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Pennsylvania Statutes Title 72 P.S. Taxation and Fiscal Affairs § 7402. Imposition of tax

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

(a) A corporation shall be subject to and shall pay an excise tax for exercising, whether in its own name or through any person, association, business trust, corporation, joint venture, limited liability company, limited partnership, partnership or other entity, any of the following privileges:

(1) Doing business in this Commonwealth.

(2) Carrying on activities in this Commonwealth, including solicitation which is not protected activity under the act of September 14, 1959 (Public Law 86-272, 15 U.S.C. § 381 et seq.).

(3) Having capital or property employed or used in this Commonwealth.

(4) Owning property in this Commonwealth.

<Section 24(3)(ii) of Act 2022, July 8, P.L. 513, No. 53, provides that the addition of subsec. (a)(5) by that Act shall apply to taxable years beginning after December 31, 2022.>

(5)(i) Having substantial nexus in this Commonwealth.  Substantial nexus in this Commonwealth means a direct or indirect business activity that is sufficient to grant the Commonwealth authority under the Constitution of the United States to impose tax under this article and for which a basis exists under section 401   1 to apportion or allocate the corporation's income to this Commonwealth.

(ii) For purposes of this section, business activity includes, but is not limited to:

(A) the leasing or licensing of intangible property that is utilized in this Commonwealth;

(B) regularly engaging in transactions with customers in this Commonwealth involving intangible property, including loans made by a corporation that regularly lends funds to unaffiliated entities or to individuals;  or

(C) sales of intangible property that was utilized by the corporation within this Commonwealth.

(iii) There shall be a rebuttable presumption that a corporation with $500,000 or more of sales sourced in the current tax year to this Commonwealth under section 401 has substantial nexus in this Commonwealth without regard to physical presence in this Commonwealth.

<Section 24(3)(ii) of Act 2022, July 8, P.L. 513, No. 53, provides that the addition of subsec. (a)(6) by that Act shall apply to taxable years beginning after December 31, 2022.>

(6) Paragraph (5) shall not apply to an affiliated entity domiciled in a foreign nation which has in force a comprehensive income tax treaty with the United States providing for the allocation of all categories of income subject to taxation, or the withholding of tax, on royalties, licenses, fees and interest for the prevention of double taxation of the respective nations' residents and the sharing of information.

(b) The annual rate of tax on corporate net income imposed by subsection (a) for taxable years beginning for the calendar year or fiscal year on or after the dates set forth shall be as follows:

Taxable Year

Tax Rate

January 1, 1995,
through December 31, 2022

9.99%

January 1, 2023, through December 31, 2023

8.99%

January 1, 2024, through December 31, 2024

8.49%

January 1, 2025, through December 31, 2025

7.99%

January 1, 2026, through December 31, 2026

7.49%

January 1, 2027, through December 31, 2027

6.99%

January 1, 2028, through December 31, 2028

6.49%

January 1, 2029, through December 31, 2029

5.99%

January 1, 2030, through December 31, 2030

5.49%

January 1, 2031, and each taxable year thereafter

4.99%

(c) An entity subject to taxation under Article VII, VIII, IX or XV   2 shall not be subject to the tax imposed by this article.

1  72 P.S. § 7401.
2  72 P.S. § 7701 et seq.
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Cite this article: FindLaw.com - Pennsylvania Statutes Title 72 P.S. Taxation and Fiscal Affairs § 7402. Imposition of tax - last updated January 01, 2026 | https://codes.findlaw.com/pa/title-72-ps-taxation-and-fiscal-affairs/pa-st-sect-72-7402/

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