Pennsylvania Sales Tax Guide for SaaS and E‑Commerce Businesses

2025‑07‑28

Pennsylvania imposes a 6% state sales tax plus local taxes in Allegheny County (1%) and Philadelphia (2%), reaching a maximum combined rate of 8%. Here's what SaaS and e-commerce businesses need to know about Pennsylvania sales tax obligations, registration requirements, and compliance.

Quick Reference

Item	Details
State Tax Rate	6%
Local Tax Range	0% - 2% (Allegheny County 1%, Philadelphia 2%)
Combined Rate Range	6% - 8%
Economic Nexus	$100,000 in prior calendar year
Physical Nexus	Any presence in Pennsylvania
SaaS Taxable	Yes (as canned software)
Registration Portal	Pennsylvania myPATH Portal

Nexus: When Pennsylvania Rules Apply

Economic Nexus

Starting July 1, 2019, remote sellers and marketplace facilitators must register for Pennsylvania sales tax when their gross sales into Pennsylvania exceed $100,000 in the prior calendar year. This includes taxable, exempt, and marketplace transactions. Registration is required by April 1 of the following year if the threshold is exceeded.

Physical Nexus

You establish physical nexus if you have any presence in Pennsylvania: inventory stored in a PA fulfillment center, offices, employees, or agents operating in the state.

Registration and Compliance

Sales Tax License

Register for a Sales, Use & Hotel Occupancy Tax License through the Pennsylvania DOR's myPATH portal. You'll need your business entity information, FEIN, and estimated sales.

Filing Frequency & Tax Rates

Pennsylvania charges 6% state tax plus local taxes in Allegheny County (1%) and Philadelphia (2%) (maximum 8% total).

File monthly if your tax liability is high
Otherwise you may file quarterly or annually

Returns are due by the 20th day of the month following the reporting period.

Taxability of Goods and Services

Tangible Personal Property

Physical goods shipped into Pennsylvania are taxable unless exempt items like groceries, clothing, or pharmaceuticals apply.

Digital Goods and SaaS

Digital goods delivered electronically—such as ebooks, music, videos, software codes—are taxable as specified digital products under Pennsylvania's tax law (Act 84 of 2016).

Pennsylvania considers SaaS and other canned computer software services as tangible personal property and thus taxable under the Tax Reform Code as amended by Act 84 of 2016. Software delivered electronically, streamed, or accessed via subscription is taxable, regardless of medium or support services included.

Custom software written for a single customer is exempt as a non-taxable service. Maintenance, support, setup, configuration, and training bundled with SaaS or canned software are generally taxable unless separately stated and performed after October 30, 2017.

E‑Commerce Businesses: Tangible vs. Digital Products

Tangible Goods

Physical goods shipped to Pennsylvania customers are taxable if nexus exists. You must collect the appropriate 6% state tax plus possible local surtax. Marketplace sales count toward nexus even if the facilitator collects tax.

Digital Downloads

Digital products like ebooks, software downloads, media, or codes are taxable, regardless of delivery method.

Marketplace Facilitators

Marketplace platforms with nexus and thresholds must collect and remit Pennsylvania tax on third-party sales. Certified facilitators may handle tax collection for sellers, but sellers must still register if they make taxable sales outside the facilitator.

If tax is handled entirely by a certified marketplace facilitator, sellers may need to file zero returns periodically.

Exemptions & Special Cases

Nonprofit organizations and government purchasers may be exempt; keep valid exemption certificates on file
Resale certificates apply when reselling taxable goods or services; maintain proper documentation
Custom software is exempt when designed for a specific original purchaser and not prewritten
Training services are non-taxable if separately stated, but bundled instructional fees are taxable

Glossary of Key Terms

Term	Definition
Economic Nexus	$100,000+ gross Pennsylvania sales in prior calendar year
Physical Nexus	Presence in PA via inventory, agents, employees, etc.
Specified Digital Products	Electronically delivered digital goods taxed under Act 84
Canned Software	Prewritten software or SaaS treated as taxable tangible property
Custom Software	Software developed for a single purchaser—exempt from tax
Marketplace Facilitator	Platform responsible for collecting and remitting PA sales tax
Zero-Return Filing	Filing with no net tax due when certified facilitator is doing collection