Pennsylvania’s 2026–2027 budget changes how local sales taxes imposed by Philadelphia and Allegheny County apply to sales of tangible personal property and taxable services. Effective January 1, 2026, these local taxes are generally determined by where the product or taxable service is delivered rather than the seller’s location. Although the law takes effect on January 1, 2026, the Pennsylvania Department of Revenue has announced it will defer enforcement of the new requirements until October 1, 2026.
New Destination-Based Sourcing Rules
For taxable sales of tangible personal property or services delivered within Pennsylvania, the applicable sales tax rate generally will be:
- 8% for deliveries to Philadelphia: 6% Pennsylvania sales tax plus 2% Philadelphia local tax
- 7% for deliveries to Allegheny County: 6% Pennsylvania sales tax plus 1% Allegheny County local tax
- 6% for deliveries elsewhere in Pennsylvania: Pennsylvania sales tax only
Previously, the seller’s location generally determined whether Philadelphia or Allegheny County local sales tax applied. Under the new destination-based method, the sales tax rate is determined by where your customer receives the product or service.
