Pennsylvania just rewired how it keeps tabs on registered businesses. What used to be a once-a-decade filing is now an annual one, though at least the state kept the cost trivial. This is the walkthrough for getting a business running in Pennsylvania in 2026.
1. Which business structure fits you?
A quick look at the options before you file anything will save you a headache down the line.
- Sole proprietorship. Free to start, no filing needed, but you and the business are one legal entity, so its debts follow you personally.
- Partnership. Same personal liability picture as a sole proprietorship, just distributed across two or more owners running things together.
- LLC. What most small Pennsylvania businesses choose, since it draws a legal boundary between your personal assets and the business's debts or lawsuits.
- Corporation (S-corp or C-corp). Brings more paperwork and formal structure, typically justified once investors or multiple shareholders are in the mix.
Our guide to choosing a business structure covers this comparison in more depth.
LLCs and corporations file with the Pennsylvania Department of State's Bureau of Corporations and Charitable Organizations, which handles business registration for the whole state. Sole proprietorships and general partnerships have no reason to file there.
2. Register your business
Forming an LLC
A Certificate of Organization filed with the Department of State is what forms a Pennsylvania LLC. It costs $125, and filing online through the Business One-Stop Hub typically gets you processed in around a day.
Pennsylvania calls its version of a registered agent a registered office, and every LLC needs one at a physical in-state address. In-state residents can use their own address; everyone else typically hires a commercial registered office provider.
Nothing in state law requires an operating agreement, but draft one regardless, particularly if there's more than one member, since it's the document governing how decisions and profits get divided.
Sole proprietorships and DBAs
Sole proprietors skip the Department of State filing entirely. Trading under a fictitious name is different, though; that goes through a Fictitious Name registration filed at the state level in Pennsylvania, rather than through a county office like in many other states.
3. Get an EIN
The IRS issues Employer Identification Numbers at no cost, and the online process generally takes about 15 minutes. You'll be asked for one when opening a business bank account, hiring staff, or filing most business tax forms, and that applies even to a single-member LLC with no employees.
4. Check licenses and permits
There's no single statewide business license here either. What applies to your business depends on industry and municipality: regulated professions need their specific licensing, some municipalities charge a local business privilege license, food businesses need health permits, and selling taxable goods requires sales tax registration with the Department of Revenue. See our guides to industry-specific licensing and home-business zoning rules for more.
5. Understand Pennsylvania taxes
Pennsylvania keeps a flat 3.07% personal income tax rate, one of the lowest flat rates anywhere in the country, meaning your rate stays the same regardless of income level. Electing corporate tax treatment for your LLC brings a 7.49% corporate net income tax rate for 2026, which is on a scheduled glide path down to 4.99% by 2031.
Sales tax sits at a flat 6% almost everywhere in the state. The two exceptions are Philadelphia, which adds 2% for a combined 8%, and Allegheny County (home to Pittsburgh), which adds 1% for a combined 7%. Every other county stays right at 6%.
6. Stay compliant
As of 2025, every Pennsylvania LLC owes an annual report to the Department of State, due by September 30 each year, and it only costs $7. That replaced the old decennial report system, which only required a filing once per decade. Reports due in 2025 and 2026 carry no monetary late fee, but that changes starting with 2027 filings, when a missed deadline can trigger administrative dissolution six months later. Reinstatement afterward runs $35 to $40 plus $15 per report you missed, which makes it worth just building the habit now rather than dealing with that later.
Pennsylvania business costs at a glance
| Item | Cost |
|---|---|
| Certificate of Organization (LLC) | $125 |
| Annual Report (every year, due Sept 30) | $7 |
| Registered office service (optional) | $50 to $125/year |
| EIN | Free (IRS) |
| State income tax | 3.07% flat |
| State sales tax | 6% (8% in Philadelphia, 7% in Allegheny County) |
Frequently asked questions
What changed about Pennsylvania's annual filing in 2025?
Pennsylvania replaced its old decennial report (filed once every ten years) with an annual report, now due every year by September 30.
How much does Pennsylvania's new annual report cost?
Just $7.
How much does it cost to form an LLC in Pennsylvania?
$125 for a Certificate of Organization, with online filings typically processing in about a day.
What's the personal income tax rate in Pennsylvania?
A flat 3.07%, one of the lowest flat rates in the country.
Does sales tax vary by city in Pennsylvania?
Mostly no, it's a flat 6% statewide, except Philadelphia (8% combined) and Allegheny County/Pittsburgh (7% combined).
Fees and rates above come from the Pennsylvania Department of State and Department of Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Pennsylvania-licensed attorney or CPA about your specific situation.