Pennsylvania vs Delaware Taxes: Comparison
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Pennsylvania vs Delaware Taxes 2026: Complete Comparison
Pennsylvania and Delaware are neighbors with surprisingly different tax approaches. Delaware has no sales tax and is business-friendly ("Delaware corporation" anyone?). Pennsylvania has a flat income tax and higher property taxes.
Quick Comparison
| Tax Category | Pennsylvania | Delaware | Winner |
|---|---|---|---|
| Income Tax | 3.07% flat | 2.2% - 6.6% | ⭐ PA (for high earners) |
| Sales Tax | 6% | 0% | ⭐ Delaware |
| Property Tax | 1.50% | 0.57% | ⭐ Delaware |
| Total Tax Burden | 10.2% | 6.4% (#47 lowest!) | ⭐ Delaware |
Bottom Line: Delaware wins overall with dramatically lower total tax burden, no sales tax, and low property tax.
Income Tax
Pennsylvania: 3.07% Flat
Simple flat tax on all income:
- $75K = $2,303
- $100K = $3,070
- $200K = $6,140
Delaware: 2.2% - 6.6%
Progressive brackets:
- 2.2% up to $5K
- 3.9% on $5K-$10K
- 4.8% on $10K-$20K
- 5.2% on $20K-$25K
- 5.55% on $25K-$60K
- 6.6% on $60K+
Examples:
- $75K = $4,200
- $100K = $5,850
- $200K = $12,450
Income Tax Winner
PA wins for income above ~$80K
DE wins for income below ~$80K
Sales Tax: DE Dominates
Pennsylvania: 6%
Most goods taxed at 6%. Exceptions:
- Groceries: exempt
- Clothing: exempt
- Prescription drugs: exempt
Delaware: 0%
NO SALES TAX
Annual Impact ($40K spending):
- PA: $2,400 sales tax
- DE: $0
- DE saves $2,400/year
Many Marylanders and Pennsylvanians shop in Delaware to avoid sales tax!
Property Tax: DE Wins Big
Pennsylvania
Average: 1.50%
- $400K home = $6,000/year
Delaware
Average: 0.57%
- $400K home = $2,280/year
DE saves $3,720/year on property tax!
Real-World Scenarios
Scenario 1: Middle-Income Family
Income: $120,000
$450K home
Pennsylvania:
- Income: $3,684
- Sales: $2,400
- Property: $6,750
- Total: $12,834
Delaware:
- Income: $7,170
- Sales: $0
- Property: $2,565
- Total: $9,735
DE saves: $3,099/year 🎉
Scenario 2: High Earner
Income: $250,000
$600K home
Pennsylvania:
- Income: $7,675
- Sales: $3,000
- Property: $9,000
- Total: $19,675
Delaware:
- Income: $16,050
- Sales: $0
- Property: $3,420
- Total: $19,470
DE saves: $205/year (close race!)
Which State Wins?
Delaware Better For:
✅ Most households (lower total burden)
✅ Homeowners (much lower property tax)
✅ Big spenders (no sales tax!)
✅ Beach lovers (Rehoboth, Bethany)
✅ Business owners (DE corporation benefits)
✅ Lower earners
Pennsylvania Better For:
✅ Very high earners ($200K+) without homes
✅ Urban lifestyle seekers (Philadelphia)
✅ Sports fans (Eagles, Steelers, etc.)
✅ Those wanting 4 distinct seasons
Special Considerations
Delaware Beaches: Tax-free shopping + beach = summer tourism boom
"Delaware Loophole": No sales tax attracts shoppers from MD, PA, NJ
Philadelphia vs Wilmington: Philly is bigger, more urban. Wilmington is smaller but growing.
FAQ
Q: Why does Delaware have such low taxes?
Corporate franchise fees! Delaware incorporates 60%+ of Fortune 500 companies. This revenue allows lower resident taxes.
Q: Can I shop in DE to avoid sales tax?
Yes! Perfectly legal. Many do.
Q: Which has better schools?
PA has strong suburban school districts. DE varies more. Research specific districts.
Q: Cost of living?
Similar overall. DE beach areas expensive. PA Pittsburgh/smaller cities cheaper.
Conclusion
For most households, Delaware offers lower total tax burden—typically $2,000-5,000/year savings, mainly from no sales tax and low property tax.
High earners ($200K+) find the states roughly equal, with PA's lower income tax offsetting DE's other advantages.
Calculate Your Savings:
Last Updated: Jan 2, 2026