Allentown, PA Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Retail rate
- 1.5 mills ($1.50 per $1,000)
- Wholesale rate
- 1 mill ($1.00 per $1,000)
- Service/rental rate
- 3 mills ($3.00 per $1,000)
- Return and payment due
- April 15 annually
- Classification basis
- Nature of the transaction, not business type
- Key exemptions
- Nonprofits, government, small owner rentals
Summary
Allentown taxes gross business receipts by transaction type: 1.5 mills on retail, 1 mill on wholesale, and 3 mills on service and rental business. The classification follows the nature of each transaction, not a business's overall category.
The rate of the tax on each dollar of the whole or gross volume of business transacted within the territorial limits of the City shall be as herein set forth, on retail business the rate shall be 1 1/2 mills (1 1/2 mills means $1.50 per $1,000 of gross volume of business), the rate of the tax for wholesale business transacted shall be one mill (one mill means $1 per $1,000 of gross volume of business). The rate of tax for service and rental business transacted shall be three mills (three mills means $3 per $1,000 of gross volume of business). For purposes of this section, the nature of the transaction which yields the gross volume and not the principal business of the vendor shall determine the appropriate rate of taxation.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: rev 4995055; v49 updated 2026-06-26; through 06-26-2026).
Full Breakdown
A of the Codified Ordinances levies the Business Privilege Tax on the gross volume of business transacted in the City, with three separate rates. 50 per $1,000 of gross volume. Wholesale transactions are taxed at 1 mill, or $1 per $1,000. Service and rental transactions carry the highest rate, 3 mills, or $3 per $1,000. Critically, the statute classifies by the nature of each individual transaction rather than the business's primary line: the code gives the example that a wholesale dealer's retail sales are taxed at the retail rate, not the wholesale rate, even though the business is classified as a wholesaler overall.
C(4). D: wage earners, nonprofit charities and religious or educational organizations, government agencies, incidental rental of a small owner-occupied dwelling of two units or fewer, businesses already paying a state tax or fee that Pennsylvania courts have held exempts them from local business privilege or mercantile tax, PUC-regulated utility receipts, and manufacturing, production or farming of goods grown or processed within the City.
Violations & Fines
Chapter 570 is separately enforced under the City's tax collection and assessment procedures; Section 570-3.C(5) allows the Director of Finance to accept tax payment under protest where a taxpayer disputes the City's claim, with judicially confirmed overpayments refunded to the taxpayer.
Frequently Asked Questions
How is my Allentown business privilege tax rate determined?
If I'm a wholesaler who also sells retail, what rate applies to the retail sales?
When is the Allentown business privilege tax return due?
Sources & Official References
Other rules in Allentown
Compare Allentown to another location·View the Pennsylvania local taxes & fees overview
See something wrong?
Help us keep this page accurate. If you notice an error or outdated information, let us know.