2024 Guide to Sales Tax in Philadelphia, Pennsylvania

Pennsylvania Sales Tax Rate
Philadelphia County Sales Tax Rate
Special Sales Tax Rate
Philadelphia Sales Tax Rate

If you sell remotely to customers in Philadelphia or Philadelphia County, you might be wondering whether you need to collect Philadelphia sales tax and, if so, what the sales tax rate is. This article will break down all the important things you need to know about sales tax in Philadelphia, Pennsylvania.

We’ll explain things like the difference between the Philadelphia County sales tax rate and the sales tax rates in individual cities in the county, how to calculate sales tax in Philadelphia, and help you figure out if your business needs to charge sales tax. We’ll even share the sales tax rates in the top 10 most populated zip codes in Philadelphia and walk you through easy ways to make sure you remain sales tax compliant in Philadelphia.

What is the Sales Tax in Philadelphia?

Philadelphia has a combined sales tax rate of 8.0%. In Pennsylvania, the sales tax rate can be made up of three different sales tax rates:

  • The Pennsylvania state sales tax rate: 6.0%
  • A Philadelphia County sales tax rate: 2.0%
  • The Philadelphia city sales tax rate: 0.0%
  • Any special sales tax rates – these are charged to fund district-wide initiatives: 0.0%

What is Philadelphia County Sales Tax?

Philadelphia County’s sales tax rate is also 2.0%. However, often county sales tax rates are lower than the sales tax rate charged in cities within that county. That’s because some cities might charge additional rates or be subject to a special tax rate that only applies to certain cities in that county.

In Philadelphia County, the amount charged from one city to another can vary considerably due to some cities that charge a higher rate.

Tax Rates in Philadelphia, Pennsylvania

Wondering how much sales tax rates vary in Philadelphia? Here’s a list of the top 10 zip codes in Philadelphia and the sales tax rates they charge by zip code:

ZIP Code State Sales Tax County Sales Tax City Sales Tax Special Sales Tax
19104 6.0% 2.0% 0.0% 0.0%
19111 6.0% 2.0% 0.0% 0.0%
19120 6.0% 2.0% 0.0% 0.0%
19124 6.0% 2.0% 0.0% 0.0%
19134 6.0% 2.0% 0.0% 0.0%
19140 6.0% 2.0% 0.0% 0.0%
19143 6.0% 2.0% 0.0% 0.0%
19144 6.0% 2.0% 0.0% 0.0%
19148 6.0% 2.0% 0.0% 0.0%
19149 6.0% 2.0% 0.0% 0.0%

Other Tax Rates for Philadelphia

We’ve now shared the main tax rates for Philadelphia. Here are some other tax rates that you might have to charge in that city and state.

Type of Sales Tax Rate
Non-Nexus Sellers – State Use Tax 6.00%
Non-Nexus Sellers – County Use Tax 2.00%
Non-Nexus Sellers – City Use Tax 0.00%
Non-Nexus Sellers – Special Use Tax 0.00%
Out-of-State Sellers – State Use Tax 6.00%
Out-of-State Sellers – County Use Tax 2.00%
Out-of-State Sellers – City Use Tax 0.00%
Out-of-State Sellers – Special Use Tax 0.00%
Marketplace Facilitators – State Sales Tax 6.00%
Marketplace Facilitators – County Sales Tax 2.00%
Marketplace Facilitators – City Sales Tax 0.00%
Marketplace Facilitators – Special Sales Tax 0.00%

What Items are Taxable in Philadelphia?

In Pennsylvania, not all items are taxable. For example, in many states, prescription drugs are exempt from sales tax. The best way to ensure you’re charging taxes on the right items is to add a Tax Information Code (TIC) to all the items you’re selling so that the correct tax is charged. A TIC is a number assigned to a category of goods or services.

Here is a list of some of the things that are taxable in Philadelphia:

Item Description TIC Number
Apparel Clothing and footwear TIC1001
Electronics Consumer electronics TIC1002
Furniture Household furniture TIC1003

What Items are Exempt from Taxes in Philadelphia?

In Pennsylvania, there are a number of items that are exempt from taxes. States typically make items tax exempt to encourage their purchase or because the items are essentials.

The easiest way to make sure you don’t accidentally charge sales tax on an item that’s exempt is to add a Tax Information Code (TIC) to all your items. A TIC is a number that groups similar goods or services into one category.

Here is a list of some of the things that are tax exempt in Philadelphia:

Item Description TIC Number
Groceries Unprepared food items TIC2001
Prescription Drugs Medications prescribed by a doctor TIC2002
Medical Devices Durable medical equipment TIC2003

Who Needs to Collect Sales Tax in Philadelphia?

