Pennsylvania
How 2023 Sales Tax are calculated in Pennsylvania
The state general sales tax rate of Pennsylvania is 6%. Pennsylvania cities and/or municipalities don't have a city sales tax.
Every 2023 combined rates mentioned above are the results of Pennsylvania state rate (6%), the county rate (0% to 2%). There is no city sales tax for the Pennsylvania cities. There is no special rate for Pennsylvania.
Sales Tax in Pennsylvania: An Overview
Pennsylvania's sales tax plays a significant role in funding state services and programs. This tax applies to the sale of goods and certain services within the state. It is complemented by the use tax, which ensures tax compliance for goods or services purchased outside Pennsylvania but used within the state.
Applicable Taxes in Pennsylvania
- Sales Tax: Applies to retail sales of tangible personal property and some services within Pennsylvania.
- Use Tax: Imposed on goods or services purchased outside the state but used, stored, or consumed in Pennsylvania.
- Local Sales Taxes: Pennsylvania does not allow local governments to impose their own sales taxes, except for Philadelphia and Allegheny County.
History of Pennsylvania Sales Tax
Pennsylvania introduced its sales tax in 1953, primarily as a means to fund education and infrastructure projects. Over the years, the scope of taxable items and exemptions has evolved, reflecting changes in economic activity and legislative priorities.
Key milestones include:
- Initial implementation in 1953.
- Amendments to include certain services and exemptions over the decades.
- The establishment of the use tax to address remote purchases.
Taxability and Exemption List
Below is a simplified view of taxable and exempt items in Pennsylvania:
| Taxable Items | Exempt Items |
|---|---|
| Tangible personal property (e.g., electronics) | Groceries (except ready-to-eat food) |
| Clothing accessories and luxury items | Clothing for general use |
| Certain digital goods | Prescription medications |
| Amusement and entertainment services | Most professional services (e.g., legal) |
| Non-prescription drugs and vitamins | Textbooks and learning materials |
Historical table of Pennsylvania sales tax rates
Here is a historical table focusing on the sales tax history of Pennsylvania
| Year | Event/Change | Rate | Details |
|---|---|---|---|
| 1953 | Sales Tax Introduced | 1% | Pennsylvania implemented its first sales tax to support education and infrastructure. |
| 1956 | Rate Increased | 3% | Adjusted due to rising state expenses and expanding public services. |
| 1959 | Rate Increased | 4% | Further revenue needs prompted another rate hike. |
| 1968 | Exemptions for Necessities Added | 4% | Groceries and general clothing were exempted while maintaining the same rate. |
| 1971 | Introduction of Use Tax | 4% | Use tax enacted to cover out-of-state and remote purchases. |
| 1977 | Rate Increased | 5% | Funding for public education and infrastructure required an additional percentage. |
| 1991 | Expansion to Select Services | 6% | Services such as entertainment became taxable, and the rate was raised. |
| 2008 | Online Sales Tax Compliance Added | 6% | Focused on improving collection of taxes from e-commerce and remote sellers. |
| 2019 | Marketplace Facilitator Law | 6% | Out-of-state sellers and digital goods became subject to tax compliance. |
For more details, please refer to the official Commonwealth of Pennsylvania website.
Pennsylvania state rate(s) for 2023
Lowest possible rate: 6% (e.g., , Pennsylvania)
Other common rates: 7% .
Highest possible rate: 8% (Bala Cynwyd, Pennsylvania)
Average combined rate across Pennsylvania: 6.159%