How to File and Pay Sales Tax in PA

Pennsylvania imposes a sales tax on the sale, rental, or use of tangible personal property and certain services. The statewide tax rate is 6%, but specific jurisdictions, like Allegheny County and Philadelphia County, levy additional local sales taxes. These can increase the total rate to 7% or 8%, respectively. Businesses are responsible for collecting this tax from customers and remitting it to the Commonwealth.

Understanding Your PA Sales Tax Obligation

A business’s requirement to collect Pennsylvania sales tax hinges on “nexus,” which signifies a connection to the state. Nexus is traditionally established by having a physical presence, such as an office, warehouse, or store. Employing individuals who work within the state or storing inventory in a Pennsylvania facility also creates this physical link.

Beyond physical presence, Pennsylvania has rules for economic nexus that affect remote sellers. A business with no physical footprint in the state is required to register and collect sales tax if it had more than $100,000 in gross sales to Pennsylvania customers in the previous calendar year.

Most tangible personal property is taxable, from furniture and electronics to prepared food. Certain services, such as lobbying or building maintenance, are also specified as taxable. Conversely, many common items are exempt from sales tax, including most food for home consumption, candy, gum, and most clothing, with exceptions for formal apparel and athletic gear.

Preparing to File Your Sales Tax Return

Before a business can file its first sales tax return, it must obtain a PA Sales Tax License from the Department of Revenue. This is accomplished through myPATH, the department’s online portal for business tax registrations. The application requires foundational details about the business, including:

• Its legal name and any trade names
• Physical address
• Federal Employer Identification Number (EIN)
• Business structure, such as a sole proprietorship, partnership, or corporation
• The names and addresses of the owners, partners, or corporate officers

Once registered, the Pennsylvania Department of Revenue will assign the business a filing frequency. This schedule, which can be monthly, quarterly, or semi-annually, is based on the business’s anticipated tax liability. Businesses with higher tax liabilities are required to file more frequently.

To prepare for each filing, a business must track its financial data, including total gross sales, sales of non-taxable items, and the amount of sales tax collected. Maintaining organized records is necessary for accurate filing and to avoid potential penalties.

How to File and Pay Through myPATH

With a sales tax license secured, businesses can file their returns and make payments through Pennsylvania’s online portal, myPATH. After logging into the system, users navigate to the sales and use tax section to begin the filing process. The electronic return form will have designated fields for entering figures like total gross sales, non-taxable sales, and the total tax due.

The myPATH system calculates the final amount owed based on the data entered. The primary methods for remitting the tax are Electronic Funds Transfer (EFT) from a bank account or by credit or debit card. Businesses should be aware that using a card may involve a processing fee charged by a third-party vendor.

After submitting the return and payment, the system will generate a confirmation number. It is important to save this confirmation and a complete copy of the filed return for the business’s records. The due date for the next filing period is the 20th of the month following the end of the reporting period.