Apply the correct local rate at checkout
Pennsylvania Act 21 of 2026 was enacted on July 12, 2026. It changes the sourcing of Philadelphia’s 2% local sales tax and Allegheny County’s 1% local sales tax from the seller’s location to the delivery destination.
If you are already required to collect Pennsylvania’s 6% state sales tax, you must also collect the applicable local tax on taxable sales delivered to either county:
- Philadelphia: 6% state tax plus 2% local tax, for an 8% combined rate.
- Allegheny County: 6% state tax plus 1% local tax, for a 7% combined rate.
The Pennsylvania Department of Revenue delayed enforcement until October 1, 2026, to give vendors time to update their systems. As of October 21, enforcement has begun.
Act 21 does not change which products or services are taxable. It does not change the state sales tax rate or the existing state and local use tax rules. If sales tax is not collected on a taxable purchase, the purchaser may still owe use tax when using the item or service in the relevant area. Read the Pennsylvania Department of Revenue’s local sales tax guidance for the official details.
Check whether Pennsylvania registration applies to you
For remote sellers, Pennsylvania’s economic nexus threshold is based on annual gross sales into the state. The Department of Revenue says sellers exceeding $100,000 in annual Pennsylvania gross sales generally must register, collect, and remit Pennsylvania sales tax. The threshold is based on sales, not a transaction count.
If your sales are below that threshold, this change does not create a registration obligation based on economic nexus alone. However, physical presence or other circumstances may create a separate obligation. Check your position against the state’s online retailer guidance.
Once registered, review taxable orders by delivery destination. A UK-based Shopify, Amazon, Etsy, or own-website seller may need to collect Philadelphia’s 2% local tax on qualifying Philadelphia deliveries and Allegheny County’s 1% local tax on qualifying deliveries there, even if the seller operates entirely outside Pennsylvania.
Review your 2026 sales history
The retroactive effective date is the key compliance risk. Act 21 applies to tax years after December 31, 2025, while enforcement began October 1, 2026. If you were registered and did not collect the relevant local tax on deliveries made from January 1 through September 30, review those transactions promptly.
Do not change filings or remit additional amounts without checking the correct treatment. Discuss the records and any potential corrections with your accountant first. The answer may depend on what was sold, what tax was collected, your filing position, and the details of the transaction.
Follow this checklist to update your process
- Confirm your Pennsylvania status. Check whether you are registered and whether you have crossed the state’s gross sales threshold or have another basis for nexus.
- Test your checkout settings. Make sure your tax calculation uses the delivery address and applies the Philadelphia 2% or Allegheny County 1% rate to taxable sales where required.
- Review orders from January 1, 2026. Pull sales delivered to Philadelphia and Allegheny County and compare the tax charged with the applicable rules.
- Reconcile marketplace and direct sales. Amazon and other marketplace facilitators generally handle tax collection on their marketplace transactions. Still check the marketplace tax reports against your own records. Your Shopify or WooCommerce orders may need separate settings and review.
- Keep address evidence. Retain complete ship-to addresses and tax calculation records to support your filings. ZIP codes can cross county lines, so do not rely on ZIP code alone when determining the destination. Pennsylvania provides ZIP code resources and USPS address tools to help vendors verify locations.
The logic may feel familiar if you already handle destination-based VAT: the customer’s destination determines the applicable tax. The added challenge is identifying the correct local jurisdiction within one US state.
For UK sellers, an ecommerce accountant UK can help keep cross-border compliance records organized. An amazon seller accountant UK should also reconcile marketplace statements with your own-channel data. Accurate ecommerce bookkeeping UK and Shopify accounting UK records make it easier to check what was collected, where orders were delivered, and what needs to be reported.
Frequently asked questions
Does Pennsylvania’s change mean the tax rates have increased?
No. Philadelphia’s combined rate remains 8%, and Allegheny County’s combined rate is 7%. Act 21 changes where the local tax applies, not the rates.
Do sellers below $100,000 in Pennsylvania sales have to register because of Act 21?
Not on economic nexus alone, according to Pennsylvania’s current guidance. Physical presence or other circumstances may still create a requirement, so check your specific position.
Do marketplace sellers need to check Amazon orders?
Yes. A marketplace facilitator generally handles collection on marketplace sales, but you should reconcile marketplace reports and confirm that your own-store orders use the correct destination-based settings.
If you sell into Pennsylvania and need help organizing your sales records, tax calculations, and ongoing filing process, contact Sterlinx Global.