PA Sales Tax Exemption List: Groceries, Clothing, and Medicine

Pennsylvania’s sales tax exemption list covers most everyday clothing, groceries, prescription and over-the-counter medicines, personal hygiene products, and residential utilities, all of which are excluded from the state’s 6% sales and use tax. Two jurisdictions add a local surcharge on top of the state rate: Allegheny County adds 1% for a total of 7%, and Philadelphia adds 2% for a total of 8%. When an item is exempt from the 6% state tax, it is also exempt from those local surcharges.¹

Clothing and Footwear

Everyday clothing and footwear is exempt. Shirts, pants, coats, shoes, and underwear are not taxed. The exemption is broad but has real edges.

Formal wear such as tuxedos and prom dresses is taxable, because the state treats these as occasional-use items rather than everyday necessities. Fur articles are taxable when the fur is worth more than three times the next most valuable material in the garment. Clothing worn primarily for sports is taxed too: swimsuits, baseball uniforms, bowling shoes, and golf gloves all fall on the taxable side. Jewelry, accessories, and ornamental wear are always taxable regardless of price.²

Groceries and Prepared Food

Food bought for home consumption is generally exempt. Raw ingredients, staples, and most packaged supermarket items are not taxed. Prepared food sold by restaurants and caterers is taxable whether you eat in or take it out.

A few items stay exempt even inside a restaurant transaction: candy, gum, bottled unflavored water, and gift cards. Tips shown separately on a receipt are also excluded from the taxable amount.³

Medicine

Both prescription and non-prescription medicines are exempt. That covers over-the-counter pain relievers, cold medicine, bandages, and prosthetic devices.⁴

Personal Hygiene and Household Paper

Pennsylvania excludes a set of hygiene items that many other states still tax. Disposable diapers, pre-moistened wipes, incontinence products, sanitary napkins, tampons, and similar feminine hygiene products are exempt. So are toothpaste, toothbrushes, dental floss, and toilet paper. These exemptions sit under Section 204 of the Tax Reform Code of 1971, the same statute that covers clothing and food.⁵

Residential Utilities

Electricity, natural gas, fuel oil, and steam bought for residential use are exempt. Basic local telephone service also qualifies. The exemption requires that the utility be purchased directly by the user solely for residential purposes. A business buying the same utility does not get the exemption unless a separate rule applies.⁵

What People Assume Is Exempt but Isn’t

Digital Products

Digital products are not exempt. Since Act 84 of 2016, Pennsylvania applies the full 6% (plus any local tax) to products delivered electronically. E-books, streaming video subscriptions like Netflix or Hulu, downloaded music and audiobooks, apps, games, and canned software are all taxable. It does not matter whether you download or stream. If the product reaches you through any method other than a physical disc or USB drive, it is a taxable digital product.⁶

Enumerated Taxable Services

Most services are not taxed in Pennsylvania. Legal advice, accounting, and medical care are outside the sales tax. The state only taxes services that appear on a specific list, which is short compared to many other states. The taxable services include lobbying, credit reporting, secretarial and employment agency services, help supply services, lawn care, self-storage, and building maintenance and janitorial work. If a service is not specifically listed as taxable, it is exempt.¹

Exemptions Based on Who Is Buying

Government and Nonprofit Purchases

The federal government and the Commonwealth of Pennsylvania, along with its political subdivisions, municipal authorities, and public schools, pay no sales tax on their purchases.

Charitable organizations, volunteer fire companies, volunteer firefighters’ relief associations, nonprofit educational institutions, and religious organizations qualify for exemption on tangible personal property and services bought for their mission.⁵ These organizations must apply for and receive an exemption number from the Department of Revenue. That number begins with “75” and is eight digits long. To make a tax-free purchase, the organization gives that number to the seller on a completed exemption certificate.⁷

One trap: if an employee of a nonprofit pays personally and later seeks reimbursement, the purchase is not exempt. The bill must go directly to and be paid directly by the exempt organization.³

Resale

Businesses that buy inventory for resale do not owe sales tax on the purchase. The tax is collected once, at the final sale to the end consumer. The exemption applies whether the item is resold in its original form or incorporated as an ingredient or component into another product. To claim it, you give the seller a completed exemption certificate along with your eight-digit sales tax license or wholesaler certificate number.⁸

Manufacturing and Processing

Equipment, machinery, parts, and supplies used directly and predominantly in manufacturing, processing, farming, dairying, mining, timbering, or shipbuilding are exempt.

“Directly and predominantly” is where disputes happen. Direct use means the equipment has an active role in actually producing the product, not just supporting the business. Predominantly means more than 50% of the equipment’s use must be in the exempt production activity. The Department of Revenue looks at three factors when evaluating direct use: how physically close the equipment is to production, how close in time its use falls to actual production steps, and whether it has a direct causal relationship to the finished product. Equipment used for maintenance, administration, sales, delivery, or warehousing does not qualify. A forklift moving raw materials into a production line may qualify; the same forklift moving finished goods out to a warehouse likely does not.⁹

How to Claim an Exemption at the Register

To claim any exemption based on who you are or how you’ll use the item, you fill out Pennsylvania’s exemption certificate, Form REV-1220. The form is a PDF from the Department of Revenue website. At the top, you pick between two types:

Unit exemption, which covers a single transaction.
Blanket exemption, which covers the current purchase and all future qualifying purchases from the same seller.¹⁰

Next, choose the specific exemption category and check only one. For resale, enter your eight-digit sales tax license number. For manufacturing, check the relevant operation (manufacturing, mining, farming, and so on). Nonprofits enter their eight-digit exemption number beginning with “75.”⁷ Fill in your name and address, sign, and give the form to the seller. The certificate is not sent to the state; it stays with the seller.

A blanket certificate stays effective for future purchases from that seller until your information changes. If your address, tax number, or exemption basis changes, provide an updated certificate. A missing signature, wrong category, or blank account number can invalidate the whole thing, so it pays to check the form before handing it over.

1
Department of Revenue. Sales, Use and Hotel Occupancy Tax
2
Department of Revenue. Retailer’s Information (REV-717)
3
Department of Revenue. Restaurant Industry Guidance
4
Pennsylvania Code & Bulletin. Pennsylvania Code 52.1 – Medicines, Medical Supplies, and Equipment
5
Pennsylvania General Assembly. Pennsylvania Statutes Title 72 PS Taxation and Fiscal Affairs 7204 – Exclusions from Tax
6
Department of Revenue. Digital Products
7
Pennsylvania Department of Revenue. Pennsylvania Tax Unit Exemption Certificate – REV-1220
8
Pennsylvania Code & Bulletin. Pennsylvania Code 32.3 – Sales for Resale
9
Pennsylvania Code & Bulletin. Pennsylvania Code 32.32 – Manufacturing and Processing
10
PA Business One-Stop Hub. Help Guides – Complete the PA Tax Exemption Certificate