Pennsylvania has a flat 3.07 percent individual income tax rate. There are also jurisdictions that collect local income taxes. Pennsylvania has a flat 7.49 percent corporate income tax rate, reduced from 7.99 percent in 2025 as part of a multi-year phasedown, a 6.00 percent state sales tax rate, and an average combined state and local sales tax rate of 6.34 percent. Pennsylvania has a 1.26 percent effective property tax rate on owner-occupied housing value. Pennsylvania has an inheritance tax. Pennsylvania’s gas tax is 58.7 cents per gallon, and its cigarette excise tax is $2.60 per pack of 20 cigarettes.
Pennsylvania raises tax revenue primarily through individual income taxes (26.3 percent of total state and local tax revenue), property taxes (25.7 percent), and other taxes (22.3 percent). Pennsylvania collects $6,869 in state and local tax collections per capita, carries $8,713 in state and local debt per capita, and has a 70 percent funded ratio of public pension plans. Pennsylvania’s tax system ranks 36th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Pennsylvania is no exception. Use the tabs below to compare Pennsylvania taxes with other states and to see how Pennsylvania raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
Get facts about taxes in your state and around the US
The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
5 min read
Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
With state tax revenues receding from all-time highs, there’s been a great deal of handwringing about whether states can afford the tax cuts adopted over the past few years. Given that 27 states reduced the rate of a major tax between 2021 and 2023, is there reason for concern?
4 min read
Reforming economic nexus thresholds would not only be better for businesses but for states as well. It is more cost-effective for states to focus on—and simplify—compliance for a reasonable number of sellers than to impose rules that have low compliance and are costly to administer.
4 min read
Do taxes affect individuals’ decisions regarding where to live and work? Can high taxes cause the outmigration of wealthy individuals?
5 min read
Does your state have a small business exemption for machinery and equipment?
3 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
8 min read
Short FormWorking from home is great. The tax complications? Not so much.
4 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
9 min read
Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
7 min read
The pandemic has accelerated changes to the way we live and work, making it far easier for people to move—and they have. As states work to maintain their competitive advantage, they should pay attention to where people are moving, and try to understand why.
5 min read
Thirty-four states will ring in the new year with notable tax changes, including 15 states cutting individual or corporate income taxes (and some cutting both).
17 min read
