Services in Pennsylvania are exempt from sales tax by default. The state taxes only a specific list of services at its 6% rate, so the question of which services are taxable in Pennsylvania comes down to whether your service appears on that enumerated list. If it does, you charge tax. If it doesn’t, you don’t. The list is longer than most business owners expect, which is why the wrong assumption tends to run in one direction: people forget to collect on services that quietly made the cut.
The Default Rule
Pennsylvania uses an enumeration approach. Rather than taxing all services and carving out exceptions, the Tax Reform Code names the services that are taxable and treats everything else as exempt. A landscape architect, a management consultant, and a surgeon can bill without collecting sales tax on their core work. A pest control company, a janitorial service, and a staffing agency cannot. The dividing line is the statute, not the industry.
Services That Are Taxable
Cleaning, Maintenance, and Pest Control
Janitorial work, office cleaning, window washing, floor waxing, maid and housekeeping services, and lawn care are all taxable. Extermination and fumigation belong in the same category.1Commonwealth of Pennsylvania. REV-717 Retailer’s Information Booklet
Repairs, Alterations, and Installation on Personal Property
Repairing, altering, mending, pressing, or cleaning tangible personal property is taxable. That covers auto repair, tailoring, and equipment servicing. Installing a replacement part on a machine counts too. The tax applies whether or not the vendor transfers any tangible property along with the labor. One wrinkle: if the repaired item later gets permanently attached to real estate, the vendor still collects tax on the repair service itself.2Cornell Law Institute. 61 Pa Code 31.5 – Persons Rendering Taxable Services
Staffing and Secretarial Work
Employment agency fees and help supply services are taxable when the staffing firm provides workers supervised by the purchaser. Secretarial and editing services, including letter writing and resume preparation, are also on the list.1Commonwealth of Pennsylvania. REV-717 Retailer’s Information Booklet
Lobbying, Self-Storage, Information Services, and Catering
Fees paid to lobbyists are taxable. So are self-storage rentals. Credit reporting, debt collection, and adjustment services are treated as taxable information services. Catering is taxable as well.1Commonwealth of Pennsylvania. REV-717 Retailer’s Information Booklet
Telecommunications and Streaming
Interstate and intrastate telecommunications services billed to a Pennsylvania address are taxable. That includes mobile phone service, premium cable, video programming, and streaming subscriptions. The total charge is taxed whether billing is flat-rate or usage-based.3Cornell Law Institute. 61 Pa Code 60.20 – Telecommunications Service Basic local residential telephone service is exempt.
Hotel Occupancy
Renting a room, apartment, or house for fewer than 30 days to the same person triggers the 6% state hotel occupancy tax. Traditional hotels, short-term rentals, and bookings through online platforms all fall under it.4Commonwealth of Pennsylvania. Home-sharing/Third-party Broker Rentals
Digital Products and Software
Since Act 84 of 2016, Pennsylvania has applied its 6% sales tax to digital products delivered electronically. E-books, streaming video and music, downloaded apps, online games, and audio subscriptions are all taxable.5Commonwealth of Pennsylvania. Digital Products
Canned (off-the-shelf) computer software is taxable, and so are the maintenance contracts, upgrades, and support services tied to that software.5Commonwealth of Pennsylvania. Digital Products Custom software built from scratch for a single purchaser is exempt. The line between the two matters and is often misread. If you buy a standard license and the vendor configures it for you, that is still canned software. Truly custom software means the code was written specifically for your organization.
Services That Stay Exempt
Professional Services
Legal, medical, accounting, architectural, and engineering services are not subject to sales tax. This exemption is broad and covers most of the professional services a household or business hires.
Residential Utilities
Electricity, natural gas, and water used in a residence are generally exempt. These utilities are also exempt when used predominantly and directly in manufacturing, processing, farming, or public utility operations.6PA Code and Bulletin. 61 Pa Code 9.3 – Exempt Transactions
Real Property Improvements
Labor charges for permanently attaching tangible personal property to real estate are generally not taxable. Installing a new roof, replacing a furnace, or building an addition are treated as real property improvements, not taxable services.6PA Code and Bulletin. 61 Pa Code 9.3 – Exempt Transactions The materials themselves are generally taxable. A roofing contractor pays tax on the shingles but doesn’t collect tax on the labor to install them. Contractors misapply this often, and the Department of Revenue pays attention.
