Types of Taxes in Pennsylvania
Taxes pay the operating expenses of the body, usually a government, that levies them. Since 1929, the Pennsylvania Department of Revenue operates and administers the commonwealth's tax laws and the collection of its state taxes. Pennsylvania collects taxes from corporations, utilities and other entities, but individuals pay most of the taxes the state mandates.
Other People Are Reading
-
Personal Income Tax
-
The state imposes a personal income tax on residents' and nonresidents' income, as well as on estates, trusts, and certain business structures. A the time of publication, the tax rate is 3.07 percent. The state collects these taxes through employer withholding; estimated withholdings by partnerships and S corporations; and estimated payments and final payments from individual taxpayers. Although Pennsylvania doesn't allow standard deductions or personal exemptions like the Internal Revenue Service, or IRS, does, taxpayers can claim other types of deductions as well as tax credits and exclusions. Local governments in Pennsylvania also have the power to levy taxes on personal income.
Real Estate Taxes
-
Two primary types of real estate taxes exist; the more familiar is property tax, which Pennsylvania counties and municipalities collect to pay their portions of public education costs and other services. These tax rates vary by location. The state itself imposes a transfer tax when the ownership of real estate passes from one individual or entity to another. At the time of publication, the real estate transfer tax is one percent of the purchase price. Both the buyer and seller pay the tax, so for each real estate transaction, the commonwealth collects a total of two percent of the purchase price.
-
Sales Taxes
-
Pennsylvania levies taxes on retail sales and rentals, business services, purchases taxpayers make in other states and hotel stays of less than 30 days. At the time of publication, the tax rate is six percent, with an additional one percent mandated by law in Allegheny County and an additional two percent in Philadelphia. Some food, clothing and other products are exempt from sales tax. Such products as cigarettes, malt beverages and liquor are subject to additional taxes.
Inheritance Tax
-
When an individual leaves an estate to his beneficiaries upon his death, the state taxes the value of the estate according to sliding scale. At the time of publication, the scale ranges from a 4.5 percent tax to 15 percent, depending on the relationship of the heirs to the decedent -- that is, the person who died. There is no transfer tax on estate transfers to a spouse or to a parent from a minor child.
Fuel Taxes
-
The state imposes gas and diesel taxes, motor carriers road tax and alternative fuels tax on drivers. At the time of publication, gas tax is 32.1 cents per gallon, and diesel tax is 38.1 cents. Motor carriers, like truckers, pay their motor carrier road tax at the same rate as gas and diesel taxes. Alternative fuel tax is for non-liquid fuel, including electricity. Use of alternative fuels converts to a gas equivalent and taxed at the same rate as gas. Most fuels are subject to an additional 12 cents per gallon liquid fuels and fuels tax.
Corporate Taxes
-
Business entities are subject to numerous taxes, including capital stock; corporate net income tax; employer withholding tax; a gross receipts tax; and, for public utilities, a realty tax imposed in place of realty transfer tax.
-
References
- Pennsylvania Deaprtment of Revenue: Tax Types
- Pennsylvania Deaprtment of Revenue : Personal Income Tax
- Pennsylvania Deaprtment of Revenue: Sales, Use And Hotel Occupancy Tax
- Pennsylvania Deaprtment of Revenue: Inheritance Tax
- Pennsylvania Deaprtment of Revenue: Cigarette Tax
- Pennsylvania Deaprtment of Revenue: Malt Beverage Tax
