Use Tax for Individuals
When sales tax is not charged by the seller on a taxable item or service, the consumer is required by law to report and remit use tax to the Department of Revenue. Purchases made over the Internet, through toll-free numbers, from mail-order catalogs and from out-of-state locations are examples of purchases subject to use tax when sales tax is not paid. The tax rate is the same as the sales tax, 6 percent state, plus 1 percent local tax for items purchased in, delivered to or used in Allegheny County or 2 percent local tax in Philadelphia.
Easy and Convenient Filing Options
In an effort to raise awareness about use tax obligations and encourage voluntary compliance with use tax law, beginning with tax year 2011, the department simplified the use tax reporting and payment process by adding a use tax line to the PA-40 Pennsylvania Personal Income Tax Return. Taxpayers may now easily report and pay use tax annually using padirectfile, Fed/State e-File or the paper PA-40. View details on how to calculate, report and pay use tax in conjunction with the PA personal income tax filing.
Taxpayers unsure of whether an item or service purchased tax-free is subject to use tax are encouraged to review the list of examples below and the searchable Retailer’s Information Guide (REV-717) for an extensive list of taxable items and services.
Additional information is also available in the Use Tax for Individuals Brochure (REV-1748).
Examples of When Use Tax is Due
When you purchase taxable property or services over the Internet, from catalogs or by phone without paying Pennsylvania sales tax, and when the seller has the property or services delivered into Pennsylvania, you are required to pay use tax.
Example: You buy a book from a website that does not collect Pennsylvania sales tax. The book is delivered by the website through a freight company to you in Pennsylvania. You owe Pennsylvania use tax on the entire purchase price of the book, including any shipping and handling fees charged by the seller. If you live in Allegheny County or Philadelphia, you also owe an additional 1 or 2 percent local use tax.
Example: You buy jewelry as gift for a friend from a website that does that not collect Pennsylvania sales tax. The jewelry is delivered by the website through a freight company to your friend in Pennsylvania. You owe Pennsylvania use tax on the entire purchase price of the jewelry, including any charge for shipping and handling charged by the seller. If your friend lives in Allegheny or Philadelphia County, you also owe an additional 1 or 2 percent local use tax.
When you purchase taxable property from a seller who is located outside of Pennsylvania and the property is delivered into or used in Pennsylvania, you are required to pay use tax.
Example: You buy a desk in Delaware and you bring it into Pennsylvania to use in your home. You owe use tax on the desk.
Example: While on vacation in New Hampshire, you purchase a set of skis that are delivered to your home in Pennsylvania. You owe Pennsylvania use tax, and if the skis are delivered to or used in Allegheny or Philadelphia County, local use tax on the total purchase price of the skis, including any charge for shipping and handling.
When you take or send property out of Pennsylvania to have a taxable service performed on that property, and then bring or have the property shipped back into Pennsylvania, you are required to pay use tax on the service.
Example: You take your watch to Delaware to be repaired. After it has been fixed, you bring it back to Pennsylvania. You owe use tax on the repair service.