Pennsylvania lesson 5 of 6
Pennsylvania LLC taxes and licences
Pennsylvania has no LLC franchise tax, and its flat personal income tax rate is one of the lowest among states that tax income at all. Most of the complexity for an LLC owner comes from local taxes, not the state return.
Personal income tax on pass-through profit
By default, LLC profit passes through to members and is taxed on their personal Pennsylvania income tax return at the state's flat rate. If the LLC elects to be taxed as a corporation, it instead owes the Corporate Net Income Tax, which the Commonwealth has been phasing down over several years.
Sales tax and other registrations
If the LLC sells taxable goods or services, register for sales tax through myPATH before making sales. If it hires employees, register for employer withholding and unemployment compensation through the same system.
Local taxes
Some Pennsylvania municipalities levy their own business taxes on top of the state ones. Philadelphia is the clearest example, with its Business Income and Receipts Tax applying to businesses with a Philadelphia nexus. Check the tax rules of any city or municipality where the LLC actually operates.
Local business taxes are set and collected locally, not by the Department of Revenue, so they will not show up if you only check state-level guidance.
Key takeaways
- LLC profit passes through to the members' Pennsylvania personal income tax return by default.
- Electing corporate treatment moves the LLC onto the Corporate Net Income Tax instead.
- Cities such as Philadelphia add their own business taxes on top of state tax.
Frequently asked questions
Does Pennsylvania have a separate LLC franchise tax?
No. There is no LLC-specific franchise tax. Tax exposure depends on how the LLC is taxed for income tax purposes and on any local business taxes where it operates.
Official sources
Or let us file your Pennsylvania LLC for you
Everything above is yours to use for free. If you would rather hand it over, we prepare and file the Certificate of Organization Domestic Limited Liability Company (DSCB:15-8821), act as your registered agent, and track your ongoing deadlines.
Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team