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of the Commonwealth of Pennsylvania

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    Sales, Use and Hotel Occupancy Tax

    Use Tax

    Out-of-state businesses and Internet vendors often falsely advertise that they sell taxable items “tax free”. However, Pennsylvania law requires the payment of use tax by any person who purchases taxable goods or services delivered into or used in Pennsylvania if sales tax is not collected by the vendor. Use tax is the counterpart of the state and local sales taxes.

    Commonly Asked Questions

    When Pennsylvania sales tax is not charged by the seller on a taxable item or service delivered into or used in Pennsylvania, the consumer is required by law to report and remit use tax to the Department of Revenue. The use tax rate is the same as the sales tax rate: 6 percent state tax, plus an additional 1 percent local tax for items purchased in delivered to or used in Allegheny County and 2 percent local tax for Philadelphia.

    Why It’s Important

    • It’s a matter of fairness. Pennsylvania businesses – those who employ our residents, pay state and local taxes and support our communities – are put at a 6 percent competitive disadvantage against out-of-state businesses when sales or use tax is not paid on taxable items and services.
    • As Internet and mail-order shopping becomes more popular among Pennsylvania residents, individual consumers’ use tax compliance helps level the playing field among e-commerce retailers and Pennsylvania’s brick-and-mortar stores.
    • Use tax is an important source of revenue for the Pennsylvania General Fund. Every dollar collected is a dollar available for government and public services.
    • From an enforcement standpoint, when the Department of Revenue receives information on purchases where use tax is owed but was not paid, it will assess the purchaser for not only the tax, but also penalty and interest for late payment.

    For additional information on use tax and reporting and payment options, visit Use Tax for Individuals or Use Tax for Businesses.

    For examples of when use tax is owed by trusts or fiduciaries, visit the Online Customer Service Center.