How Local Taxes Work
If you live in West Chester or one of the surrounding townships, you're paying local taxes to several different government bodies at the same time — and it's not always easy to find a clear explanation of how it all fits together. We'll try to help with that here.
The Three Layers of Local Tax
No matter where you live in this area, your local tax bill comes from three separate government bodies — not one.
Your Municipality
This is the Borough of West Chester or the township you live in — East Goshen, West Goshen, East Bradford, West Whiteland, Westtown, or Thornbury. Your municipality sets its own tax rates and provides services like local roads, police, and parks.
Your County
Most of WCASD's territory falls in Chester County, with some in Delaware County. The county sets its own rates and funds things like the court system, county parks, and social services.
Your School District
The West Chester Area School District (WCASD) covers all eight municipalities. It sets its own rates to fund school operations — and typically accounts for the largest share of your total local tax bill.
Each of these three bodies sets its own rates independently, on its own budget cycle. A change in one does not affect the others.
Property Tax
Property tax is the main revenue source for local governments and school districts. If you own a home or other real property, you pay it every year — whether or not you have a mortgage.
How the math works
Your bill is calculated using two numbers: your property's assessed value and the millage rate set by each taxing body.
- Assessed value
- The value assigned to your property by the county assessor's office. This is not the same as market value — what your home would sell for today. Counties reassess properties periodically, so assessed values can lag behind the market significantly.
- Millage rate (or mill rate)
- One mill equals one dollar of tax per thousand dollars of assessed value. A millage rate of 20 mills on a property assessed at $200,000 produces a $4,000 annual tax bill from that one body.
Three separate bills
Because three separate entities tax your property, you receive three separate tax bills each year — one from your municipality, one from your county, and one from WCASD. They arrive on different schedules throughout the year and are paid separately.
If you have a mortgage with an escrow account, your lender typically collects a portion each month and pays these bills on your behalf. But the bills are still issued to you, and it's worth understanding what you're paying.
Not all property is taxable
Not all property generates tax revenue. Institutions like West Chester University — a state-owned university — are exempt from local property taxes. That means a significant amount of land and buildings in the Borough contributes nothing to the local tax base, even though the Borough still provides services to the campus and its student population. Some municipalities negotiate Payment in Lieu of Taxes (PILOT) agreements with large tax-exempt institutions to partially offset this gap.
Earned Income Tax (EIT)
The Earned Income Tax is a percentage tax on wages, salaries, self-employment income, and certain other earnings. If you work and earn income, you pay it.
Who collects it
In Chester County, EIT is collected by Keystone Collections Group on behalf of the municipalities and school districts. You don't pay the municipality and WCASD separately — Keystone handles collection and distributes the revenue to each.
How the split works
Your total EIT rate is divided between your municipality and your school district. Each sets its portion of the rate. The combined total is what's withheld from your paycheck or paid directly if you're self-employed.
For most employees, it's automatic
If you're employed by a company, your employer withholds EIT from each paycheck and remits it on your behalf — similar to federal income tax withholding. You generally only need to file directly with Keystone if you have self-employment income, investment income subject to EIT, or your employer didn't withhold correctly.
You pay EIT based on where you live, not necessarily where you work — with some exceptions. If you work in a different municipality that levies a higher rate, credit rules may apply. Keystone's website has guidance for these situations.
Local Services Tax (LST)
The Local Services Tax is a small flat tax levied on anyone who works within a municipality — regardless of where they live.
- How much
- The maximum allowable LST is $52 per year (one dollar per week). Most municipalities levy the full amount.
- Who pays it
- Anyone employed within that municipality pays it — so if you commute into West Chester Borough to work, you pay the Borough's LST, even if you live in East Goshen.
- How it's collected
- Employers withhold it from employees' paychecks in installments throughout the year and remit it to the municipality where the work is performed.
- Exemptions
- People who earn less than a certain annual threshold are exempt. If you work multiple jobs, you should only pay LST once — there are refund procedures if it's withheld in error by more than one employer.
Realty Transfer Tax
The Realty Transfer Tax is a one-time tax paid when real property changes hands — at the closing of a home sale, for example. It is not an ongoing annual tax.
Who pays it
By custom, the cost is typically split between buyer and seller, though this is negotiable and set by the purchase agreement.
How it's split
The total rate is divided among three entities: the Commonwealth of Pennsylvania, your school district, and your municipality. Each takes a portion. The state's share is set in state law; the local shares are set independently by WCASD and the relevant municipality.
Because this tax is paid at closing, it's one that most residents only encounter when buying or selling property. Your real estate attorney or title company will calculate and collect it as part of the closing process.
What About Other Taxes?
The taxes covered on this page are all local — but they're not the only taxes you pay. Pennsylvania levies a flat 3.07% state income tax on earned income, and a 6% sales tax on most goods and services. Those dollars go to Harrisburg and fund state-level services: roads and highways, the state police, public universities, and social services programs, among others.
State taxes are real and worth understanding, but they're a separate system from what's described here. The local taxes on this page — property tax, EIT, LST — are what pay for the things closest to home: your schools, your local roads, your police and fire departments, your parks, and the day-to-day operations of your borough or township government.
How It All Adds Up
Taken together, these taxes — property tax, EIT, LST, and the realty transfer tax — form the local tax system that funds your schools, your municipality, and your county government. They're set by different bodies, collected by different agencies, and paid on different schedules.
The total burden varies from one community to the next. A homeowner in West Chester Borough pays different combined rates than a homeowner in East Goshen Township — and both differ from someone in West Whiteland. Where you live matters.