Overview
The 2026–2027 Pennsylvania budget, enacted as Act 21 of 2026 (S.B. 146), changes the local sales tax sourcing rules for Allegheny County and Philadelphia.
What Changed
Allegheny County imposes a 1% local sales tax, and Philadelphia imposes a 2% local sales tax. Before Act 21, these local taxes were generally sourced based on the point of sale, that is, where the sale occurred.
Act 21 changes the sourcing method from the point of sale to the point of destination, that is, where the product or service is delivered.
Effect on Sellers
- Taxable sales delivered to customers in Allegheny County or Philadelphia may be subject to the applicable local sales tax, regardless of where the seller is located.
- Sellers located in Allegheny County or Philadelphia generally should not collect the local add-on tax on taxable sales delivered to customers outside those jurisdictions.
Effective Date and Enforcement
The change applies retroactively to tax years ending after December 31, 2025. However, the Pennsylvania Department of Revenue has indicated that it will not enforce the change until October 1, 2026.
Questions
For additional information, or if you have any questions, please see the Pennsylvania Department of Revenue link below or contact our office.
Local Sales Tax | Department of Revenue | Commonwealth of Pennsylvania