Bundled Invoices
Real-world invoices frequently mix taxable and exempt items into a single price. Pennsylvania requires records detailed enough to show which portion is taxable and which is not.7Commonwealth of Pennsylvania. Taxability of Canned Computer Software, Digital Goods, and Related Services If you cannot separate the components, the whole charge may become taxable.
The state looks at substance over form. Calling a charge a “consulting fee” doesn’t make it exempt if the underlying work is a taxable service, and artificially splitting a transaction doesn’t change its character.7Commonwealth of Pennsylvania. Taxability of Canned Computer Software, Digital Goods, and Related Services Itemize invoices carefully. A lump-sum bill that mingles taxable repair work with exempt consulting is an audit magnet.
Use Tax on Out-of-State Services
Buying a taxable service from a vendor outside Pennsylvania and paying no Pennsylvania sales tax at the time of purchase creates a use tax obligation at the same 6% rate.8Cornell Law Institute. 61 Pa Code 31.7 – Use Tax Use tax exists to close the loophole of buying from out-of-state providers, and it applies whenever the service is used or consumed in Pennsylvania without tax having been paid.
Businesses with recurring use tax obligations can register for a use tax account through myPATH and file returns there. Individuals who owe use tax on occasional purchases can also file through myPATH.9Commonwealth of Pennsylvania. Register My Business for Taxes Compliance in this area is low but audit exposure is real, particularly for companies that routinely hire out-of-state service providers.
Rates in Allegheny County and Philadelphia
The statewide sales and use tax rate is 6%.10Commonwealth of Pennsylvania. Tax Rates Two jurisdictions add a local surcharge:
- Allegheny County adds 1%, for a combined 7%.
- Philadelphia adds 2%, for a combined 8%.10Commonwealth of Pennsylvania. Tax Rates
The local taxes attach to the same transactions as the state tax, including taxable services. A janitorial company working in Philadelphia collects 8%, not 6%.
What Providers of Taxable Services Must Do
Any business providing taxable services in Pennsylvania must register for a Sales, Use, and Hotel Occupancy Tax license before collecting tax. Registration is free through myPATH.9Commonwealth of Pennsylvania. Register My Business for Taxes Collecting sales tax without the license is not lawful.
The Department of Revenue assigns a filing frequency of monthly, quarterly, or semi-annually based on tax liability. Returns are due for every period, even one with no taxable sales, and are generally due by the 20th of the month following the reporting period. Filing and payment run through myPATH or Telefile.11Commonwealth of Pennsylvania. Sales, Use and Hotel Occupancy Tax
Outstanding tax balances accrue interest at 7% annually for 2025 and 2026, calculated daily.12Commonwealth of Pennsylvania. 2026 Interest Rate and Calculation Method Late filing carries a penalty of 5% of the tax due per month or fraction of a month, capped at 25%. Businesses that collect sales tax and fail to remit it face the steepest consequences, because collected sales tax is trust-fund money held on behalf of the state.
One point that catches service businesses: providers of taxable services are treated as the consumers of any materials and equipment they use in performing the service but don’t transfer to the customer.2Cornell Law Institute. 61 Pa Code 31.5 – Persons Rendering Taxable Services A cleaning company owes sales tax on the supplies it buys and uses on the job.
Exemption Certificates
Certain buyers can purchase otherwise-taxable services tax-free by presenting a Pennsylvania Exemption Certificate (Form REV-1220) to the vendor. Qualifying purchasers include manufacturers buying services used directly in production, nonprofit organizations making purchases for their exempt mission, and businesses buying services they intend to resell.13Commonwealth of Pennsylvania. Pennsylvania Exemption Certificate REV-1220
The certificate comes in a single-transaction version and a blanket version for ongoing relationships. To be valid, it must be filled out completely, signed by an authorized person, and in the seller’s hands within 60 days of the sale. Sellers must keep the certificate on file for at least four years.13Commonwealth of Pennsylvania. Pennsylvania Exemption Certificate REV-1220 A missing or incomplete certificate at audit shifts the uncollected tax back onto the seller. Sellers accepting certificates in good faith are generally protected, but good faith requires that the claimed exemption make sense for what was actually sold.