We’ve been taking a look at what each state has to say about sales tax. Today is Pennsylvania’s turn. So if you have sale tax nexus in Pennsylvania – or think you might – read on to find out what you need to know.
You’re a merchant living anywhere but Pennsylvania
Your business exists outside of the Pennsylvania state lines and you have no sales tax nexus in the state. You’re in luck! You don’t have to worry about Pennsylvania sales tax.
You live and/or operate your business in Pennsylvania
If your business exists within Pennsylvania state lines, you have sales tax nexus in Pennsylvania. Here’s what the Pennsylvania Department of Revenue has to say about who has sales tax nexus in the state (link opens in PDF):
Fortunately, Pennsylvania is an origin-based sales tax state and the sales tax rate in Pennsylvania is 6% across the board except for just two exceptions, so it’s easy to figure out how much sales tax to charge your buyers.
The exceptions are:
- A 1% local tax is added to purchases made in Allegheny County
- A 2% local tax is added to purchases made in Philadelphia
So if you have an office, warehouse, employee or in one of the two above areas, you’ll have to add 1 or 2% to the amount of sales tax you collect. Read more about how Amazon treats sales tax in Pennsylvania elsewhere on the blog.
You live out-of-state but use a 3rd party fulfillment service like FBA
While your business is in another state entirely, you figure out you otherwise have nexus in the state of Pennsylvania, maybe through a 3rd party fulfillment service like FBA.
It could possibly change one thing, though: if your nexus is within Philadelphia or Allegheny County, you could face additional taxes as outlined in the above section.
Keep in mind there are several FBA warehouses in the state: two in Breiningsville (Lehigh County), one in Carlisle (Cumberland County), one in Hazleton (Luzerne County), and one in Lewisberry (York County).
Notice neither of these are in Philadelphia or Allegheny count. So if you’re an Amazon FBA Seller, you should collect 6% sales tax from Pennsylvania buyers.
Filing sales tax in Pennsylvania
As far as collecting and remitting payments, all new businesses are on a quarterly system their first year. After the first year you’ll be assigned either a semi-monthly, monthly, quarterly, or semi-annual filing schedule based on how much sales tax your company collects.
If you need to file a sales tax return in Pennsylvania, TaxJar has your back. You can now enroll in AutoFile for the state of Pennsylvania and we’ll automatically file your sales tax return for you! Find out more at TaxJar.
Sales tax on shipping
From the website:
If the item(s) being shipped is taxable, the shipping and handling charges are also subject to tax. If the item(s) being shipped is not subject to Sales Tax, neither are the shipping and handling charges. In the case where items being shipped are of a mixed (both taxable and nontaxable) nature, then the shipping and handling charges for the entire shipment are subject to tax.
So it seems Pennsylvania says to collect sales tax on shipping unless the item isn’t subject to tax at all.
Summary: Pennsylvania is an origin-based state with few exceptions
For the most part Pennsylvania is straightforward – the statewide sales tax rate is 6% with only a couple exceptions. Those two exceptions are Allegheny County, which adds 1%, and Philadelphia, which adds 2%.
If you have sales tax nexus in Pennsylvania, most of the time you’ll only have to worry about the 6% state tax. If your business is in the two places listed above, then the tax rate is 1 or 2% higher.
The sales tax filing schedule for new businesses is strictly quarterly for the first year. After that, though, you’ll be changed to a different schedule depending on how much sales tax you bring in. It could be monthly, semi-annual, or even stay quarterly, but it all depends on the amount of money you’re collecting.