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PA Use Tax

What is Use Tax?
Use tax is the counterpart of sales tax and applies to taxable purchases made over the Internet, through toll-free numbers, from mail order catalogs and from out-of-state locations, or any other occasion where sales tax was not charged and collected by the seller. The use tax rate is the same as the sales tax rate: 6 percent state tax, plus an additional 1 percent local tax for items purchased or used in Allegheny County and 2 percent local tax for Philadelphia.

If you purchase items or services subject to sales tax for which the seller does not charge and collect sales tax on the invoice or receipt, you are personally responsible for remitting the use tax directly to the PA Department of Revenue. Examples of taxable items include the following: antiques, paintings, appliances, books, stationery, computers, exercise equipment, sports equipment, formal clothing, furniture, furnishings, jewelry, luggage, handbags, musical instruments, office equipment, souvenirs, televisions, radios, stereo equipment, video equipment and camera equipment. Examples of taxable services include lawn care, pest control, self-storage, building cleaning and maintenance services such as housekeeping services. See the Retailer’s Information Guide (REV-717) for an extensive, though not comprehensive,
list of taxable items and services. This method of reporting and paying use tax may not be used for purchases of motor vehicles, watercraft, boats, ATVs, snowmobiles or cigarettes.

Certain utilities, which are not subject to sales and use tax when purchased exclusively for residential use, become subject to sales and use tax when used for commercial purposes. Commercial purposes includes rental property owned by an individual and held out for rent by another individual or business. Exceptions include properties with separate metering for rental units and common areas where the common areas utilities is included as used for commercial purposes and the rental unit property is residential rental property when the utilities are paid for by the tenants. If you are including electricity, natural gas, fuel oil, or kerosene in your calculation of utilities expense and the property is not listed as commercial property with the utility company or as a commercial entity with the fuel oil or kerosene supplier, you should report use tax due on the related expense amounts for these utility expenses on line 25 of the PA-40.

If you have receipts or purchase records for items or services subject to use tax, use the worksheet below to calculate your use tax liability. Taxpayers are encouraged to review purchase histories made available online by popular Internet sellers and use that information to calculate the tax due. Note that this worksheet must be used to calculate use tax due on individual purchases over $1,000. If you paid some sales tax on items – for example, sales tax at a lower rate paid to another state or sales tax paid to Pennsylvania but not Philadelphia – you may offset your use tax liability by the sales tax already paid using this worksheet.

For detailed information on use tax reporting responsibilities and options, visit www.revenue.state.pa.us/usetax.

 

Use Tax Calculation

Line 1 - Enter the amount of purchases of taxable items subject to Pennsylvania use tax, including shipping & handling.

Line 2 - Enter the amount of purchases of taxable services subject to Pennsylvania use tax.

Line 3 - Total Taxable Purchases and utilities expense (Line 1 plus Line 2 – Calculated automatically)

Line 4 - Enter the Tax Rate (0.07 Allegheny County, 0.08 Philadelphia or 0.06 state)  

Line 5 - Use Tax (Line 3 multiplied by Line 4 – Calculated automatically).

Line 6 – Additional estimated use tax from table 1.

Line 7 – Sales tax previously paid on any amount included on Lines 1 and 2 (up to 0.07 per item for Allegheny County, 0.08 for Philadelphia or 0.06 state)

Line 8 – Total use tax liability. (Line 5 plus Line 6, then subtract Line 7 – Calculated automatically.) Enter the amount of Line 25 of your PA-40, Pennsylvania Personal Income Tax Return.

 

Table 1 – Estimated Use Tax Due


PA-40 Line 9, Total
PA-Taxable Income


City of Philadelphia

 

Allegheny County


Remainder of PA

 

$15,000 and less  

 

$8

 

$7

 

$6

 

$15,001 - $30,000

 

$17

 

$14

 

$12

 

$30,001 - $50,000

 

$22

 

$19

 

$17

 

$50,001 - $75,000

 

$30

 

$26

 

$23

 

$75,001 - $100,000

 

$43

 

$37

 

$32

 

$100,001 - $150,000

 

$59

 

$52

 

$44

 

$150,001 - $200,000

 

$76

 

$66

 

$57

 

> $200,000

 

.03% (0.0003) of PA-40 Line 9, Total PA-Taxable Income, for PA or $75 whichever amount is smaller, .035% (.0.00035) for Allegheny County or $88 whichever amount is smaller. 04% (0.0004) for Philadelphia County or $100 whichever amount is smaller.



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