LLC Annual Report and Tax Filing Requirements in Pennsylvania

You've formed a limited liability company (LLC) in Pennsylvania, but your work isn't over yet. After you've registered your LLC, you must renew your registration and pay the required business taxes. If you've hired employees, you also probably need to pay employer taxes. Let's look at the ongoing requirements for your Pennsylvania LLC.

Pennsylvania LLC Annual Registration

In 2022, Pennsylvania put in place a new law requiring annual reports for various types of businesses, including LLCs. Previously, Pennsylvania required LLCs to submit reports every 10 years. The new law will take effect in 2025. Starting in 2025, LLCs will need to file an annual report with the Pennsylvania Department of State (DOS) every year.

The new annual report would require the following information:

• your business name
• the state where your LLC was formed
• the address of your LLC's registered agent
• the name of at least one of your LLC's members
• the address of your LLC's principal office, and
• your LLC's entity number that was issued by the DOS.

As of 2023, the filing fee for an annual report for LLCs is $7. Starting in 2025, you must submit your report by September 30. You can learn more about Pennsylvania's new requirements on the DOS's webpage on annual reports.

State Business Taxes in Pennsylvania

LLCs are considered pass-through entities for tax purposes. So, the income from the LLC passes through to the members (owners) who pay taxes on their portion of the income.

No franchise tax. Some states impose a tax—called a "franchise tax"—on companies for the privilege of doing business in the state. Pennsylvania doesn't impose such a tax on LLCs.

Electing corporate tax status. While LLCs are taxed as partnerships by default, you can choose to have your LLC taxed as a corporation. Pennsylvania's corporate net income tax is levied on federal taxable income. As of 2023, Pennsylvania has started to reduce the tax rate by 0.5% every year. You can file your corporate tax return through the Pennsylvania Tax Hub (myPATH).

Pennsylvania Employer Taxes

If you plan to have employees, then you'll need to pay employer taxes. Employers must pay taxes to the federal and state governments. In Pennsylvania, employers must withhold and pay income taxes for employees and pay an unemployment compensation tax.

Withholding employee wages. First, you'll need to withhold and pay employee personal income taxes to the Pennsylvania Department of Revenue (DOR) through myPATH. Employers must make either quarterly, monthly, semi-monthly, or semi-weekly payments. The payment frequency depends on the total amount that's being withheld. You must also file reconciliation returns each quarter.

Unemployment compensation tax. The Pennsylvania Department of Labor and Industry handles the state unemployment compensation tax. You can register to pay this tax online using the Unemployment Compensation Management System (UCMS). You must submit quarterly tax reports and payments.

Pennsylvania Sales and Use Tax

In Pennsylvania, the state sales and use tax is imposed on the sale, consumption, rental, or use of personal property as well as on some services. You can obtain various types of sales tax licenses, such as a:

• promoter license
• sales, use, and hotel occupancy retail tax license
• transient vendor certificate
• wholesale certificate, and
• hotel occupancy tax and booking agent license.

The state sales tax applies to particular goods and services. Importantly, the sales tax doesn't include items like:

• food that's not ready to eat
• candy and gum
• most clothing
• textbooks
• computer services
• pharmaceutical drugs, and
• residential heating fuels (like oil, electricity, gas, coal, and firewood).

You can register to pay this tax through myPATH. You'll need to pay sales tax on a periodic basis. You can find more information about the Pennsylvania sales tax on the DOR website.

In addition to state sales and use tax, you might be responsible for reporting and paying sales and use tax to your city or county. Make sure you check with your local taxing authorities for your reporting responsibilities.

LLC Registration in Other States

If you'll be doing business in states other than Pennsylvania, you'll likely need to register your LLC in some or all of those states. Whether you're required to register will depend on the specific states involved. Usually, states require you to register your out-of-state (foreign) business if you have a physical presence in the state (such as an office or warehouse), you hire employees in the state, or you market to the state's residents. Foreign registration usually involves obtaining a certificate of authority or a similar document.

For more on qualifying your foreign LLC, see our state guide to qualifying to do business outside your state.