PA Taxes      PA Tax Credits and Financial Incentives

Pennsylvania Taxes

Corporate Income Tax

• The tax rate is 9.99% on net income.

Capital Stock/Franchise Tax

• 5.99 mills (2005) of capital stock value
• The franchise tax is being phased out, with the rates set as follows: 5.99 mills for 2005; 4.99 mills for 2006; 3.99 mills for 2007; 2.99 mills for 2008; 1.99 mills for 2009; and .99 mills for 2010
• The tax will expire at the end of 2010.
• Broad exceptions apply for manufacturing and utility research and development and processing.

Personal Income Taxes

• Flat rate of 3.07%

State Sales Taxes

• 6% (food; clothing, heating fuels, prescription and non-prescription drugs exempt). Philadelphia imposes an additional 1%.

Real Property Taxes

• County, municipal and school districts determine the amount of property tax to be paid.

Gross Receipt Taxes

• 50 mills
• Electric Suppliers -- 44 mills with Revenue Neutral Reconciliation (RNR) rate subject to change annually.

Public Utility Realty Tax (PURTA)

• Rate set annually to raise required Realty Tax Equivalent (RTE) revenue
• An additional 7.6 mills was levied on state taxable value in 1998 and thereafter for deposit into the Public Transportation Assistance Fund

Insurance Gross Premiums Tax

• 2% plus any retaliatory tax
• 3% surplus lines tax rate is imposed on policies written with unlicensed non-life insurers
  Corporate Loans Tax
• Includes Cooperative Agricultural Association and Electric Cooperative Corporation Taxes
• 4 mills on indebtedness

Pennsylvania Tax Credits and Financial Incentives

Keystone Opportunity Zones (KOZ)
State and local taxes are reduced to almost zero through credits, waivers, and comprehensive deductions. The tax abatements, depending on the zone, could remain in effect until 2018. There are 12 regional zones that encompass more than 37,000 acres.

10 Year Philadelphia Real Estate Tax Abatement in the City of Philadelphia
Any business property owner making land or building improvements will receive a 10-year City real estate tax abatement on 100% of the value added by their improvement, beginning upon completion of construction. Applications for this program must be filed within 60 days of the issuance of a building permit. For more information on how to apply, visit the “Abatements” at the Board of Revision of Taxes Web site.

Additional Pennsylvania Tax Credits and Financial Incentives:

• Job creation and job retention loans
• Machinery and equipment loan fund (MELF)
• Export finance program (EFP)
• Industrial sites reuse program (ISRP)
• Keystone innovation zone program grants (KIZ)
• Small business first
• PA minority business development authority (PMBA)
• PA infrastructure investment authority (PENNVEST)
• Underground storage tank upgrade loan program (USTULP)
• Community economic development loan program (CED)
• Pollution prevention assistance account (PPAA)
• Enterprise zone tax credits community investment
• PA Capital Access Program (PennCAP)
• Tax-exempt and taxable bond programs
• Research and development tax credits
• Technical assistance and technology investments

For more information, visit:
Pennsylvania Department of Revenue
Federal Tax Information
www.inventpa.com

Source: Pennsylvania Department of Revenue

The information on Pennsylvania Taxes is subject to change. The data presented on this Web site may not be accurate or current. Visit the Pennsylvania Department of Revenue for the more accurate and current information.