage base of $10,000 for 2020
  • UI Rates – range from 0.15% to 11.03%, which is quite high.
  • Schedules – Pennsylvania has multiple schedules regarding UI.

Pennsylvania Business Entities - LLCs

Pennsylvania is an inexpensive state to to set up your LLC. Here are some important facts:

  • Pennsylvania’s LLC $70 fee is Decennial (paid once every 10 years).
  • When you register with the state, you pay a one time fee of $125
  • Secretary of State of Pennsylvania website – click here
  • If you would like help setting up your LLC, we recommend using IncFile.com. They are simple and easy to use.

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