Name: OpenAccountants MCP Server
Author: OpenAccountants

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pa-sales-tax.md263 lines8.4 KB

v20Pennsylvania

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1	---
2	name: pa-sales-tax
3	description: >
4	Use this skill whenever asked about Pennsylvania sales and use tax, PA DOR filings, Pennsylvania clothing exemption, Philadelphia sales tax, Allegheny County tax, or any request involving Pennsylvania state sales and use tax compliance. Trigger on phrases like "Pennsylvania sales tax", "PA sales tax", "PA DOR", "PA-3", "Philadelphia tax", "Pennsylvania clothing exemption", or any request involving Pennsylvania sales tax. ALWAYS read this skill before touching any Pennsylvania sales tax work.
5	version: 2.0
6	jurisdiction: US-PA
7	tax_year: 2025
8	category: us-states
9	depends_on:
10	- us-sales-tax
11	validation_status: ai-drafted-q3
12	---
13
14	# Pennsylvania Sales and Use Tax Skill v2.0
15
16	---
17
18	## Section 1 -- Quick Reference
19
20	\| Field \| Value \|
21	\|---\|---\|
22	\| State \| Pennsylvania \|
23	\| Tax \| Sales and Use Tax (state + local) \|
24	\| State rate \| 6.00% \|
25	\| Local rates \| Philadelphia 2.00%; Allegheny County 1.00% \|
26	\| Maximum combined rate \| 8.00% (Philadelphia) \|
27	\| Sourcing \| Destination-based \|
28	\| Primary legislation \| Tax Reform Code of 1971, Article II (72 P.S. 7201 et seq.) \|
29	\| Tax authority \| Pennsylvania Department of Revenue (PA DOR) \|
30	\| Filing portal \| https://www.revenue.pa.gov \|
31	\| Return form \| PA-3 \|
32	\| SST member \| No \|
33	\| Economic nexus \| $100,000 in gross sales (effective July 1, 2019) \|
34	\| Contributor \| Open Accountants Community \|
35	\| Validated by \| Pending -- requires PA CPA or EA sign-off \|
36	\| Skill version \| 2.0 \|
37
38	### Taxability Quick Matrix
39
40	\| Item \| Taxable? \| Notes \|
41	\|---\|---\|---\|
42	\| Tangible personal property \| YES \| Default taxable \|
43	\| SaaS / cloud software \| YES \| Taxable as canned software; custom software exempt \|
44	\| Grocery food \| NO \| Most food for home consumption exempt \|
45	\| Clothing \| NO \| Most clothing exempt (key PA distinction) \|
46	\| General services \| NO \| Most services exempt unless specifically enumerated \|
47	\| Repair/maintenance of TPP \| YES \| Taxable \|
48	\| Cleaning services (commercial) \| YES \| Taxable \|
49	\| Digital products \| YES \| Taxable (digital downloads) \|
50	\| Manufacturing equipment \| NO \| Exempt (directly used in manufacturing) \|
51
52	### Conservative Defaults
53
54	\| Ambiguity \| Default \|
55	\|---\|---\|
56	\| Product taxability unknown \| Taxable \|
57	\| Clothing item unclear \| Exempt (most clothing is exempt in PA) \|
58	\| Custom vs canned software unknown \| Taxable (canned) \|
59	\| Philadelphia or Allegheny unclear \| State rate only (6%) \|
60
61	---
62
63	## Section 2 -- Required Inputs and Refusal Catalogue
64
65	### Required Inputs
66
67	Minimum viable: Nexus confirmation, PA sales tax license, filing frequency, products/services sold, whether selling into Philadelphia or Allegheny County.
68
69	Recommended: Sales by jurisdiction, exemption certificates, prior PA-3 returns.
70
71	Ideal: Complete transaction log, exemption certificate register.
72
73	### Refusal Catalogue
74
75	R-PA-1 -- Audit defense. "Escalate."
76	R-PA-2 -- Complex use tax on construction. "Construction use tax exemptions require specialist analysis. Escalate."
77
78	---
79
80	## Section 3 -- Transaction Pattern Library
81
82	### 3.1 Taxable Sales
83
84	\| Pattern \| Treatment \| Notes \|
85	\|---\|---\|---\|
86	\| Electronics / hardware \| Taxable at combined rate \| TPP \|
