Pennsylvania — Sales & Use Tax

Pennsylvania imposes a 6% sales and use tax on the purchase price of each separate sale at retail or use of tangible personal property and certain enumerated services within the Commonwealth. The tax applies to both retail sales and the use of tangible personal property. The "sale at retail" definition includes any transfer, for consideration, of the ownership, custody, or possession of tangible personal property, including licenses to use or consume, and specifically includes the rendition for consideration of enumerated taxable services.

Allegheny County and Philadelphia impose additional local sales taxes of 1% and 2%, respectively, on the same state tax base, resulting in combined rates of 7% and 8% in those jurisdictions.

Source: 72 P.S. § 7202(a), as described in PA DOR Sales & Use Tax Bulletin 2021-05

Pennsylvania requires remote sellers without physical presence to register and collect sales tax if their gross sales into the Commonwealth exceed $100,000 in the prior calendar year. The threshold is based solely on sales volume; there is no transaction count requirement. Gross sales include all sales on all channels, including both taxable and nontaxable sales.

Effective July 1, 2019, the Department of Revenue applies economic nexus under the definition of "maintaining a place of business" in Pennsylvania, which includes having any contact sufficient to allow the Commonwealth to require tax collection under the U.S. Constitution. Act 13 of 2019 codified this standard and eliminated the prior notice-and-reporting option for sellers exceeding the threshold.

The measurement period is the prior calendar year. For example, sellers use calendar year 2025 sales to determine their collection obligation for the period April 1, 2026 through March 31, 2027.

Source: PA Sales & Use Tax Bulletin 2019-01 | PA DOR Online Retailers

Any business that sells taxable items or performs taxable services in Pennsylvania must register for a Sales, Use, and Hotel Occupancy Tax license. Registration is completed through the Pennsylvania Online Business Tax Registration system (myPATH). Once registered, vendors must file returns whether or not taxable transactions occur in a period. If multiple physical locations are maintained in Pennsylvania, a separate license is issued for each location.

Source: PA DOR Sales, Use and Hotel Occupancy Tax | PA Retailer's Information Guide REV-717

Pennsylvania assigns each sales and use tax licensee a filing frequency—monthly, quarterly, or semi-annual. The Department of Revenue determines the frequency based on the amount of tax reported by the licensee and may change the frequency in ensuing calendar years.

Returns and payments are due by the 20th day of the month following the close of each reporting period, regardless of assigned frequency. If the 20th falls on a weekend or holiday, the deadline extends to the next business day. Licensees must file returns even when no taxable transactions occur during the period.

Source: PA DOR Sales, Use and Hotel Occupancy Tax | REV-819 (2026 Due Date Calendar)

Pennsylvania imposes sales tax on an enumerated list of services rendered upon tangible personal property, not on all services generally. Taxable services include: (1) repairing, altering, mending, pressing, fitting, dyeing, laundering, dry-cleaning, or cleaning tangible personal property other than clothing or footwear; (2) applying or installing tangible personal property as a repair or replacement part; (3) labor for delivering, installing, or applying tangible personal property sold by the vendor; (4) inspecting, altering, cleaning, lubricating, polishing, repairing, or waxing motor vehicles; and (5) printing or imprinting tangible personal property for persons furnishing the materials.

Additional taxable services effective October 1, 1991, include building maintenance and building cleaning services, pest control and disinfecting services, secretarial and editing services, employment agency services, help supply services, and computer programming services.

Source: 61 Pa. Code § 31.5 | 61 Pa. Code § 9.3

After a sales and use tax audit or other examination, the Pennsylvania Department of Revenue issues a Notice of Assessment identifying the proposed deficiency, the tax periods at issue, the amount of tax, penalty, and interest due, and the taxpayer's appeal rights. The notice triggers strict deadlines for administrative protest.

60-day protest period for sales and use tax. Under 72 P.S. § 9703.1, as amended by Act 123 of 2024 (effective January 27, 2025), a taxpayer must file a petition for reassessment with the Department of Revenue's Board of Appeals within 60 days after the mailing date of the Notice of Assessment for sales and use tax matters. The amendment extended the appeal period to 90 days for personal income tax assessments only; the 60-day rule continues to apply to sales, use, employer withholding, and other non-personal-income taxes. A 2017 legislative change had reduced the period from the prior 90-day standard; the recent restoration applies only to personal income tax. The appeal period is jurisdictional—the Board of Appeals lacks statutory authority to extend it after expiration, and missing the deadline forecloses administrative review.

