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Tax Summary
- Pennsylvania has a flat income tax rate of 3.07% with no personal exemptions.
- The state taxes eight classes of income:
- Compensation
- Net business profits
- Net gains from rents, royalties or patents
- Net gains from sale of property
- Dividends
- Interest
- Gambling and lottery winnings (except Pennsylvania lottery)
- Net gains or income from estates or trusts
- Sales tax in Pennsylvania is 6% taxable items. Exempt items include most groceries, clothing that is not a luxury, drugs, textbooks, and heating fuels. This has given rise to the term "luxury tax," because taxed items are items such as fine dining, fur coats (but not wool coats), and caviar (but not fish sticks)
- Allegheny County and Philadelphia impose an additional 1% tax
- Excise tax on cigarettes in Pennsylvania is $1.35 a pack
- Property taxes are not levied by the state of Pennsylvania, but they are levied by counties, municipalities and school districts.
- County assessors are in charge of tax assessment and collection based on millage.
- Some taxpayers qualify for a Property Tax and Rent Rebate Program.
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