Most businesses starting in Pennsylvania that are selling a product or offering certain services will need to register for a sales tax license. This is commonly referred to as a seller’s permit, sales tax permit, sales tax number or sales tax registration.
The sales tax license is obtained through the Pennsylvania Department of Revenue as a part the Pennsylvania Enterprise Registration. In addition to registering for sales taxes, this registration is used to register a new business and withholding taxes.
Check out the rest of this guide to find out who needs a sales tax license, what products and services are taxable, how to register for a permit and reporting requirements.
Who needs a sales tax license in Pennsylvania?
A business must register for a sales tax license in Pennsylvania when:
- A business has “nexus” (significant presence in the state) such as a retail store, office or warehouse where products are produced, stored and/or delivered
- Selling products and taxable services in Pennsylvania (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- Employees (including sales representatives or agents) are working in Pennsylvania
- An online business located in Pennsylvania is selling taxable products to Pennsylvania residents
- An out-of-state business selling over $100,000 in taxable goods and services to Pennsylvania.
What products and services are taxable in Pennsylvania?
There are a few exceptions, but almost all physical products are taxable when sold at retail in Pennsylvania. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Drugs, medical supplies, grocery store food and school textbooks are tax-exempt.
Labor in most cases isn’t taxable in Pennsylvania. For instance, let’s say you broke the screen to your cell phone and take it to a cell phone repair shop to have it fixed. Sales tax would be added to the selling price of the new screen and any additional parts to fix the phone. The labor to replace the screen isn’t taxable. However, a business that makes furniture will indirectly have sales tax on labor. In this instance, let’s say this business is building a dining room table for a customer. Through labor, the pieces of wood are shaped, sanded and painted to build this piece of furniture. While the labor isn’t directly taxable, sales tax is charged to the final selling price of the table.
Most digital products are taxable in Pennsylvania.
Most services aren’t taxable in Pennsylvania, however there are a few exceptions, some of which include:
- Short-term lodging
- Secretarial or editing services such as letter writing, resume writing or document editing
- Pest control services
- Building maintenance or cleaning services
- Self-storage services
- Lawn care services
See the full list of taxable items in Pennsylvania.
How to register for a sales tax license in Pennsylvania
Information needed to register includes:
- Date operations began
- Fiscal year end
- Federal Employer Identification Number (FEIN)
- Business Legal Name
- Business Trade Name
- Business physical address and mailing address
- Doing Business As – if applicable
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Names, SSN, date of birth, title and addresses of owners/officers/members
- Establishment’s business activities
How much does a sales tax license cost in Pennsylvania?
There is no cost for a sales tax license in Pennsylvania.
How long does it take to get a Pennsylvania sales tax license?
Expect 24-48 hours to receive a sales tax license.
Do you have to renew your Pennsylvania sales tax license?
The sales tax license is renewable every five years. Be mindful that if any information about the business changes such as the mailing address, additional locations or change in ownership, those changes need to be updated with the Department of Revenue.
Sales tax reporting
How is sales tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it to the Pennsylvania Department of Revenue using the E-tides filing.
How much sales tax is charged?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide 6% sales tax, Allegheny and Philadelphia County levy additional taxes. More details on Pennsylvania sales tax rates is available from the PA Department of Revenue.
When are Pennsylvania sales tax returns due?
The Department of Revenue will determine a filing frequency based on the expected volume of sales, which will be monthly, quarterly or annually. Generally, a business collecting between $200 and $8,333 each month will file monthly.
Filings are due the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, in which case would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
Sales tax on purchases for resale
A business is able to purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer who will then charge sales tax to the end user of the item.
Wholesalers and distributors will require a sales tax number and complete a Pennsylvania Sales Tax Exemption Certificate to document the items being purchased are for resale.
If you have questions about sales and use tax, the Pennsylvania Department of Revenue has the Retailer’s Information Guide or they can be contacted by calling 717-787-3653.