Key figures
Pennsylvania receivables
2026, with sources
SaaS is taxable
Pennsylvania is one of the states where a software company’s answer is yes. Since Act 84 of 2016, canned software is taxable however it is delivered, streamed or accessed, and whether bought outright, by subscription or on metered pricing. Remotely accessed software is taxable when the user is in Pennsylvania. Custom software written for its original purchaser is not taxable.
The Department also looks through labels: configuration, modification and support sold with canned software are part of the taxable price, except separately invoiced help desk or call center support. Billing a SaaS subscription and an implementation fee on one line makes both taxable.
Nexus and rates
A seller without physical presence registers and collects once its gross sales into Pennsylvania pass $100,000 in the prior calendar year; there is no transaction count, and nontaxable sales count. The rate is 6% statewide, plus 1% in Allegheny County and 2% in Philadelphia. Registration is through myPATH, and the Department assigns a filing frequency from the account’s liability.
An example: a SaaS company with $150,000 of annual subscriptions to Pennsylvania customers, $30,000 of it billed to Philadelphia addresses, registers once it crosses $100,000, collects 6% from most of its Pennsylvania customers and 8% from the Philadelphia ones. A Pennsylvania business customer with users in other states can give the company an exemption certificate (REV-1220) allocating licenses out of state.
On the books
Collected tax is a liability, not revenue. Because the user’s location drives the tax and the Philadelphia and Allegheny rates differ, the billing system needs a service address per customer, and the Stripe payout reconciliation has to separate tax collected from revenue under ASC 606.
The federal baseline
This page covers what Pennsylvania adds. The federal rules underneath it apply here too.
Common questions
Is SaaS taxable in Pennsylvania?
Yes. Pennsylvania treats canned software as tangible personal property however it is delivered, including software accessed as a service and sold by subscription, so SaaS sold to Pennsylvania users is taxable at 6%, or 7% in Allegheny County and 8% in Philadelphia. Configuration and support bundled with it are generally taxable too; separately invoiced help desk support is not.
When does a remote seller have to register?
When its gross sales into Pennsylvania exceed $100,000 in the prior calendar year. Pennsylvania counts sales only, with no transaction test, and counts nontaxable sales toward the threshold.
Receivables next door
- DEDelaware receivablesDelaware has no sales tax, so there is nothing to collect from Delaware customers. A company operating in Delaware instead pays a gross receipts tax on its own receipts, 0.3983% for services after a $100,000 monthly exclusion.
- MDMaryland receivablesSince July 2025 Maryland taxes SaaS: 3% when sold for use in a business’s systems, 6% for individual use. Remote sellers register at $100,000 or 200 transactions.
- NJNew Jersey receivablesNew Jersey charges 6.625% sales tax and still counts 200 transactions toward economic nexus. Remotely accessed SaaS is generally not taxable; electronically delivered software is, unless bought for business use.
- NYNew York receivablesNew York taxes SaaS as prewritten software, at 4% plus local rates (8⅞% in NYC). Remote sellers register after $500,000 and 100 sales; a New York employee makes you a vendor at once.
- OHOhio receivablesOhio taxes SaaS used in business at 5.75% plus local rates, and the 200-transaction test still counts toward nexus.
- WVWest Virginia receivablesWest Virginia’s 6% sales tax reaches many services and prewritten software, while electronic data processing is exempt, so SaaS depends on what it does. Remote sellers register at $100,000 or 200 transactions.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
More of the Pennsylvania guide
- AccountingAccounting and state tax in PennsylvaniaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in PennsylvaniaPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in PennsylvaniaWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in PennsylvaniaRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in PennsylvaniaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.