How is gross receipt tax calculated?
By law, the current GRT rate in Pennsylvania is 5.9%. However, since the tax is embedded in the cost of electric generation supply, electric distribution companies and electric generation suppliers apply a gross-up factor to determine the amount of GRT that must be paid to Pennsylvania. As a result, electric distribution companies and electric generation suppliers pay GRT to Pennsylvania in the amount of 6.27% on the base price of electric generation supply. This gross-up factor, resulting in a GRT of 6.27%, is calculated by the following formula: 1/1-5.9%.
