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Pennsylvania Tax Law

Pennsylvania residents are responsible for paying both federal and state taxes. There are numerous taxes covering every aspect of life in the United States from property taxes to income taxes. Some of these taxes may not be obvious to you until it’s too late and a tax collector audits you for failing to pay your dues. At the same time, you could be missing out on opportunities to reduce your tax burden without knowing it.

Whether you live in Philadelphia, Pittsburgh or Scranton, you’ll need to account for the various state and federal taxes in your budget, including everyday sales and gasoline taxes. It can be easy to get lost in all of the taxes you’ll owe. LawInfo’s Pennsylvania tax law articles can help you become familiar with the various taxes to avoid penalties.

Pennsylvania Income Tax Rates

Pennsylvania imposes a simple, flat personal income tax rate of 3.07 percent for all resident and nonresident individuals, married couples, partnerships, trusts, estates, business trusts, S corporations and federal corporation tax-exempt limited liability corporations. The types of income the state taxes include:

  • Net gains/income from intellectual properties (copyrights and patents), royalties, rents and the dispositions of property.
  • Net profits from business, farm or professional operations.
  • Estate or trust income.
  • Winnings from gambling or lotteries.

Property Tax and Rent Rebate Program

Certain homeowners or renters whose special circumstances or age pose financial strain can apply for Pennsylvania’s Property Tax/Rent Rebate Program. To qualify, you must be a homeowner with an income of less than $35,000 or a renter with an income of less than $15,000. Half of your Social Security income is automatically exempt from your income qualifications. Additionally, you must be at least one of the following:

  • Age 65 or older.
  • A widow or widower age 50 or older.
  • A disabled person age 18 or older.

You can receive up to a $650 rebate depending on your income.

Pennsylvania Sales and Use Taxes

Sales and use taxes are applied to the purchase of goods and services in Pennsylvania. Use taxes are similar to sales taxes but are applied to goods and services bought from a non-Pennsylvania vendor and used in the state. Pennsylvania’s sales and use tax rate is six percent as of 2017. An additional one percent is added to purchases in Allegheny County and two percent is added in Philadelphia.

A person who occupies a hotel room or rents an apartment, room or house through online or third-party brokers like Airbnb for less than 30 days must pay a hotel occupancy tax of six percent.

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