Tax Reference Guide

PA Tax Guide for New Residents

Understanding Pennsylvania's tax structure — income, property, sales, and inheritance — and how it compares to your origin state.

Share this guide

Pennsylvania Income Tax: The 3.07% Advantage

Pennsylvania's flat income tax of 3.07% on all earned income is one of the state's most attractive features for relocators. Unlike neighboring states with progressive tax structures that can reach 10%+, Pennsylvania charges the same rate whether you earn $50,000 or $500,000. This predictability makes financial planning straightforward.

Most Lehigh Valley communities also have no local earned income tax (EIT), which is an additional savings. Some Pennsylvania municipalities charge 1%–2% in local EIT, but the Lehigh Valley is largely exempt. A small local services tax (typically $52/year for employed residents) may apply in some areas.

State Tax Comparison

State	Top Income Tax	Sales Tax	Clothing Taxed?	Property Tax (avg)
New Jersey	10.75%	6.625%	Yes	$9,000–$12,000+
New York	10.9% + NYC tax	8%+	Yes (>$110)	$8,000–$15,000+
Connecticut	6.99%	6.35%	Yes	$6,000–$12,000+
Maryland	5.75% + local	6%	Yes	$4,000–$8,000+
Delaware	6.60%	0%	N/A (no sales tax)	$1,500–$5,000
Pennsylvania	3.07% flat	6% (clothing exempt)	No	$3,000–$8,000

* Pennsylvania row highlighted in green. Property taxes vary by school district. All figures approximate.

Lehigh Valley Property Taxes by School District

Property taxes in Pennsylvania fund public schools. Rates vary significantly by school district. Here are approximate annual property tax ranges for Lehigh Valley districts:

Parkland School District

$5,000–$7,500/yr

Highly rated, covers Allentown (northern), South Whitehall, Upper Macungie

Bethlehem Area SD

$4,500–$7,000/yr

Largest district, serves Bethlehem and surrounding townships

Nazareth Area SD

$4,000–$6,500/yr

Top-rated, serves Nazareth and surrounding townships

Saucon Valley SD

$4,500–$7,000/yr

Serves Hellertown and Lower Saucon Township

Northampton Area SD

$3,500–$6,000/yr

Serves Northampton, Bath, and surrounding areas

Whitehall-Coplay SD

$4,000–$6,500/yr

Serves Whitehall and Coplay

Salisbury Township SD

$5,000–$7,500/yr

Small district, Salisbury Township only

Catasauqua Area SD

$3,500–$5,500/yr

Smaller district, typically lower taxes

View Complete School District Guide →

Other PA Tax Benefits for New Residents

No Sales Tax on Clothing

PA exempts clothing and footwear from the 6% sales tax — a year-round savings for families.

No Local Earned Income Tax

Most Lehigh Valley communities do not charge a local EIT, unlike many PA municipalities.

No Estate Tax

Pennsylvania does not impose a state estate tax. Federal estate tax exemption is $13.61M per person.

Inheritance Tax

PA charges 4.5% for direct descendants, 12% for siblings, and 15% for others. Spouses are exempt.

Tax FAQ

What is Pennsylvania's income tax rate?

Pennsylvania levies a flat 3.07% income tax on all earned income (wages, salaries, self-employment income). This rate applies regardless of how much you earn. There is no graduated rate structure — everyone pays the same percentage. Investment income may be taxed differently under the PA Personal Income Tax.

Are there local income taxes in the Lehigh Valley?

Most Lehigh Valley communities do NOT charge a local earned income tax (EIT). This is a significant advantage compared to many other Pennsylvania municipalities that can charge 1%–2% in local EIT. However, some communities may charge a local services tax (typically $52/year for employed residents). Check specific municipalities for details.

How do Lehigh Valley property taxes compare to my current state?

Property taxes in the Lehigh Valley vary significantly by school district, ranging from approximately $3,000 to $8,000+ annually. This is substantially lower than New Jersey ($9,000–$12,000+), New York metro ($8,000–$15,000+), and Connecticut ($6,000–$12,000+). Even the highest Lehigh Valley property tax rates are generally lower than the New Jersey and New York averages.

Is there sales tax on clothing in Pennsylvania?

No. Pennsylvania does not charge sales tax on clothing, footwear, and certain other items. The statewide sales tax rate is 6%, but clothing is exempt. This is a notable savings for families coming from New Jersey (6.625% on clothing), New York (8%+ on clothing over $110), Connecticut (6.35%), or Maryland (6%).

What about inheritance and estate taxes?

Pennsylvania has an inheritance tax ranging from 4.5% (direct descendants) to 15% (non-related heirs). There is no estate tax at the state level. The federal estate tax exemption is $13.61 million per person (2024). Pennsylvania's inheritance tax is something to consider for estate planning, and Tim Tepes can connect you with local estate planning professionals.