Although taxes are a certainty for any business, Pennsylvania offers many financing programs to help companies handle the costs of doing business in today’s world.
Here is a list of several taxes for businesses in Pennsylvania. Other local taxes may apply, depending on where you locate your business.
Visit the Pennsylvania Department of Revenue for more information.
Corporate Net Income Tax (1)
9.99 percent rate.
Net operating loss carryover of up to $1,000,000 a year permitted. Provisions include 100% dividend exclusion, separate-company reporting, Accelerated Cost Recovery System (ACRS) and PA selection. Exemptions for manufacturing, processing, computer software development, research and development, and air or water pollution control.
Sales Tax (2)
6 percent rate.
Selective tax. Business exemptions for manufacturing, processing, farming, dairying, agriculture, horticulture, floriculture or aquaculture and public utilities.
Unemployment Compensation Tax
Tax rates vary per calendar year. For the latest Unemployment Compensation tax rates, visit the PA Department of Labor and Industry.
Rates vary as to experience/type of business. Visit the PA Department of Labor and Industry for the latest rates.
Capital Stock and Foreign Franchise Tax
Rate of 0.45 mills
Tax-exempt activities include manufacturing, processing, research and development, pollution control, and computer software development.
Personal Income Tax (3)
Flat rate of 3.07%. Exemptions are Social Security benefits, pensions and IRA distributions.
(1) S Corporations may choose to be treated like a partnership for Pennsylvania tax purposes and pay the 3.07% Personal Income Tax rather than the 9.99% Corporate Net Income Tax.
Limited Liability Companies that qualify as partnerships for federal tax purposes are treated as partnerships for Pennsylvania tax purposes and pay the Personal Income Tax rather than the Corporate Net Income Tax.
(2) Includes certain business services.
(3) Paid by individuals, business proprietorships, partnerships, and Pennsylvania S Corporations.