Pennsylvania Sales Tax Rates

Total Range for 2024

6%–8%

pennsylvania department of revenue

Nexus in Pennsylvania

In Pennsylvania, similar to many other states, nexus can be established through two primary avenues, triggering the responsibility for a business to collect and remit sales tax: physical nexus and economic nexus.

Physical Nexus: A business establishes physical nexus in Pennsylvania if it maintains a tangible presence in the state. This includes, but is not limited to:

  • Operating an office, warehouse, or store in Pennsylvania.
  • Employing individuals, representatives, or agents who solicit sales within Pennsylvania on the business’s behalf.
  • Possessing or leasing tangible personal property within Pennsylvania, with certain exceptions.

Economic Nexus: Even in the absence of a physical presence, a business may still establish nexus in Pennsylvania if it meets the state’s economic nexus criteria. Pennsylvania follows a destination-based sourcing rule, meaning sales tax is determined by the customer’s location rather than the seller’s.

As of July 1, 2019, Pennsylvania considers a seller to have economic nexus if their sales of tangible personal property delivered to Pennsylvania customers surpass $100,000 within the preceding twelve months.

Key Points to Note:

  • Economic nexus calculations encompass both taxable and non-taxable sales.
  • Should a business meet the economic nexus thresholds, it is required to register for a sales tax permit promptly and commence collecting sales tax from Pennsylvania customers with immediate effect.

Understanding the nexus status of your business in Pennsylvania is essential for ascertaining your obligations regarding sales tax collection. If uncertain about your nexus status, seeking guidance from a tax professional like Yonda Tax is highly recommended.

Is what you’re selling taxable in Pennsylvania?

Pennsylvania applies sales tax to most tangible personal property, some specified digital products, and certain services related to those products. Here’s a breakdown to help you determine if your product or service is taxable:

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How to Register for Sales Tax in Pennsylvania

If you’ve determined you need to collect sales tax in Pennsylvania, registering for a Sales Tax Account is the next step. Here’s how you can do it:

  1. Online Registration:

The Pennsylvania Department of Revenue (DOR) offers online registration through their myPATH system ([invalid URL removed]). This is generally the fastest and most convenient method. Here’s what you’ll need:

  • Business name and address
  • Contact information (phone number and email)
  • Federal Employer Identification Number (EIN)
  • Business activity start date
  • Projected monthly sales and taxable sales
  • Products or services offered
  1. Mail-in Registration:

If online registration isn’t an option, you can also register by mail using an application form (PA-100 Business Entity Tax Registration).

  • Download the Pennsylvania Business Entity Tax Registration (PA-100) form from the Department of Revenue website.
  • Complete the form following the instructions provided. The form will ask for the same information required for online registration.
  • Mail the completed application form along with any required documentation (such as a copy of your EIN paperwork) to the address listed on the form.

Whichever method you choose, make sure to have all the necessary information readily available to ensure a smooth registration process.

Additional Notes:

  • You may be required to file a surety bond along with your application, depending on your business type and projected sales tax liability. You can find information on surety bond requirements on the DOR website.
  • Once your application is approved, you’ll receive a Sales Tax Account number. You’ll need this number to collect and report sales tax.

For more detailed information and specific instructions, visit the Pennsylvania Department of Revenue website or contact them directly.

How to Collect Sales Tax in Pennsylvania

Once you’ve registered for a Sales Tax Account and received your account number in Pennsylvania, here’s what you need to know about collecting sales tax:

  1. Determine the Tax Rate:

The sales tax rate in Pennsylvania is a combination of a statewide base rate and potential additional local rates.  The base rate is currently 6%. However, many counties and municipalities in Pennsylvania impose additional local sales taxes on top of the base rate.

  1. Apply the Tax Rate:

Once you know the applicable tax rate (statewide base rate + any local rates), simply add it to the taxable sales price of your goods or services to determine the amount of sales tax to collect from the customer.

  • Example: If you sell a product for $100 in a location with a combined sales tax rate of 7.5% (6% base rate + 1.5% local rate), the sales tax amount would be $7.50 (100 x 7.5%). You would collect $107.50 ($100 + $7.50) from the customer.
  1. Keep Good Records:

It’s crucial to maintain accurate records of your sales and sales tax collected. These records are essential for filing sales tax returns and during any potential audits by the Department of Revenue. Your records should include:

  • Sales receipts
  • Tax rates applied
  • Amount of sales tax collected for each transaction
  • Details of exempt sales
  1. Report and Remit Sales Tax:

We’ll cover reporting and remittance of sales tax in a separate section, but for now, focus on collecting the correct sales tax amount based on your location and product/service taxability.

FAQs

How often do you need to file sales tax returns in Pennsylvania?

The frequency of filing sales tax returns in Pennsylvania depends on your business’s total sales tax liability during the third calendar quarter of the previous year. The Department of Revenue will assign you a filing frequency based on this:

  • Typically:
    • Businesses with low sales tax liability (under a certain threshold) will file quarterly.
    • Businesses with moderate liability may file monthly.
    • Businesses with high liability may be required to file more frequently, potentially including prepayments.

The exact thresholds and filing requirements can change, so it’s best to consult the Department of Revenue website or contact them directly for the latest information.

Do you need a seller/reseller permit?

In Pennsylvania, a seller’s permit is called a Sales Tax Account. Yes, you’ll need to register for a Sales Tax Account to collect sales tax in Pennsylvania. You can find instructions on registering for a Sales Tax Account in the “How to Register for Sales Tax in Pennsylvania” section above.

When are Pennsylvania's Returns Due?

Sales tax return deadlines in Pennsylvania depend on your assigned filing frequency (monthly or quarterly) and the last day of the month your account became active.

  • You can find a detailed breakdown of filing deadlines based on your filing frequency and registration month on the Department of Revenue website.
Are there any exceptions to the sales tax on digital products?

There are limited exceptions for certain digital products in Pennsylvania. Here’s a quick breakdown:

  • Taxable: Downloaded digital products like ebooks, audiobooks, and music downloads purchased for personal use are subject to sales tax in Pennsylvania.
  • Non-Taxable: Services related to digital products, like separately charged subscriptions to streaming services or online gaming platforms, may not be taxable.

Contact Yonda Tax Today

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