Pennsylvania: Sales Tax Handbook
What purchases are taxable in Pennsylvania?
The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Pennsylvania sales tax.
Contents1.) Taxability of Goods and Services
- General Pennsylvania taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
Section 1: Taxability of Goods and Services
What transactions are generally subject to sales tax in Pennsylvania?
In the state of Pennsylvania, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer. Some examples of items that exempt from Pennsylvania sales tax are food(not ready to eat food), most types of clothing, textbooks, gum, candy, heating fuels intended for residential property, or pharmaceutical drugs.
This means that an individual in the state of Pennsylvania who sells makup would be required to charge sales tax, but an individual who sells college textbooks would not.
Are services subject to sales tax in Pennsylvania?
Services in Pennsylvania are generally not taxable, a beautician or a stenographer in this state does not have to worry about sales tax except if services one offers include selling, repairing or building.
You can find a table describing the taxability of common types of services later on this page.Top
Are shipping & handling subject to sales tax in Pennsylvania?
Suppose an item being shipped is taxable, the shipping and handling charges are also subject to tax, but of the item being shipped is not subject to sales then their shall be no shipping or handling charges.In case the items are both taxable and non-taxable then the shipping and handling charges for the entire shipment are subject to tax.Top
Are drop shipments subject to sales tax in Pennsylvania?
"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Pennsylvania, drop shipments are generally subject to state sales taxes.
Section 2: Taxability of Various Items in Pennsylvania
This table shows the taxability of various goods and services in Pennsylvania. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.
|Products on Amazon.com||TAXABLE *|
|General Clothing||EXEMPT *|
|Food and Meals|
|Grocery Food||EXEMPT *|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Raw Materials||EXEMPT *|
|Utilities & Fuel||EXEMPT *|
|Medical Goods and Services|
|Newspapers and Magazines|
|General Occasional Sales||EXEMPT *|
|Motor Vehicles||TAXABLE *|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||TAXABLE|
|Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts||EXEMPT|
|Pollution Control Equipment|
|General Pollution Control Equipment||TAXABLE *|
|Software and Digital Products|
|Canned Software - Delivered on Tangible Media||TAXABLE|
|Canned Software - Downloaded||TAXABLE|
|Custom Software - Delivered on Tangible Media||EXEMPT|
|Custom Software - Downloaded||EXEMPT|
|Customization of Canned Software||TAXABLE *|
|Vending Machine Sales|
* See notes in category taxability page for details
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