Harrisburg, PA Local Taxes & Fees: Business Tax Classification (2026)

Section 5-715.3 is the classification rule. Instead of one flat rate, the City sorts a business's receipts by what the receipts come from. Receipts attributable to the performance of service fall under the business privilege tax: two mills, or $2 per $1,000, up to gross receipts of $3,300,000, and 1/2 mill or $0.50 per $1,000 above that. Receipts from wholesale sales of merchandise fall under the wholesale mercantile tax: one mill or $1 per $1,000 up to gross receipts of $5,000,000, and 1/8 mill or $0.125 per $1,000 above that. Receipts from retail sales fall under the retail mercantile tax: 1 1/2 mills or $1.50 per $1,000 up to gross receipts of $3,300,000, and 1/8 mill or $0.125 per $1,000 above that. These are the rates the code prints; confirm them against the section itself before relying on them.

The definitions that open the chapter draw the dividing lines. Retail sales are made to a purchaser who acquired goods for ultimate consumption or use and not for resale, wholesale sales are made for the purpose of resale, and services are any activity other than retail or wholesale vending of merchandise done for the benefit of another for consideration. Section 5-715.3(C) exempts persons employed for a wage or salary, nonprofit corporations organized for religious, charitable or educational purposes, government agencies, utility service of companies whose rates are fixed by the Pennsylvania Public Utility Commission, manufacturers, producers and farmers with respect to their own goods, and gross receipts received as rent by a landlord or the landlord's agent.

Every business needs a business privilege and mercantile license, at $50 for the license and $50 for each renewal (§ 5-715.8), even a business that is exempt from the tax. A taxpayer whose estimated annual gross volume of business can reasonably be expected to exceed $2,000,000 files a declaration of estimated tax and pays quarterly installments of 25% (§ 5-715.4). Without a declaration, the full tax is due on April 15 of the succeeding year (§ 5-715.6). Where the whole volume of business cannot be taxed under the Constitution of the United States or other law, the Business Administrator sets the allocation method so that only the part properly attributable to doing business in the City is taxed (§ 5-715.3(E)).