Starting a service business in Pennsylvania comes down to four things: picking a structure, registering with the state, getting licensed for your trade, and setting up a way to bill customers. Filing an LLC in PA costs $125, ongoing reporting is $70 decennially (every 10 years), sales tax is 6% + local, and personal income tax runs 3.07% flat. Below is the full sequence, the fees you should budget for, the licenses most trades need, and the deadlines that catch new Pennsylvania owners off guard.
Most new registrations come out of Philadelphia, Pittsburgh — local business licenses are issued at the city or county level, so check yours after the state filing clears.
| Item | PA cost |
|---|---|
| LLC / entity filing (one-time) | $125 |
| Annual / periodic report | $70 decennially (every 10 years) |
| Federal EIN (IRS) | Free |
| Sales tax registration | Typically free |
| Trade / professional license | Varies by trade |
| Local business license | Set by city / county |
Fees change — confirm current amounts with the PA Secretary of State and the Pennsylvania Department of Revenue.
Choose your structure and file with the PA Secretary of State ($125). Get your free EIN from the IRS the same day.
Register for Pennsylvania sales tax with the Pennsylvania Department of Revenue, then open a business bank account under the registered name.
Apply for your trade license and local business license. This is usually the longest step: Sales tax license; Professional license.
Get general liability insurance (and workers' comp before your first hire), then set up estimates and invoicing so you can bill the day you're cleared to work.
LLC Filing Fee
$125
Annual Report
$70 decennially (every 10 years)
Sales Tax
6% + local
Income Tax
3.07% flat
Choose business structure
File with PA Dept of State
Get EIN
Register for state taxes
Get local permits
Open business bank account
PA has one of the lowest flat income tax rates at 3.07%
Reports are only required every 10 years
Philadelphia has city-specific wage and business taxes
Only every 10 years — one of the least frequent requirements in the country.
Online LLC filings with the PA Secretary of State are typically processed in a few business days, and an EIN from the IRS is issued immediately online. Trade licensing and local permits usually take longest — plan on two to six weeks before you're fully cleared to work, depending on your trade.
No — you can operate as a sole proprietor in Pennsylvania and still invoice customers legally. An LLC ($125 to file, $70 decennially (every 10 years)) separates your personal assets from business liability, which matters most once you're on customer property, hiring help, or signing contracts.
Pennsylvania sales tax is 6% + local. Materials and goods are commonly taxable, while labor treatment depends on the type of work, so bill parts and labor as separate lines and register with the Pennsylvania Department of Revenue before you start collecting.
Open a business bank account under the registered name, then invoice from a tool that applies PA tax per line item and accepts cards. Glo Invoice sends invoices by text with a one-tap pay link, and Tap to Pay lets you charge on site before you leave the job.