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Pennsylvania Statutes Title 72 P.S. Taxation and Fiscal Affairs § 7324.4. Withholding on income

Current as of January 01, 2026 | Updated by Findlaw Staff

(a) Every lessee of Pennsylvania real estate who makes a lease payment in the course of a trade or business to a nonresident lessor shall withhold Pennsylvania personal income tax on rental payments to such nonresident lessor.

(b) Every lessee shall withhold from each payment made to a lessor an amount equal to the net amount payable to the lessor multiplied by the tax rate specified under section 302(b). 1

(c) (Reserved).

(d) The withholding of tax under this section is optional and at the discretion of the lessee with respect to payments to a lessor who receives less than $5,000 annually on a lease.

(e) For purposes of this section, the term or phrase:

(1) “Lessor” shall include an individual, estate or trust.

(2) “Lease payment” shall include, but not be limited to, rents, royalties, bonus payments, damage payments, delay rents and other payments made pursuant to a lease, other than compensation derived from intangible property having a taxable or business situs in this Commonwealth.  Classification as a “lease payment” under this section is solely for the purposes of establishing withholding requirements and shall not be relevant for a determination as to the proper income classification of any such lease payment.

(3) “In the course of a trade or business” shall include any person or business entity making lease payments to a nonresident or agent of a nonresident who collects rent or lease payments on behalf of a nonresident owner other than a tenant of residential property.

1  72 P.S. § 7302.
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Cite this article: FindLaw.com - Pennsylvania Statutes Title 72 P.S. Taxation and Fiscal Affairs § 7324.4. Withholding on income - last updated January 01, 2026 | https://codes.findlaw.com/pa/title-72-ps-taxation-and-fiscal-affairs/pa-st-sect-72-7324-4/

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