Pennsylvania Sales Tax Guide
Chapter 8: Understanding Pennsylvania sales tax rules for shipping & handling
As an ecommerce seller, it’s important to stay in sales tax compliance in every state in which you do business. And if you operate out of Pennsylvania or have nexus in that state, you’ll need to know when to charge sales tax on the shipping and handling of your products.
Fortunately, Pennsylvania makes it easy for ecommerce sellers to stay in compliance because its rules are simple and straightforward. Here’s a rundown of what you should know.
Is Shipping Taxable in Pennsylvania?
The Pennsylvania Department of Revenue says that if the product being shipped is taxable, you should charge sales tax for the shipping or delivery of that product. On the other hand, if the product is not considered taxable, then you should not apply sales tax to the shipping or delivery charges.
Impact of Delivery Methods
If you ship or deliver the product yourself and charge a fee for it, you’ll have to follow the above rules. For instance, if you charge the customer $50 to deliver a sofa, you will have to charge sales tax on that fee because the product is taxable. But if you charge $50 to deliver groceries, you should not apply sales tax to that delivery charge because groceries are tax-exempt.
However, if the customer pays a third-party vendor to pick up the item and ship it to them, you are not responsible for collecting sales tax on the delivery.
Shipping Tax-Exempt Purchases
Unlike some other states, Pennsylvania law doesn’t ask you to allocate the shipment to taxable and exempt portions. Instead, their law is straightforward: if your shipment includes both taxable and exempt products, you should charge sales tax on the entire shipment. So if you ship a coffeemaker, which is taxable, and a month’s supply of coffee, which is not taxable, you should charge sales tax on the entire delivery fee.
According to a representative from the Pennsylvania Department of Revenue, state rules and local jurisdiction rules will always be the same, so there are no instances where local jurisdictions would differ from state rules on the taxability of shipping and delivery charges.
Finally, we asked the representative what ecommerce retailers should know about collecting sales tax in Pennsylvania. Her answert “If sellers are ever in doubt about a sales tax issue, they should call the DOR at 717-787-1064 and ask about it.” She said that they look at issues on a case-by-case basis, and will render a decision based on the facts.