PA Pennsylvania State sales tax rates

STATEWIDE SALES TAX RATE

6%

ECONOMIC SALES THRESHOLD

$100,000

TRANSACTIONS THRESHOLD

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Do you need to collect sales tax in Pennsylvania?

You’ll need to collect sales tax in Pennsylvania if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.

Do you have physical nexus in Pennsylvania?

Pennsylvania considers a seller to have physical nexus if you have any of the following in the state:

An office or place of business
An employee present in the state
Goods in a warehouse
Ownership of real or personal property
Delivery of merchandise in Pennsylvania
Independent contractors or other representatives in Pennsylvania
Leasing property in the state

Do you have economic nexus in Pennsylvania?

Effective July 1, 2019, sales into Pennsylvania that exceeded $100,000 in the previous 12-month period are considered to have economic nexus. The notice and report is still in effect for those with taxable sales greater than $10,000 but less than $100,000 in a calendar year.

Is what you’re selling even taxable?

Services in Pennsylvania are generally not taxable. However – if the service you provide includes selling, repairing or building a product that service may be taxable.

Tangible products are taxable in Pennsylvania, with a few exceptions. These exceptions include food (not ready-to-eat); candy and gum; most clothing; textbooks; computer services; pharmaceutical drugs; sales for resale; and residential heating fuels such as oil, electricity, gas, coal and firewood.

Is SaaS taxable in Pennsylvania?

SaaS is taxable in Pennsylvania.

Collecting Sales Tax

The sales tax rate you collect in Pennsylvania depends on whether you are based in Pennsylvania or out-of-state.

How to Collect Sales Tax in Pennsylvania if You are Based in Pennsylvania

Pennsylvania is an origin-based sales tax state. So if you live in Pennsylvania, collecting sales tax is fairly easy. Collect sales tax at the tax rate where your business is located.

If you have more than one location in Pennsylvania, then you would base the sales tax rate you charge on the point of origin of your sale.

Important to note: Only two locations in Pennsylvania that have a local tax rate: Allegheny County and Philadelphia. (For more information on specific business taxes applicable to merchants located in or operating in Philadelphia, consult the City of Philadelphia’s website. Everywhere else is just the state sales tax rate of 6%.

If you have more than one location in Pennsylvania, then you would base the sales tax rate you charge on the point of origin of your sale.

How to Collect Sales Tax in Pennsylvania if you are Not Based in Pennsylvania

If you live outside of Pennsylvania, but have nexus in the state, you would charge the 6% Pennsylvania state use tax rate. (Use tax is similar to sales tax, but charged by “remote sellers” – sellers who aren’t based in a state but have sales tax nexus in that state.)

Should you collect sales tax on shipping charges in Pennsylvania?

If the item being shipped is taxable, the shipping and handling charges are also subject to tax. If the item being shipped is not subject to sales tax, neither are the shipping and handling charges. In the case where items being shipped are both taxable and nontaxable, then the shipping and handling charges for the entire shipment are subject to tax.

When are Returns Due?

When you file and pay Pennsylvania sales tax depends on two things: your assigned filing frequency and your state’s due dates.

How often will you file sales tax returns in Pennsylvania?

States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state. In Pennsylvania, your sales tax filing frequency is determined by your sales tax liability during Q3 of the previous year.

In Pennsylvania, you will be required to file and remit sales tax either monthly, quarterly, or semiannually.

Pennsylvania sales tax returns are generally always due the 20th of the month following the reporting period, though semi annual filers get an extra month. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.