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The Ultimate Guide To Pennsylvania Sales Tax

Welcome to our handy guide on Pennsylvania sales tax. We'll walk you through everything you need to know, from the specific sales tax rates in different counties and cities across Pennsylvania to answering some of the most common questions. Plus, we'll guide you on how to efficiently collect and file your sales tax in Pennsylvania.

Sales Tax Rate

6.00%

Local Rate?

Yes

Website

Pennsylvania Department of Revenue

Sales Threshold

$100,000

Tax Line

(717) 787-1064

Transactions Threshold

NA

What is Nexus?

You'll need to collect sales tax in Pennsylvania if you have nexus there. There are two main 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.

Calculating Nexus in Pennsylvania

Physical Nexus

If you've got a shop, office, or store in Pennsylvania, that's a physical nexus. Renting or owning property, like storage spaces or warehouses? That's another way. Got employees or a sales crew in Pennsylvania? That counts too.

Economic Nexus

Hitting over $100,000 in sales in Pennsylvania in a year? That's economic nexus. Or, if you've chalked up more than 200 transactions in the state.

Affiliate Nexus

If your business is connected to another entity in Pennsylvania that helps boost your sales, you've got affiliate nexus. This could be a parent company, a subsidiary, or an entity that helps with sales or customer support.

Click-Through Nexus

Pennsylvania doesn't specifically call out click-through nexus. So, just having online referrals from the state doesn't necessarily mean you've got to collect sales tax.

Marketplace Nexus

Selling through big online marketplaces like Amazon or eBay? They'll handle the sales tax for you, no matter your nexus status in Pennsylvania.
Did you know logo

Air is tax-free in Pennsylvania when sold for tire inflation. Wait, air can be taxed at all??

Sales Tax Registration in Pennsylvania

How to Get Your Pennsylvania Sales Tax Permit

  1. Collect Your Business Info: Before jumping in, get all your business details together. This includes your business name, type, owner info, location, and your Federal Tax ID Number (EIN).
  2. Decide How to Register: You've got two ways to get registered:
    1. Online: The quickest way is through the e-TIDES portal. Just hit "Register a New Business" and follow the steps.
    2. By Mail: Prefer the old-school method? Download the Pennsylvania Enterprise Registration Form (PA-100), fill it out, and mail it to the address on the form.
  3. Wait for Your License: After you send off your application, the Pennsylvania Department of Revenue will take a look. They'll send you a sales tax license, typically within 7-10 business days for online applications, or 2-3 weeks if you mailed it in.
  4. Display Your License: Got your license? Great! Make sure it's visible at your business place, or keep it handy if you're selling online.
  5. Start Collecting Sales Tax: With your license all set, you're good to start collecting sales tax on your Pennsylvania sales.

Cost of Registering for a Pennsylvania Sales Tax License

Don't sweat the cost—it's totally free to register for a Pennsylvania sales tax license.

Federal Tax ID for Pennsylvania Sales Tax License

Yes, you'll need an Employer Identification Number (EIN) to register. This is a unique number from the IRS for your business. If you don't have one, you can apply for free on the IRS website.

Other Pennsylvania Registrations to Consider

  • Pennsylvania Department of State: Corporations, LLCs, or limited partnerships need to register here.
  • Pennsylvania Department of Labor & Industry: Got employees? This is where you'll handle unemployment insurance and workers' comp.
  • Local Agencies: Depending on your location and what your business does, you might also need to touch base with city or county offices, zoning boards, or health departments.

Guide to collecting sales tax in Pennsylvania

Is Pennsylvania an Origin or Destination Sales Tax State?

In Pennsylvania, you should calculate sales tax based on where your customer is located. This means adding up the state, county, and local tax rates that apply to your customer's address.

What Sales are Subject to Sales Tax in Pennsylvania?

Pennsylvania's sales tax covers most physical goods and some services. This includes items like clothing (with some exceptions), vehicles, furniture, electronics, and services like dry cleaning and lawn care. Even admission to events and hotel stays fall under this.

Is Software as a Service (SaaS) Taxed in Pennsylvania?

Yep, Software as a Service (SaaS) is taxable in Pennsylvania. It's seen as a service since users access the software remotely.

What is Exempt from Pennsylvaniane Sales Tax?

You won't have to charge sales tax on things like most groceries, prescription drugs, newspapers, and certain sales to government entities or nonprofits. Even farmers get a break on items for farming.

Who is Eligible for Pennsylvania Sales Tax Exemptions?

Nonprofits, government agencies, schools, colleges, and farmers can often skip the sales tax for eligible purchases.

What To Do If Your Customer is Exempt from Sales Tax in Pennsylvania?

If a customer's exempt from sales tax, make sure to get a Pennsylvania Exemption Certificate (REV-1220) from them. Keep this filed safely for audit purposes.

What if You Lose a Pennsylvania Sales Tax Exemption Certificate?

If you lose an exemption certificate, reach out to the customer for a new one. It's key to keep your records straight to avoid issues during audits. Always best to keep these documents safe and organized.
Did you know logo

In Pennsylvania, if you buy a fruit tree, it's tax-free, but the moment you buy a fruit tree that’s already bearing fruit, it's taxable. This quirky tax law seems to encourage a "do-it-yourself" approach to fruit cultivation.

Steps for Filing a Pennsylvania Sales Tax Return

Pennsylvania's sales tax filing and payment schedule is determined by your business's sales tax liability. Here's how it breaks down:
  • Monthly Filers: If your average monthly tax liability is over $600 per quarter but less than $25,000, file monthly. Your returns and payments are due by the 20th of the month following the taxable period.
  • Quarterly Filers: If your tax liability is less than $600 in the third calendar quarter but more than $300 annually, you'll file quarterly. Quarterly returns are due by the 20th of the month following the quarter's end.
  • Semi-Annual Filers: If your annual tax liability is $300 or less, you're a semi-annual filer. Reports for January through June are due by August 20, and reports for July through December are due by February 20 of the following year.

How to File a Pennsylvania Sales Tax Return

Online Filing: The easiest way to file is online. Log into your e-TIDES account (or create one if needed), select the right tax type, input your sales data, review, and submit your return. Then, pay what you owe electronically.

Paper Filing: Prefer paper? Download the PA-3 form, fill it in with your sales data, and mail it with your payment to the provided address. Don’t forget to keep a copy for your records.

Penalties for Late Filing in Pennsylvania

  • Late Filing: The penalty can be 5% of the unpaid tax for each month (or part thereof), maxing out at 25%.
  • Late Payment: A 5% penalty of the unpaid tax is standard.
  • Underpayment: For negligence or fraud, expect a 50% penalty on the underpaid amount.
  • Interest: Any unpaid taxes and penalties will accrue interest from the due date until full payment.

Sales Tax Incentives in Pennsylvania

  • Keystone Opportunity Zones: Businesses in these zones may get sales tax exemptions and other tax perks.
  • Manufacturing and Processing Exemption: If your business is in manufacturing or processing, you might be exempt from sales tax on certain equipment.
  • R&D Exemption: Conducting research and development? You could qualify for exemptions on related purchases.
  • Building Materials Exemption: For qualified construction projects, certain materials might be exempt from sales tax.

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Top 5 Tips for Filing Sales Tax in Pennsylvania

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