Timely filing rule. The petition is deemed timely if received by the Board or postmarked by the U.S. Postal Service on or before the 60th day. As of January 27, 2025, the postmark rule was expanded: a date recorded or marked by an IRS-designated private delivery service (under IRC § 7502(f)(2)) also qualifies as a valid postmark for Pennsylvania tax filings. Taxpayers filing electronically through the Board's Online Petition Center have until 11:59 p.m. Eastern Time on the final day to submit the petition; the electronic submission timestamp governs the filing date.

Petition content requirements. The petition for reassessment must set forth the tax type and period, the amount in dispute, a statement of facts, the basis upon which the taxpayer claims the assessment is erroneous (citing applicable statutory exemptions, calculation errors, jurisdictional defects, or constitutional challenges), an affidavit that the petition is not filed for delay and that the facts are true, and whether the taxpayer will submit a compromise offer within 30 days. A power of attorney (form REV-677) is required if a representative will correspond with the Board on the taxpayer's behalf. The petition is filed with the Board of Appeals either electronically or by mail to P.O. Box 281021, Harrisburg, PA 17128-1021.

Payment pending appeal. Filing a protest does not stay collection. Interest continues to accrue at the statutory rate (set semiannually by the Board of Finance & Revenue under 72 P.S. § 806) from the original due date of the tax through the date of payment. The Department may proceed with liens and other collection remedies even while the appeal is pending, unless the taxpayer posts a bond or other security acceptable to the Department (required for jeopardy assessments, discretionary in other cases). If the assessment is ultimately reduced or reversed, any overpayment plus interest is refunded or credited.

Special case: jeopardy assessments. When the Department issues a Notice of Jeopardy Assessment (authorized when collection is deemed in jeopardy), the taxpayer must file a petition for reassessment within 10 days of notice and must post a bond or deposit cash or certified check in an amount the Department deems necessary to secure the liability. If acceptable security is not posted within 10 days, the Board will still accept a timely petition, but the Department retains the right to file liens and pursue immediate collection during the pendency of the appeal.

Source: 72 P.S. § 9703.1 (Board of Appeals); 61 Pa. Code § 7.13 (Petition requirements and filing); Act 123 of 2024, S.B. 1051 (Appeals process amendments, effective January 27, 2025); 61 Pa. Code § 7.10 (Jeopardy assessment procedures)

Pennsylvania provides a two-tier administrative review system for sales and use tax disputes before judicial review becomes available. Both levels are mandatory exhaustion steps; a taxpayer cannot bypass them and proceed directly to court.

First level: Board of Appeals. The Board of Appeals (BOA), established under 72 P.S. § 9703, is a unit within the Department of Revenue charged with reviewing initial Department actions—assessments, refund denials, and certain administrative determinations. Taxpayers file a petition for reassessment (if contesting an assessment) or a petition for refund (if seeking a refund of tax paid) with the Board within the statutory deadline (60 days for assessments in most tax types, 3 years for refund petitions). The Board conducts administrative hearings before a Board member or designated hearing officer; hearings are stenographically recorded, and a full record is maintained. The Board issues a written order with findings of fact and conclusions of law. There is no fee to file a petition with the Board of Appeals. Proceedings are governed by 61 Pa. Code Chapter 7 and the Pennsylvania Administrative Agency Law (2 Pa.C.S. §§ 501–508, 701–704).

Compromise at the Board of Appeals. A petitioner may request settlement by submitting a Request for Compromise (form DBA-10) with the petition or as soon as practicable. Compromise negotiations are voluntary; both the Department and the taxpayer must agree. The Board facilitates settlement but does not impose settlements. If a compromise is reached and approved by the Board, the order is final and not appealable.

Second level: Board of Finance & Revenue. If the taxpayer disagrees with the Board of Appeals decision, an appeal may be filed with the Board of Finance & Revenue (BF&R) within 60 days after the mailing date of the Board of Appeals order for sales and use tax matters (90 days for personal income tax matters, as of January 27, 2025, under Act 123 of 2024). The BF&R, governed by the Pennsylvania Treasury Department and codified at 72 P.S. § 9704, is an independent three-member administrative tax tribunal—two members appointed by the Governor and confirmed by the Senate, and one member appointed by the State Treasurer. The BF&R constitutes the second and final level of administrative appeal before judicial review. The BF&R may defer its decision while parties participate in an optional settlement conference process (enacted by Act 123 of 2024). Either party or the BF&R itself may request a settlement conference within 30 days of filing the petition for review; the BF&R may permit late requests for good cause. Settlement conferences are conducted by independent officers (attorneys or CPAs with substantial Pennsylvania tax law knowledge) appointed by the BF&R; they are confidential, and statements or admissions made during settlement cannot be introduced as evidence in subsequent proceedings unless the parties agree. The initial settlement conference must occur within 60 days of BF&R deferral. If settlement is reached, it is presented to the BF&R for approval; approved settlements are not precedential and are not appealable. If no settlement is reached or either party declines to participate, the BF&R proceeds to decision on the merits.

