How Much Is Sales Tax in PA & What Is Taxable?
Demystify Pennsylvania's sales tax. Learn how it impacts your purchases, from rates to what's included and excluded.
Sales tax in Pennsylvania is a consumption tax applied to the sale of tangible goods and certain services within the state. This tax generates revenue that supports state government operations and public services. Understanding which purchases are subject to sales tax, and which are exempt, can help consumers manage their finances effectively. The sales tax system in Pennsylvania involves a statewide rate, with some specific local variations in certain areas.
The Standard Sales Tax Rate in Pennsylvania
Pennsylvania levies a statewide sales tax rate of 6% on the purchase price of taxable goods and services. This rate is generally uniform across most of the Commonwealth. When making a taxable purchase, the sales tax is calculated by applying this percentage to the item’s cost.
While the state rate is consistent, two specific counties impose additional local sales taxes. Allegheny County, which includes Pittsburgh, adds an extra 1% local sales tax, resulting in a combined rate of 7% in that area. Philadelphia also has an additional 2% local sales tax, bringing its total combined rate to 8% for taxable transactions.
Goods Subject to Sales Tax
In Pennsylvania, the sales tax primarily applies to the retail sale of tangible personal property unless specifically exempted by law. Common examples of taxable goods are electronics, furniture, household appliances, and general retail merchandise.
Most prepared foods and beverages, such as restaurant meals, takeout orders, and hot food items, are also subject to sales tax. Certain digital products are also taxable. Charges for shipping, handling, or delivery are taxable if they relate to the shipment of taxable goods.
Services Subject to Sales Tax
While many services are not subject to sales tax in Pennsylvania, state law specifically enumerates certain services that are taxable. These typically involve work performed on tangible personal property or specific business-related activities. Examples of taxable services include repair services for items such as automobiles, appliances, and other tangible goods.
Cleaning services, such as dry cleaning and carpet cleaning, are also subject to sales tax. Other taxable services include landscaping, certain telecommunication services, lobbying, credit reporting, secretarial, employment agency, self-storage, and catering services.
Exemptions from Sales Tax
Pennsylvania law provides several common exemptions from sales tax, primarily for essential goods and services. Most food items purchased for home consumption, such as groceries, are exempt from sales tax. This exemption includes candy, gum, water, and ice.
Most clothing is also exempt from sales tax, with exceptions for items like formal wear or furs. Prescription and non-prescription drugs, along with medical supplies, are also exempt from sales tax. Residential utilities, including electricity, natural gas, water, and heating fuels like oil, coal, and firewood, are not subject to sales tax. Certain publications, such as newspapers, magazines, and textbooks, are also exempt.