Pennsylvania is a constituent state of the United States of America, officially known as the Commonwealth of Pennsylvania. This state is located in Great Lakes, Appalachian, Northeastern, and Mid-Atlantic regions of the country. While it shares its borders with New Jersey to the east, Ohio to the west, New York to the north, Maryland to the south, Delaware to the southeast, West Virginia to the southwest, and Lake Erie to the northwest.
This Commonwealth-State the 5th-most populous and the 33rd-largest state by area. It is loaded with rich American history, superb educational opportunities, stunning landscapes, chocolate galore, and affordable living options. This state also has a 6th largest GDP in America and is an industrial and agricultural powerhouse, making it a heaven for thriving startup and creative entrepreneurs.
Mulling over to relocate, expand, or start your business in the Commonwealth of Pennsylvania? Well, you should learn to deal with PA sales tax.
Our experts have worked days and nights to bring you a comprehensive guide along with a handy Pennsylvania Sales Tax calculator, to educate you with all the essentials of PA Sales Tax.
So let's dig in!
Businesses and Sellers who have Nexus are required to pay Sales tax to Pennsylvania on retail sales, consumption, rental of particular tangible personal property, digital products, and specific services (relating to property and on the charge for specific business services). They must collect, manage, and transfer it to the Pennsylvania Department of Revenue while staying in compliance with state laws and avoid penalties and interest.
The sales tax determined on four factors:
To calculate Sales Tax in Pennsylvania, follow the steps below:
As a business owner, you are only required to collect sales tax if you are eligible for collecting sales tax and have Sales Tax Nexus in Pennsylvania State. And to determine your Nexus in Pennsylvania, you must have any of the following:
Once you have determined that your Nexus is with Pennsylvania, next is to deduce the Sales Tax rate (State + Local Sales Tax) applicable on your product, for which you can refer the tables below:
Once you have determined that your Nexus is with Pennsylvania, next is to deduce the Sales Tax rate (State + County) applicable to your product, for which you can refer the points below:
After determining the sales tax rate according to the location and type of purchases, it is easy to calculate the sales tax amount charged on the product and gross price (amount after tax) of a product.
Example # 1:
For instance, you are selling a LED TV on your store in Bethel Park, Pennsylvania, having a net price tag of $555. The amount that a buyer has to pay (including sales tax) on a check out would be:
Net Price (amount before Tax) of a LED TV: $555
Total Sales Tax rate: 0.00% (Afton) + 1.00% (Allegheny County) + 6.00% (Pennsylvania State) = 7.00%
Total Sales Tax amount = $555 x 7.00% = $38.9
Gross Price (Amount after Tax) = 555 + 38.9 = $593.9
It means the buyer has to pay $593.9 for a LED TV on a cash counter.
Using our Sales Tax Calculator:
All of the steps mentioned above can be skipped to get an instant result using our Sales Tax Calculator. All you need is:
Our calculator will automatically calculate the result, and represents it in 3 different forms, as shown in the image below:
In the example above, we have explained to you to calculate the Sales Tax amount payable in a product, and the Gross Price of the Product.
But there are also instances when you are required to deduce how much sales tax buyer has actually paid on a product or you may want to check the accuracy of the sales tax indicated on your item's receipt.
This is where the Reverse Sales Tax Calculation Kicks in. And luckily, our Pennsylvania Sales Tax Calculator can perform this calculation like a Pro.
Your buyer has paid $850 for a Home Theatre at your store in Adams Basin, Pennsylvania. Now the buyer is inquiring how much a Home Theatre actually cost before the sales tax was added. So you need to follow the steps below to determine the amount before tax (net price) of a Home Theatre:
Gross Price (Amount after Tax) of Home Theatre: $850
Total Sales Tax rate: 0.00% (Philadelphia) + 2.00% (Philadelphia County) + 6.00% (Pennsylvania State) = 8.00%.
Gross Price with sales tax = [Net Price × (tax rate in decimal form + 1)]
850 = [Net Price x ((8.00/100) + 1)]
850 = Net Price x 1.08
$787 = Net Price
So the original Price (net price) of a Home Theatre was $787.
Using our Sales Tax Calculator:
You can also use our Sales Tax Calculator for Reverse Sales Tax calculation to skip the aforementioned manual method. All you need is:
Our calculator will automatically calculate the result and represents it in 3 different forms.
Answer: The retail sale, consumption, rental of particular tangible personal property, digital products, and specific services (relating to property and on the charge for specific business services) are subject to sales tax in Pennsylvania.
Answer: Most clothing items are exempted from the Pennsylvania Sales Tax.
Answer: Most medicine, most groceries, candy and gum, internet service, textbooks, computer services, clothing and footwear, toilet paper, sales for resale, farm supplies, internet service, fitness club fees, and residential fuels including natural gas, firewood, and electricity are sales tax free in Pennsylvania.
Answer: No, most groceries, candy, and gum except Alcohol are exempted from sales tax in Pennsylvania – PA.