BF&R decision deadline. The BF&R must issue a decision within six months after receipt of the petition unless the deadline is extended by written order for compromise negotiations, pending related litigation, or other good cause shown. Failure to issue a decision within six months results in a deemed denial, starting the appellate period for Commonwealth Court review.

Third level: Commonwealth Court. A party dissatisfied with the BF&R's decision may file a petition for review with the Pennsylvania Commonwealth Court under 210 Pa. Code Rule 1571. The petition must be filed within 30 days after entry of the BF&R order. Commonwealth Court review is on the record developed before the BF&R; it is not a de novo proceeding. The Commonwealth Court applies an appellate standard of review, examining whether the BF&R's findings are supported by substantial evidence and whether the BF&R committed an error of law. From the Commonwealth Court, further appeal to the Pennsylvania Supreme Court is discretionary and requires allowance of appeal.

Filing and representation. Taxpayers may appear pro se or be represented by an attorney, accountant, or other person with the requisite technical knowledge at both the BOA and BF&R levels. Representation by an attorney is recommended but not required. At the Commonwealth Court level, representation by an attorney licensed in Pennsylvania is required under the Pennsylvania Rules of Appellate Procedure.

Source: 72 P.S. § 9703 (Board of Appeals); 72 P.S. § 9704 (Board of Finance & Revenue); 61 Pa. Code Chapter 7 (Board of Appeals procedure); 61 Pa. Code Chapter 703 (Board of Finance & Revenue procedure); 210 Pa. Code Rule 1571 (Commonwealth Court review of BF&R determinations)

Pennsylvania imposes time limits on both the Department of Revenue's authority to assess additional sales and use tax and the taxpayer's right to claim a refund. These periods are governed by the Tax Reform Code of 1971 (72 P.S. §§ 7407.3, 10003.1) and implementing regulations at 61 Pa. Code Chapter 119.

## Statute of limitations on assessments

General three-year rule. The Department must assess sales and use tax within three years after the return was filed, or within three years after the last day prescribed for filing the return, whichever is later. Under 61 Pa. Code § 119.14(b), a return filed before the statutory due date is deemed filed on the last day prescribed for filing. For example, a monthly sales tax return due on the 20th of the following month that is filed early is treated as filed on the 20th, and the three-year period begins on that date. The limitations period applies to the Department's issuance of a Notice of Assessment; once the assessment is issued within the period, the Department may collect the assessed amount indefinitely (Pennsylvania has no statute of limitations on collection of assessed tax).

Extension by agreement. The three-year assessment period may be extended by written agreement executed by both the taxpayer and the Department before the period expires. Subsequent extensions are permitted if executed before the extended period lapses. Taxpayers filing amended returns are typically required to consent in writing to a one-year extension of the assessment period as a condition of Department review of the amended return.

25% understatement exception. If the taxpayer omits from gross receipts or taxable sales an amount properly includable that exceeds 25% of the gross receipts or taxable sales stated on the return, the Department may assess tax at any time within six years after the return was filed. This extended period applies when there is a substantial understatement; it does not apply to mere calculation errors or erroneous classifications that do not result in a 25%-or-greater omission from the base.

Failure to file or fraud. If no return is filed, or if a false or fraudulent return is filed with intent to evade tax, the Department may assess tax at any time—there is no statute of limitations. The burden of proving fraud rests with the Department and requires clear and convincing evidence of willful intent to evade tax.

Jeopardy and protective assessments. The Department may issue a jeopardy assessment when it believes collection of the tax is in jeopardy. Jeopardy assessments are not subject to the normal three-year period and may be issued at any time the conditions for jeopardy are present. The taxpayer may contest the assessment by filing a petition within 10 days and posting security.

