Pennsylvania Tax Guide

Pennsylvania state tax rates and rules for income, sales, property, fuel, cigarette and other taxes that impact residents.

Pennsylvania tax: Overview

Some Pennsylvania state taxes are high compared to other states, including the Commonwealth's gas tax. Property taxes In Pennsylvania are also relatively high when compared to those in other states. Pennsylvania has a flat income tax, which is low when compared to many other states, but local districts can also impose income taxes.

The sales tax in Pennsylvania is average when compared to other states, especially considering many items are tax-exempt. And Pennsylvania's tax on beer is one of the lowest in the country.

[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s gover nment website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]

Pennsylvania income taxes

Pennsylvania tax on retirement benefits: Social Security and Railroad Retirement benefits are not taxed by the state. Income from private employer, government and military retirement plans paid after the taxpayer becomes eligible to retire is tax-exempt.

Pennsylvania Income Tax Range

Pennsylvania has a flat rate of 3.07%. Municipalities and school districts can also impose taxes on wages or income.

Pennsylvania sales tax

Pennsylvania's statewide sales tax rate is 6%, and localities can add up to 2%, according to the Tax Foundation .

• Groceries are tax-exempt.
• Prescription drugs are tax-exempt.
• Diapers and some feminine hygiene products are tax-exempt.

How much are property taxes in Pennsylvania?

In Pennsylvania, the average effective property tax rate is 1.41%, which is higher than in most other states.

Pennsylvania Property Tax Breaks for Retirees

Pennsylvania Property Tax and Rent Rebates: Some homeowners and renters 65 or older may be eligible for property tax or rent rebates through the Property Tax/Rent Rebate Program .

To qualify, residents must meet income guidelines and apply for the rebate.

(Note: Widows and widowers 50 and older and people with disabilities age 18 and older may also qualify for a rebate.)

Pennsylvania motor fuel taxes

• Gasoline: $0.576 per gallon
• Diesel: $0.741 per gallon

Pennsylvania Alcohol and Tobacco Taxes

• Cigarettes: $2.60 per pack
• Other tobacco products: $0.55 per ounce
• Vapor products: 40% of wholesale price
• Beer: $0.08 per gallon
• Wine: $2.50 on direct-to-consumer shipments
• Liquor: State-Controlled (18%)

(Note: Sales tax and local taxes may apply to alcohol and tobacco purchases.)

Pennsylvania estate and inheritance taxes

Pennsylvania's inheritance tax ranges from 0% to 15%. Spouses and parents inheriting property from a child 21 are younger are exempt from paying the tax. Other direct descendants may need to pay a 4.5% tax rate, and siblings are subject to a 12% rate. Unrelated heirs pay a 15% inheritance tax in Pennsylvania (with some exceptions).

Note: This item first appeared in Kiplinger Personal Finance Magazine, contributed by Katelyn Washington, and brought to you by the RJ Fichera Law Firm, where our mission is to provide trusted, professional legal services and strategic advice to assist our clients in their personal and business matters. Our firm is committed to delivering efficient and cost-effective legal services focusing on communication, responsiveness, and attention to detail. For more information about our services, contact us today!

Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.

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By Katelyn Washington