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What taxation systems exist in Pennsylvania currently?

Updated: 8/21/2019
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Three types of tax are collected in Pennsylvania: property taxes, income taxes, and sales taxes.

Property Taxes In Pennsylvania, local governments (counties, municipalities, school districts, etc.) administer property taxes. These localities only collect taxes on real estate (not personal property like vehicles). Property value is determined by the county assessor and tax bills are calculated using millage rates. One mill is equal to 1/1,000 of $1, so at a rate of 1 mill, you would pay $1 in tax for every $1,000 of assessed property value. Each locality has its own millage rate, but rates cannot exceed 30 mills (or $30 per $1,000 of assessed value) without court permission.

Property Tax/Rent RebateThe Property tax/rent rebate program gives rebates for property taxes already paid (either by homeowners or renters). In order to qualify you (or your spouse) must be 65 years or older; a widow or widower age 50 or older; or 18 years or older and permanently disabled. In addition, your annual income cannot be more than $35,000 (excluding half of social security income). Depending on your income and where you live, your total rebate can be as much as $975. In order to receive a rebate you have to file Form PA-1000 by June 30th.

Income TaxesPennsylvania is one of only seven states with a flat tax system, assessing 3.07% in tax regardless of income. Pennsylvania does not allow the same deductions that are itemized on your federal return, limiting your deductions to: unreimbursed employment related expenses, medical savings account contributions, and college savings account contributions. A tax forgiveness credit is available to low income filers.

Additional Taxes in Pennsylvania

Sales Taxes : 6%, although cutting the state sales tax to 4% is being considered. Exempt items include: food, clothing, text books, heating fuels, and prescription and non-prescription drugs. Allegheny County adds a 1% local sales tax and Philadelphia adds a 2% local sales tax.

Gas Taxes: 32.2 cents/gallon on unleaded and 39.2 cents/gallon on diesel.

Cigarette Taxes: $1.60/pack of 20.

Hotel taxes: same as the sales tax rates

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Q: What taxation systems exist in Pennsylvania currently?
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