Pennsylvania Sales Tax and Invoicing Rules for 2026

TL;DR: Pennsylvania has a 6% state sales tax, with an additional 2% in Philadelphia and 1% in Allegheny County. Most clothing, groceries, and prescription drugs are exempt. Economic nexus applies at $100,000 in annual sales.

State sales tax rate

Pennsylvania levies a 6% statewide sales and use tax. Two local additions exist: Philadelphia adds 2% (total 8%) and Allegheny County (Pittsburgh area) adds 1% (total 7%).

No other county or municipality may impose additional sales tax. This makes Pennsylvania simpler than many states — outside of Philadelphia and Allegheny County, the rate is a flat 6% statewide.

Pennsylvania uses destination-based sourcing for determining which local rate applies.

Nexus rules

Physical nexus is established by offices, employees, warehouses, or inventory in Pennsylvania.

Economic nexus applies if you exceed $100,000 in gross sales to Pennsylvania buyers in the current calendar year. There is no transaction count threshold.

Pennsylvania was among the early adopters of economic nexus provisions post-Wayfair. Marketplace facilitators must collect and remit tax on third-party sales. Affiliate and click-through nexus provisions also apply.

Invoice requirements

The Pennsylvania Department of Revenue expects sellers to maintain records that support every transaction. Invoices should show:

• Seller's name, address, and sales tax license number
• Date of sale
• Buyer details
• Itemized description of goods or services
• Taxable and exempt amounts clearly separated
• Tax rate, tax collected, and total

Because Pennsylvania exempts many common categories (clothing, food), properly categorizing items on invoices is critical. Keep exemption certificates (REV-1220 for resale) and maintain records for at least four years.

Exemptions and special cases

Most clothing is exempt in Pennsylvania — no tax on everyday apparel. Groceries (unprepared food and beverages) are exempt. Prescription drugs and most nonprescription drugs are exempt. Textbooks are exempt.

Residential utilities (gas, electricity, fuel oil) are exempt. However, restaurant meals, prepared food, and candy/gum are taxable.

SaaS is generally taxable in Pennsylvania — the state treats canned software, including cloud-based delivery, as taxable. Custom software and certain digital goods have nuanced treatment. Computer services like hardware maintenance are also taxable.

Filing frequency and deadlines

Filing frequency is assigned based on tax liability:

• Monthly — liability over $600/quarter
• Quarterly — liability between $225 and $600/quarter
• Semi-annual — liability under $225/quarter but over $75/semi-annual
• Annual — liability under $75/semi-annual

Monthly returns are due the 20th of the following month. Quarterly returns are due April 20, July 20, October 20, and January 20.

Pennsylvania offers a 1% vendor discount (capped at $25 per filing) for timely filing and payment.

Penalties for non-compliance

Late filing incurs a penalty of 5% of the unpaid tax per month, up to 25%. Underpayment interest accrues at the rate set by the Department of Revenue.

Failure to register when required results in back-assessment of taxes plus penalties. The Department conducts audits with particular focus on proper exemption documentation — sellers who fail to collect exemption certificates face liability for uncollected tax.

FAQ

Is all clothing exempt in Pennsylvania?

Most everyday clothing is exempt, but certain items are taxable: formal wear rentals, fur clothing, sporting equipment (cleats, pads), and accessories like jewelry and handbags. The exemption covers shirts, pants, dresses, coats, shoes, and similar apparel.

Is SaaS taxable in Pennsylvania?

Yes. Pennsylvania taxes canned software regardless of delivery method, including cloud-based access. If you sell SaaS to Pennsylvania customers, you must collect sales tax. Custom software designed for a single customer may be exempt — the distinction matters.

Do I need to charge the Philadelphia 2% surtax for deliveries to Philadelphia?

Yes. If goods are delivered to a Philadelphia address, charge the full 8% combined rate (6% state + 2% Philadelphia). The destination of delivery determines whether the local surtax applies.

Verify rates for any Pennsylvania address with InvoiceQuickly's tax rate lookup.