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PA Local Taxes Explained
What are the local taxes in Pennsylvania?
Pennsylvania law allows local governments and school districts to use a wide variety of taxes to fund their services. The multitude of taxes may appear confusing initially, but each is straightforward.
Earned Income Tax
Commonly referred to as the wage tax, this is applied to residents of a municipality or school district who earn income and net profits. Non-residents who work within the municipality or school district may be taxed at a different rate.
For a comprehensive resource, view our Taxable Income and Deduction Reference Guide.
Tax Forms & Instructions
Real Estate Tax
Sometimes called the real property tax, this covers land and permanent buildings throughout the Commonwealth.
Local Services Tax
This flat rate tax is levied upon individuals working within the taxing district. Employers located within a given municipality or school district are required to withhold this tax for each employee. This tax is levied annually. Employers are required to have proof of employee payments.
Per Capita Tax
The Per Capita Tax is a flat rate tax levied upon each adult residing within the taxing district.
Occupation Tax
This tax may be levied on residents of a taxing jurisdiction, even if they are employed in another municipality. The tax is measured by the assessed value of a particular occupation.
Amusement Tax
The Amusement Tax is levied on the gross admissions of patrons of any type of event that offers entertainment or allows patrons to engage in the entertainment. Certain events and organizations are exempt.
Business Privilege Tax
The Business Privilege Tax is applied to any business, trade or profession carrying on an activity within the respective municipality or school district. It does not apply to wholesale vending of goods, wares or merchandise, employment for wage or salary, or activities of a non-profit organization.
Mercantile Tax
This tax is assessed on the gross income of anyone engaged in the sale of goods, wares and merchandise located within a municipality or school district.
Act 50
This 1998 act gives Pennsylvania school districts a choice in how they set up local taxation. It allows a shift from real property taxes to earned income tax. In addition, Act 50 created the Taxpayer Bill of Rights for Pennsylvanians who pay Act 511 taxes. The act requires taxing authorities to adopt a Bill of Rights and establish an appeal process. PAMS administers the requirements of Act 50 for many clients by using a standardized Bill of Rights. View the Taxpayer Bill of Rights
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