PA Taxes
PA Tax Credits and Financial Incentives

Pennsylvania Taxes

Philadelphia Business Privilege Tax News

Mayor Nutter's Administration is committed to aggressively reducing tax rates for businesses and employees across all sectors of the economy. Due to the City of Philadelphia's budget deficit, the plans to continue lowering the Business Privilege Tax (BPT) have been delayed. The BPT is currently at 1.41 mills of gross receipts and 6.45% on taxable net income.

The City's wage tax rates were lowered in July, 2010 to 3.92 %for residents and 3.49% for non-residents working in the City.

Corporate Income Tax

• The tax rate is 9.99% on net income. 
• Allocation factors in 2009 were 83% sales, 8.5% property and 8.5% payroll. In 2010 the sales factor are to 90%, the other two factors are 5% each.
• Net operating loss - greater of 3 million or 20%.

Capital Stock/Franchise Tax

• In 2009-2010 PA increased the CSFT to 2.89 mills for three years - 2009, 2010, 2011.
• In 2012 the rate will be reduced to 1.89 mills; then to .89 mills in 2013; and finally to 0 mills in 23014. An exemption for mfg. industries is provided.

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 2%.

Real Property Taxes

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

State Gross Receipts Taxes

• Pennsylvania does not have a state-level gross receipts tax.

Public Utility Gross Receipts Taxes

• 50 mills on telecommunication services.
• Electric, water and hydroelectric corporations - 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.

Liquid Fuels Tax

• Gasoline and gasohol - $0.312/gallon.
• Diesel and kerosene - $0.381/gallon.
• Aviation gasoline - $0.054/gallon.
• Jet fuel - $0.016/gallon. 

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 on the City of Philadelphia's 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

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.