Also known as the “Keystone State,” Pennsylvania is the homeland of both the country’s Declaration of Independence and Constitution. Thanks to its place in the founding of the United States, Pennsylvania has an abundant cultural heritage combined with an excellent workforce, a good geographical position close to four of the largest U.S. markets, and plenty of natural resources.
According to the Commonwealth of Pennsylvania website, the state is home to 21 Fortune 500 and 3 Fortune Global 500 companies like KraftHeiz, Comcast, PPG, Hershey, and Wesco.
Interesting Pennsylvania Business Statistics
Pennsylvania’s 1.1 million small businesses account for 99.6% of all private enterprises and employ 46.3% of its workforce. Here are some more interesting business statistics from the state:
1. Pennsylvania Industries
The biggest earners in Pennsylvania are agriculture, manufacturing, and mining. The most significant portion of the state’s agricultural income includes livestock products, and the state is known for its fungi culture (mushrooms).
The leading manufacturing industries in the state are chemicals, prescription drugs, and over-the-counter medicines, thanks to companies like Johnson & Johnson, Pfizer, and GlaxoSmithKline.
According to their employment figures, the highest number of small businesses are professional, scientific, and technical services, other private services, construction, retail, and real estate.
2. Starting an LLC in Pennsylvania
Pennsylvania LLC formation requires a few simple steps, always starting by providing a unique name for your startup that another LLC does not use. Remember, you also need to give the name of a registered agent when you file your Certificate of Formation. A registered agent’s purpose is to receive important legal and federal notifications during regular business hours at a physical address in Pennsylvania to ensure compliance.
To officially form a Pennsylvania LLC (limited liability company), you must file a Certificate of Formation with a $125 filing fee to the Corporation Bureau at the Department of State.
Furthermore, even though the state doesn’t require you to file an Operating Agreement for a Pennsylvania LLC, you should prepare one to reduce future conflict risks and keep it on file.
3. Small Business Taxes
A Pennsylvania LLL has pass-through taxation, meaning it pays no federal or state income tax. However, each individual LLC member is taxed on their share of the business income. If an LLC gets classed as a corporation, it is subject to the state’s corporate net income tax, reaching 9.99%, the second highest in the U.S.
The state also imposes a sales tax of 6% and a relatively low property tax of an average of 1.46% on property values. Pennsylvania also charges a 3.07% individual tax.
4. Location
Pennsylvania is one day away from nearly 40% of the U.S. and 60% of Canada’s population. However, it is also close to the vast hubs of New York and Washington, D.C. The advantages of being between the financial and regulatory hubs of the country, its low cost of living, and its welcoming environment make it a sought-after state for business startups and relocations.
Interestingly, small businesses clustered in and around Philadelphia often reach across the border into New York or New Jersey thanks to the city’s eastern geographical position.
5. Well-Connected Infrastructure
Pennsylvania is one of the most well-connected states thanks to its infrastructure. With its 64 railroads, 120,000 miles of highways, airports, and port access to the Atlantic, Gulf of Mexico, and the Great Lakes, the state handles a significant volume of goods, giving it a place in the top 10 states of the country.
Pennsylvania exports about $12 billion of goods and services to Canada annually, but its exports surpass $40 billion. At least 88% of these exporters are small firms, accounting for 32% of distributed items.
6. Smart Workforce
Home to the county’s first university, Pennsylvania has a strong workforce of 6.3 million people. The state ranks highly in science, technology, engineering, or math (STEM) graduates and jobs that lead to innovation. Furthermore, Philadelphia and Pittsburgh rank among the 25 top startup cities, and the state is ranked 8th in venture capital-assisted companies.
Bottom Line
Small businesses continue to succeed in Pennsylvania thanks to its welcoming communities, thriving cities, charming smaller towns, and quality of life. People across the state find fulfilling careers in innovative businesses that thrive within and beyond the state.
