Recent changes in Pennsylvania local sales tax law shifts local sales tax collection from the point of sale to the point of destination. In other words, the applicable local tax is now determined by where the product or service is delivered, rather than where the vendor is located.
Under Act 21 of 2026, businesses that are required to collect Pennsylvania’s 6% sales tax must now also collect the applicable local tax on taxable products or services where they are delivered. This has implications for any local business serving customers in Philadelphia or Allegheny Counties:
- Philadelphia County: An additional 2% must be added to the statewide 6% rate
- Allegheny County: An additional 1% must be added to the statewide 6% rate
This law took effect retroactively for tax years after December 31, 2025. However, the Pennsylvania Department of Revenue will not begin enforcement until October 1, 2026, giving businesses time to update their procedures.
If your business serves customers in Philadelphia or Allegheny Counties, review your customer addresses, invoicing practices, and accounting or point-of-sale systems now so you’re ready by the October 1st deadline.
Learn more through the Pennsylvania Department of Revenue.
If you have any questions, we are here to help. Contact us online or call 215-723-4881.