## Statute of limitations on refund claims

General three-year rule for refunds. A petition for refund of sales or use tax must generally be filed within three years of the date of payment of the tax. This is an absolute bar: refund petitions filed after the three-year period are dismissed for lack of jurisdiction, and neither the Board of Appeals nor the Board of Finance & Revenue has authority to waive the period. The three-year clock runs from the actual payment date, not from the filing of the return or the original due date of the tax.

Six-year period for assessment-related refunds. If the taxpayer paid tax pursuant to an assessment, determination, settlement, or appraisement issued by the Department, a petition for refund of that payment must be filed within six years of the date of payment. The extended six-year period applies only to amounts paid to satisfy a formal assessment; it does not apply to voluntary payments or payments made with an original or amended return. The policy rationale is that assessed amounts are subject to a longer administrative and judicial review cycle.

Amended returns and refund petitions distinguished. Filing an amended return showing an overpayment does not constitute a petition for refund and does not toll or extend the three-year limitations period for filing a formal refund petition. The Department may, in its discretion, review an amended return and issue a refund, but the taxpayer's formal right to petition for a refund is governed solely by the statutory three-year (or six-year for assessments) filing deadline measured from the date of payment. If the Department denies an amended return refund request or fails to act, the taxpayer must file a petition for refund with the Board of Appeals within the applicable period.

Protective refund claims. When the limitations period is about to expire but the amount of the refund or the legal basis for it is uncertain (for example, pending litigation in another jurisdiction on the same issue), taxpayers often file a protective petition for refund to preserve the claim. The petition need not quantify the refund with exactitude, but it must identify the tax type, period, payment date, and general legal or factual basis for the claim.

Federal changes and IRC conformity. If the taxpayer's federal taxable income or apportionment is adjusted by the IRS or federal courts and that adjustment affects Pennsylvania sales or use tax liability (uncommon but possible in apportionment or nexus contexts), the taxpayer must report the change to the Department. The statute governing the Pennsylvania period for assessment or refund following a federal change varies by tax type and is governed by the specific statutory provisions applicable to each tax under Title 72. For sales and use tax, no special federal-change statute extends the normal three-year refund period unless the federal change itself occurred within three years of payment.

Source: 72 P.S. § 7407.3 (Limitations on assessments); 72 P.S. § 10003.1 (Limitations on refund petitions); 61 Pa. Code § 119.14 (Limitations on assessment and collection); 61 Pa. Code § 119.13 (Restrictions on refunds)

Pennsylvania offers two advance-resolution mechanisms for taxpayers: a Voluntary Disclosure Program (VDP) for taxpayers coming forward to report previously unfiled or underreported liabilities, and a private letter ruling process for obtaining guidance on prospective transactions or recurring fact patterns.

## Voluntary Disclosure Program

Purpose and eligibility. The Voluntary Disclosure Program, administered by the Department of Revenue's Voluntary Disclosure Office, allows businesses and individuals who have recently become aware of their Pennsylvania sales and use tax obligations to voluntarily come forward, file returns, and pay tax and interest for a limited lookback period in exchange for penalty waiver. The program is codified in Department policy and detailed on the Department's website.

Who qualifies. To be eligible, the taxpayer must:

• Not currently be registered with the Department for the tax type being disclosed, or be registered but in a non-filed or delinquent status only if the Department has not yet contacted the taxpayer about the delinquency;
• Not have been previously contacted by the Department regarding the specific tax liability (audit notice, assessment, demand letter, or other formal inquiry);
• Recently have become aware of the obligation (self-discovery, nexus study, or advisor recommendation);
• Be willing to register, file all required returns for the disclosure period, and pay all tax and interest due (but not penalties, which are waived upon completion); and
• Agree not to contest or petition for refund of any tax reported under the voluntary disclosure agreement.

Taxpayers already registered and filing for the tax type are generally ineligible. Taxpayers who collected sales tax from customers but failed to remit it face enhanced scrutiny; collected-but-not-remitted tax is a trust-fund liability and may not qualify for the standard lookback limitation (discussed below).

Lookback period: three years plus current year. The standard lookback under the VDP is three years plus the current year. For example, an applicant accepted into the program in 2026 would file returns and pay tax for the period January 1, 2023, through the date of registration (2026), plus any prior portion of 2026. Liabilities for years before the three-year lookback are forgiven. This is a significant benefit compared to the Department's statutory three-year assessment authority, which runs from the return due date and would theoretically allow the Department to assess any unfiled period within three years of when a return should have been filed.

