Pennsylvania Sales Tax Guide for Businesses
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We wrote this guide for online sellers who want to know if they even have to bother with sales tax in Pennsylvania, and if so, how best to tackle the sales tax situation in the Keystone State.
After reading this, you’ll know:
- Do you or don’t you need to collect Pennsylvania sales tax?
- Which customers do you collect from?
- How much do you collect?
- What do you do with all the sales tax you’ve collected?
- Way more than you probably ever wanted to know about Pennsylvania sales tax
Do you have sales tax nexus in Pennsylvania?
Good news! You only have to begin thinking about Pennsylvania sales tax if you have sales tax nexus in Pennsylvania.
“Sales tax nexus” is just a fancy way of saying “significant presence” in a state.
Pennsylvania considers a seller to have sales tax nexus in the state 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
You can click here to read exactly what the Pennsylvania Department of Revenue (Pennsylvania’s taxing authority) has to say about what constitutes sales tax nexus in Pennsylvania.
Do you have sales tax nexus in Pennsylvania if you sell on FBA?
If you sell on Amazon FBA, you may have sales tax nexus in Pennsylvania. Storing physical products in a state can create sales tax nexus, and Pennsylvania is home to multiple Amazon Fulfillment Centers.
To determine whether or not you have items stored in an FBA warehouse in Pennsylvania, you can do one of two things:
- Login to Amazon Seller Central and pull your inventory report
- Sign up for a 30-day free trial of TaxJar and find out from where your Amazon inventory ships with our Amazon badge feature
You may find that your inventory is stored in one or more of Pennsylvania’s Amazon fulfillment centers in this list:
Read here for more about Amazon FBA and sales tax nexus. Here’s a list of all Amazon Fulfillment Centers in the United States.
Do you have economic nexus in Pennsylvania?
Effective April 1, 2018, 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. You can read Pennsylvania’s economic nexus guidance for sellers here and you can read more about economic nexus in every state here.
Summary: According to Pennsylvania, sellers who meet the nexus threshold are required to register for a Pennsylvania sales tax permit, collect sales tax on sales that ship into Pennsylvania, and remit sales tax to the state.
Those who do not meet the economic threshold should make an election by March 1 of every year and do one of two things:
- Register for a Pennsylvania sales tax permit, collect sales tax on sales that ship into Pennsylvania, and remit sales tax to the state.
- Comply with the state’s rigorous “notice and reporting requirements.”
You can read more about Pennsylvania’s economic nexus law (and notice and reporting requirements) here.
Effective date: 7/1/2019 for economic nexus threshold
Is what you’re selling even taxable?
You’ve probably read this far because you realized you have sales tax nexus in Pennsylvania. Your next step is to determine if what you’re selling is even taxable.
Services in Pennsylvania are generally not taxable. So if you’re a beautician or a stenographer, you’re in luck and you don’t have to worry about sales tax. But watch out – 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.
So if you sell office supplies, then charge sales tax to your Pennsylvania customers.
But if you’re an attorney, don’t charge sales tax to your Pennsylvania customers.
If you have sales tax nexus in Pennsylvania and your products are taxable, your next step is to register for a sales tax permit.
How to Register for a Sales Tax Permit in Pennsylvania
Sellers with sales tax nexus in Pennsylvania must apply for a Pennsylvania sales tax permit.
Don’t skip this step! Pennsylvania considers it unlawful to collect sales tax in their name without a permit. Go here for more on how to register for a sales tax permit in Pennsylvania.
How to Collect Sales Tax in Pennsylvania
So you’ve determined that you have sales tax nexus in Pennsylvania and what you’re selling is taxable. And you’re all set and registered for your Pennsylvania sales tax permit.
The next step is to determine how much sales tax to collect.
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.
You can look up your local sales tax rate with TaxJar’s Sales Tax Calculator or by going to TaxJar.com/mobile on your mobile device.
Example: You run your business in Pittsburgh, Pennsylvania, 15201 and you sell an item to a customer in Philadelphia, 19019. Your tax rate is 7% and your customer’s tax rate is 8%. You would charge the customer your tax rate of 7%.
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. Everywhere else is just the state 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.)
What are the Amazon sales tax settings for Pennsylvania?
If you are an Amazon pro seller and use Amazon to collect sales tax, be sure you have your Pennsylvania sales tax settings entered correctly. Find step-by-step instructions for setting up your Amazon sales tax settings here.
| If you are a… | State tax | County tax | City tax | District tax | Custom rate | Is shipping taxable? | Is gift wrapping taxable? |
|---|---|---|---|---|---|---|---|
| Seller living in Pennsylvania | X | N/A | Yes | Yes | |||
| Seller living outside of Pennsylvania | X | N/A | Yes | Yes |
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.
Read a full explanation of sales tax on shipping inPennsylvania here.
When are Pennsylvania Sales Tax 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.
How often you are required to file sales tax in Pennsylvania follows this general rule:
Pennsylvania sales tax returns are generally always due the 20th of the month following the reporting period, though semiannual 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.
2020 Pennsylvania Monthly Sales Tax Filing Due Dates
2020 Pennsylvania Quarterly Sales Tax Filing Due Dates
2020 Pennsylvania Semiannual Sales Tax Filing Due Dates
How to File Sales Tax in Pennsylvania
When it comes time to file sales tax in Pennsylvania you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
We’ll walk you through these steps.
How to Calculate How Much Sales Tax You Owe in Pennsylvania
Calculating how much sales tax you should remit to the state of Pennsylvania is easy with TaxJar’s Pennsylvania sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Pennsylvania sales tax return will be waiting for you in TaxJar. All you have to do is login!
How to File and Pay Sales Tax in Pennsylvania
You have three options for filing and paying your Pennsylvania sales tax:
- File online File online at the Pennsylvania Department of Revenue. You can remit your payment through their online system.
- File over the telephone- 1-800-748-8299
- AutoFile - Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.
Other Facts You Should Know about Pennsylvania Sales Tax Filing
There are a few more things you should know about sales tax in Pennsylvania:
Penalties:
- The penalty for past due payment of sales tax is 5 percent a month from the date due until the date filed to a maximum of 25 percent. If an underpayment penalty is warranted, it is imposed at a rate of 3 percent a month on the unpaid tax balance from the date filed to the date paid to a maximum of 18 percent.
Other penalties for fraud or serial offenses include higher penalties and even criminal charges.
“Zero returns”:
Pennsylvania requires that any seller with a sales tax permit file a sales tax return on your due date even if you don’t have any sales tax to report or pay.
Discounts:
A discount of 1 percent of the state and local sales tax collected may be deducted if the return, together with full remittance less proper discount, is filed on or before the due date. If you pay more than $20,000, make sure you pay by EFT or the discount will be denied. If you use AutoFile from TaxJar, we’ll automatically take this discount for you if applicable.
And that’s it. You’ve mastered Pennsylvania sales tax filing! Now that sales tax is out of the way, you can get back to what you do best – running your business.
Pennsylvania Sales Tax Resources
For more about Pennsylvania sales tax, check out the Pennsylvania section of the TaxJar blog.