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League of Women Voters--Know Your County

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STATE TAXES
bulletPersonal Income Tax: Enacted in 1971, this tax was designed to conform to the uniformity clause of the Constitution, so deductions and graduated rates are not allowed. The tax is levied against the taxable income of individuals, estates and trusts. There is a poverty exemption and a deduction is permitted for certain unreimbursed business expenses. Persons over the age of 55 can have a onetime exclusion of the gain from the sale of a principal residence.

The present tax rate is 0.028 percent. The state collects this tax and returns the revenues to local governments through the General Fund.

bulletConsumption Taxes These are taxes that are levied on goods and services. One of the major ones is the state sales tax which is collected on goods and services sold at retail. The present rate is six percent. Goods not included under the sales tax are food, beverages, clothing and drugs. All proceeds from the sales tax are applied to education.

Other consumption taxes include assessments on cigarettes, liquor and malt beverages.

bulletGasoline (liquid fuels) Tax This tax is levied by the Commonwealth for the maintenance and construction of roads. The present tax is $0.12 per gallon of gasoline. The state allocates the revenues generated from this tax to counties and municipalities on a formula basis.
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LOCAL TAXES
bulletEarned Income Tax Local governments, other than the County, and school districts are permitted to levy this tax under act 511 of 1965, the Local Tax Enabling Act. The county tax rate is one percent and Lebanon City's tax rate is 1.7% of gross annual earnings for an individual. It is collected by the Lebanon County Earned Income Tax Bureau. One half of the tax collected is returned to the individual's school district; the other half goes to the municipality in which the person lives.
bulletPer Capita Tax As with the earned income tax, this tax can be levied by the school districts and municipal governments. The tax is a flat fee per person per year (usually $5 or $10).
bulletReal Estate Transfer Tax When persons or businesses sell or purchase property, a realty transfer tax of 1 percent of the actual price of the property must be paid. The revenues from this tax are shared by the school district and municipality.
bulletReal Estate or Property Tax This is a tax levied by local governments on the valuation of appraised land and buildings, in millage (mills per $1.00 valuation).

One mill is equal to 1/10 cent or (1/1,000 of a dollar).

bulletPersonal Property Tax This is a tax on intangible holdings of financial institutions. The moneys collected go to the County's general fund.

Prepared by Lebanon County Commissioners Office