Exception: collected sales tax. If the taxpayer collected sales or use tax from customers but failed to remit it, the VDP lookback limitation does not apply. The taxpayer must account for and remit all collected tax from the date it was first collected, regardless of how long ago. This exception treats collected tax as a trust-fund liability held for the Commonwealth; the penalty waiver still applies, but the temporal limitation does not.

Anonymous filing. Applicants may initiate the VDP process anonymously through a representative. The taxpayer submits an initial application (available on the Department's VDP webpage) without disclosing its identity; the Voluntary Disclosure Office assigns a case number. The applicant then submits a letter of intent and a completed Business Activities Questionnaire (form DEO-50) under the case number, describing the nature of the business, the tax types involved, the periods of liability, the reason for non-filing, and a verification that the Department has not previously contacted the applicant. Anonymity is preserved through this eligibility determination phase. The taxpayer must disclose its identity only when the Voluntary Disclosure Committee approves the application and a formal Voluntary Disclosure Agreement is drafted for signature.

Agreement execution and compliance. If approved, the applicant receives a proposed Voluntary Disclosure Agreement from the Voluntary Disclosure Office. The agreement is non-negotiable: any modification or alteration by the taxpayer renders it void. The taxpayer must sign and return both copies of the agreement within 45 days, along with a power of attorney (form REV-677) if using a representative. Once executed by the Department (and, for certain tax types, by the Auditor General), the Department returns one signed copy to the taxpayer with instructions for filing returns and remitting payment. The Voluntary Disclosure Office handles account setup and registration; the taxpayer must not register independently outside the program, as doing so will void the agreement.

Penalty waiver; interest not waived. Taxpayers who complete all VDP requirements—filing all returns for the disclosure period and paying all tax and interest in full—receive a waiver of all penalties for the disclosed periods. Interest is not waived and accrues at the statutory rate from the original due date of each return through the date of payment. The Department reserves the right to audit the disclosed periods; the VDP does not foreclose audit, but it does provide certainty on the lookback period and penalty treatment if the taxpayer has made full and accurate disclosure.

Failure to comply voids the agreement. If the taxpayer misrepresents facts, fails to file the required returns, fails to pay the tax and interest due, or otherwise breaches the agreement, the entire VDP is voided. The Department may then assess tax, interest, and penalties for all periods (including those outside the three-year lookback that would have been forgiven), and the taxpayer loses the benefit of the penalty waiver. The program is strict and unforgiving of non-compliance.

Closing agreements. Act 123 of 2024 (effective January 27, 2025) provides explicit statutory authority for the Department to enter into closing agreements with taxpayers to resolve liabilities for any tax administered by the Department. A closing agreement is a binding written contract that is final and conclusive except in cases of fraud, malfeasance, or misrepresentation of material fact. Closing agreements may address prospective issues (for example, the tax treatment of a new product line or a recurring transaction type) or historical liabilities. They are distinct from VDAs and compromise settlements. The Department's procedures for requesting and negotiating closing agreements are expected to be published in updated guidance.

## Private letter rulings

Purpose. Pennsylvania taxpayers may request a private letter ruling from the Department of Revenue on the application of sales and use tax law to a specific set of facts. Rulings are advisory opinions issued by the Department's Office of Chief Counsel in response to written requests. They provide binding protection to the requesting taxpayer if the taxpayer fully and accurately discloses all material facts and relies on the ruling in good faith.

How to request a ruling. Unable to confirm as of 2026-05-28. The Department of Revenue website and publicly available guidance do not specify a formal procedure, required form, filing fee, or response timeline for private letter ruling requests for sales and use tax as of May 2026. Practitioners typically submit a detailed written request to the Office of Chief Counsel describing the transaction, the legal question, the taxpayer's position, and any relevant statutory or regulatory citations. Requests should be submitted well in advance of the transaction or filing deadline to allow adequate Department review time.

Binding effect and confidentiality. A letter ruling binds the Department as to the requesting taxpayer for the facts presented, but it is not precedent for other taxpayers and is not published. Rulings may be revoked or modified prospectively if the law changes or if the Department determines the ruling was issued in error. The Department may, in its discretion, publish redacted versions of certain rulings of broad applicability as Revenue Rulings, which have precedential weight.

Source: Pennsylvania Voluntary Disclosure Program (Department of Revenue policy and application portal); Act 123 of 2024, S.B. 1051 (Closing agreements, effective January 27, 2025)