New Local Sales Tax Requirements Affect Deliveries to Philadelphia and Allegheny County

Pennsylvania businesses that deliver taxable products or services to customers in Philadelphia or Allegheny County will soon face additional local sales-tax collection requirements.

Under Pennsylvania Act 21 of 2026, local sales tax is now determined by the location where the customer receives the taxable product or service—not simply where the seller is located. Businesses already required to collect Pennsylvania’s 6% sales tax must also collect the applicable local tax on taxable sales delivered into either jurisdiction:

• Philadelphia: 2% local tax, bringing the total rate to 8%.
• Allegheny County: 1% local tax, bringing the total rate to 7%.

For example, a business located outside Allegheny County that delivers taxable merchandise to a customer in the county must generally collect the combined 7% rate. A taxable product delivered to a Philadelphia address is generally subject to the combined 8% rate.

The destination-based rule also applies in reverse. A seller located in Philadelphia or Allegheny County generally would not collect the local tax when delivering a taxable product to a customer elsewhere in Pennsylvania.

Act 21 does not change which products and services are taxable. Products that are currently exempt from Pennsylvania sales tax remain exempt. For petroleum marketers and convenience-store operators, the change will primarily affect taxable merchandise and other taxable products or services delivered to customers in Philadelphia or Allegheny County. It does not make otherwise exempt fuel sales taxable.

The law was enacted July 12, 2026, with an effective date applying to tax years beginning after December 31, 2025. However, the Pennsylvania Department of Revenue has announced that it will not begin enforcing the new destination-based requirements until October 1, 2026, allowing businesses time to update their systems.

For petroleum marketers and convenience-store operators, the change is most relevant to taxable merchandise and other taxable products or services delivered to customers in Philadelphia or Allegheny County. It does not, by itself, make an otherwise exempt fuel or product taxable. Businesses should nevertheless review transactions involving deliveries into these jurisdictions and consult their tax advisers when the proper destination or taxability is unclear.

Additional information is available through the Pennsylvania Department of Revenue.