A business only needs to collect sales tax in Philadelphia if they have either achieved physical nexus or economic sales tax nexus in Pennsylvania.

How do you do that? By making sales to residents of Philadelphia County or another city in Pennsylvania either by having a physical presence in Pennsylvania or doing a certain amount in sales to residents of Pennsylvania in a year.

What is Physical Nexus in Pennsylvania?

Physical nexus in Pennsylvania essentially just means that your business has a physical presence of some kind in the state. This isn’t just something you qualify for if your headquarters are in the state – there are a lot of ways that out-of-state sellers can have a physical presence in Pennsylvania despite being based elsewhere.

How you qualify for physical nexus in Pennsylvania (full details):

  • A physical location in Pennsylvania is the easiest way to qualify for physical nexus. That could include having your headquarters, a satellite office, a warehouse, a distribution center, a showroom, or some other form of physical location.
  • If you have affiliates who represent your business in certain kinds of operations in the state of Pennsylvania, this could also mean you qualify for physical nexus.
  • Have employees in the state? That could qualify you for physical nexus in Pennsylvania.
  • If you have physical property that you rent or lease to someone in Pennsylvania, your business might also have physical nexus there.

What is Economic Nexus in Pennsylvania?

So, what if you don’t have any physical ties to the state? In Pennsylvania, you can have economic nexus in the state simply by making $100,000 worth of sales in the state in a year or 100 transactions.

How you qualify for economic nexus in Pennsylvania (full details):

  • You need to count all sales made by your business into Pennsylvania, including wholesale sales, towards your $100,000 economic nexus threshold and 100 transactions.
  • The only exception is that you don’t have to count sales you made through a qualifying marketplace where the marketplace facilitator is collecting taxes on your behalf.
  • When you meet the threshold for economic nexus, you need to register for sales tax in Pennsylvania immediately and begin collecting and remitting sales taxes in Pennsylvania.

How to Get a Sales Tax Permit in Philadelphia?

If you reach either physical or economic nexus, you’ll need to get a sales tax permit in Pennsylvania for all your sales across the state, including in Philadelphia. Getting your sales tax permit is easy and free.

Here are the steps:

  1. Go to the Pennsylvania Department of Revenue website.
  2. Answer a few questions about your business.
  3. Allow the wizard to identify what permits you need and register you for them.

That’s it!

See the State of Pennsylvania’s Sales Tax website for more info.

How Do You Charge the Right Amount for Sales Tax in Philadelphia?

Want to make sure you charge the right amount in sales tax in Philadelphia? Since there are cities in Philadelphia County that charge different rates, it can be complicated to ensure you always charge the right amount – especially on remote sales.

Here’s how to stay sales tax compliant:

  1. Manually check and input rates: Managing your sales taxes yourself is possible since the state’s website will keep you updated on sales tax rates in cities across the state. However, there are a lot of cities in Philadelphia County, let alone across the whole state. Sales tax rates also could change at various times in the year and charging the wrong amount could be a costly mistake. Checking monthly and updating your local, district, and tax rates in your ecommerce platform is necessary to make sure you’re always charging the right amount in sales tax.
  2. Use a sales tax compliant software solution: Doing things manually isn’t just time-consuming but it’s also no longer necessary. There is affordable sales tax compliance software like TaxCloud that automates everything for you. Why track and update sales tax rates in every tax jurisdiction you are required to collect taxes in when you can outsource that work?

How Do You File and Remit Sales Tax in Philadelphia?

Wondering if you need to file sales tax returns in the city or county of Philadelphia? Thankfully, the answer is no. If you have sales tax nexus in Pennsylvania, you can collect sales taxes from across the state and file just one state-wide return. When you remit the sales tax you collected to the State of Pennsylvania, they’ll then remit those funds to whatever city, district, or county where those taxes were collected.

Wish you didn’t have to figure all this out on your own? Outsourcing your sales tax compliance to a company like TaxCloud is the easiest way to get all this done quickly and easily.

What Should You Do Next?

Step 1: Find out if your business has sales tax nexus in Pennsylvania.

Step 2: If your business qualifies for either physical or economic nexus in Pennsylvania, you need to register for sales tax with the state.

Step 3: Then, you need to start collecting sales tax on your sales to customers in Pennsylvania.

Step 4: File your first sales tax return by the next state deadline.

If you would like to learn more about TaxCloud, please don’t hesitate to contact us.