08/20/2026
🚨 **PENNSYLVANIA BUSINESS FYI: NEW LOCAL SALES TAX RULES**
PA business owners — this is an update worth paying attention to, especially if you sell taxable products or services to customers in **Philadelphia or Allegheny County.**
The Pennsylvania Department of Revenue recently sent notice regarding **Act 21 of 2026**, which changes how certain local sales taxes are collected.
📌 **What changed?**
Previously, local sales tax was generally determined by the **point of sale** — where the business/vendor was located.
Under the new law, local sales tax is based on the **point of destination** — where the taxable product or service is delivered or provided.
This means vendors who are already required to collect Pennsylvania’s **6% state sales tax** may also be required to collect:
➡️ **Philadelphia:** Additional **2% local sales tax**
➡️ **Allegheny County:** Additional **1% local sales tax**
So, for example, your business does **not necessarily have to be located in Philadelphia or Allegheny County** for this to affect you. If you make taxable sales to customers in those areas, you may have additional local sales-tax collection responsibilities.
đź“… The law was enacted **July 12, 2026**, with applicability to tax years after **December 31, 2025**.
The PA Department of Revenue has also stated that it understands businesses need time to make adjustments and **will not begin enforcing the new requirements until October 1, 2026.**
⚠️ **Business owners should start reviewing:**
• Where your customers are located
• How your invoicing/checkout system calculates PA sales tax
• Whether your accounting or payment processor can calculate tax based on the customer's destination
• Whether sales into Philadelphia or Allegheny County are being taxed correctly
This is especially important for businesses that sell online, invoice customers remotely, ship products, or provide taxable services throughout Pennsylvania.
**Don’t wait until tax filing time to find out your system was collecting the wrong amount.**
📣 Sharing this as a **Business FYI** so other Pennsylvania business owners can prepare before enforcement begins.
*This post is for general educational purposes and is not individualized tax or legal advice. Business owners should contact the PA Department of Revenue or their tax professional regarding their specific situation.*