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Third Party Facilitated Sales and Deliveries

Many third-party delivery businesses offer online platforms or applications that allow customers to order food, drinks, groceries, and other items from select retail stores and restaurants, either with simple delivery or with personal shoppers. Pennsylvania law requires third-party delivery businesses that contract with restaurants or other businesses to collect sales tax on the entire purchase price of customers’ orders. That includes the cost of food or other taxable items purchased, as well as delivery and service fees.

A third-party delivery business that offers these services must obtain a sales tax license to begin collecting and remitting the appropriate sales tax. The business must complete the Online Business Entity Registration (PA-100), available at, to obtain a license. Additional information that lists which items are subject to Pennsylvania sales tax is available in the Department of Revenue’s Retailers’ Information Guide.

As a reminder, restaurants or stores that deliver their own food or products to customers or hire independent contractors to deliver these items, must collect sales tax on both the cost of the taxable items and food as well as any related delivery and service fee.

Below are examples of how Pennsylvania sales tax applies to third-party delivery businesses.

Example 1

A restaurant contracts with a delivery business to list its menu on the delivery business’ website. A customer places an order for delivery of prepared food from that restaurant, to be delivered by the delivery business. The customer pays the delivery business for the cost of the food, as well as both a delivery and service fee. The delivery business must collect and remit sales tax on that total charge to the customer.

Example transaction

Hamburger/French Fries$10.50
Service fee$1.00
Delivery fee$3.00
Total with tax$15.37

Sales tax is not imposed on any fee or commission the delivery business charges directly to the restaurant for facilitating the sale. The restaurant does not collect sales tax from the delivery business on the cost of the food. Instead, the restaurant treats it as a sales tax-exempt sale for resale. As evidence of the resale, the delivery business should provide a blanket exemption certificate (REV-1220) to the restaurant, or include it in its contract with the restaurant that it will collect the sales tax directly from the customer.

This example also applies to retailers such as grocery stores, department stores, or drug stores that contract with a personal shopper/delivery business to list its available products on the delivery business’ website.

Example 2

When there is no contract between a restaurant and the delivery business, but the delivery business provides the same services to its customers, it also must collect the sales tax on the entire charge to the customer. In this situation, however, the delivery business would pay the sales tax to the restaurant on the cost of the food. Thereafter, the delivery business would take a taxes paid/purchases resold credit against the sales tax it remits to the Department of Revenue, in the amount of sales tax paid to the restaurant.

This example would also apply to delivery businesses advertising products from grocery stores, department stores, drug stores or other businesses. The delivery business must collect sales tax on the cost of the taxable items and any applicable fees charged to the customer.