87	\| SaaS subscription (canned) \| Taxable \| Canned software \|
88	\| Repair services for TPP \| Taxable \| Enumerated service \|
89	\| Cleaning services \| Taxable \| Enumerated \|
90	\| Digital downloads \| Taxable \| \|
91
92	### 3.2 Exempt Sales
93
94	\| Pattern \| Treatment \| Notes \|
95	\|---\|---\|---\|
96	\| Clothing (most) \| Exempt \| PA exempts most clothing \|
97	\| Grocery food (most) \| Exempt \| Food for home consumption \|
98	\| Custom software \| Exempt \| Designed for specific customer \|
99	\| Prescription medicine \| Exempt \| \|
100	\| Resale with certificate \| Exempt \| REV-1220 \|
101
102	---
103
104	## Section 4 -- Worked Examples
105
106	### Example 1 -- Sale in Philadelphia
107
108	Input: Retailer sells electronics for $1,000 in Philadelphia. Rate: 8.00% (6% + 2%).
109
110	Classification: Tax = $80.00. Total = $1,080.00.
111
112	### Example 2 -- Clothing Sale
113
114	Input: Retailer sells $200 jacket in Pittsburgh (Allegheny County).
115
116	Reasoning: Most clothing is exempt in Pennsylvania.
117
118	Classification: Tax = $0. Clothing exempt.
119
120	### Example 3 -- SaaS in PA (Non-Philadelphia)
121
122	Input: Business subscribes to canned SaaS product. $500/month. Located outside Philadelphia/Allegheny.
123
124	Classification: Tax = $30.00/month (6% state rate). Canned software is taxable.
125
126	### Example 4 -- Custom Software
127
128	Input: Business pays $50,000 for custom-developed software.
129
130	Classification: Tax = $0. Custom software is exempt in PA.
131
132	---
133
134	## Section 5 -- Tier 1 Rules (When Data Is Clear)
135
136	### 5.1 Rate Structure
137
138	State: 6.00%. Philadelphia: +2.00% = 8.00%. Allegheny County: +1.00% = 7.00%. All other areas: 6.00%.
139
140	### 5.2 Filing Frequency
141
142	\| Frequency \| Criteria \| Due Date \|
143	\|---\|---\|---\|
144	\| Monthly \| Tax liability > $75/month \| 20th of following month \|
145	\| Quarterly \| Tax liability $75 or less/month \| 20th after quarter end \|
146	\| Semi-annual \| Very low volume \| 20th after period end \|
147
148	### 5.3 Economic Nexus
149
150	$100,000 in gross sales into PA. Effective July 1, 2019. No transaction count test.
151
152	### 5.4 Marketplace Facilitator
153
154	Required to collect and remit. Effective April 1, 2020.
155
156	### 5.5 Vendor Discount
157
158	1% of tax collected for timely filing. Maximum $25/month for monthly filers.
159
160	### 5.6 Penalties
161
162	\| Penalty \| Rate \|
163	\|---\|---\|
164	\| Late filing \| 5% per month (max 25%) \|
165	\| Late payment \| 3% per month (max 18%) \|
166	\| Interest \| Federal underpayment rate + 3% \|
167
168	---
169
170	## Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)
171
172	### 6.1 Custom vs Canned Software
173
174	Custom software (designed for a specific customer) is exempt. Canned/prewritten software is taxable. Mixed situations require analysis. Flag for reviewer.
175
176	### 6.2 Construction Exemptions
177
178	Certain building machinery and equipment used in construction may qualify for exemption. Complex rules. Flag for reviewer.
179
180	---
181
182	## Section 7 -- Working Paper Template
183
184	```
185	PENNSYLVANIA SALES TAX WORKING PAPER (PA-3)
186	Business: _______________ License: ___________
187	Period: ___________
188
189	A. GROSS SALES ___________
190	B. EXEMPT SALES (clothing, food, resale) ___________
191	C. TAXABLE SALES (A - B) ___________
192	D. STATE TAX (C x 6%) ___________
193	E. LOCAL TAX (Philadelphia 2% / Allegheny 1%) ___________
194	F. TOTAL TAX ___________
195	G. VENDOR DISCOUNT (if timely) ___________
196	H. NET REMITTANCE ___________
197	```
198
199	---
200
201	## Section 8 -- Bank Statement Reading Guide
202
203	\| Narration \| Classification Hint \|
204	\|---\|---\|
205	\| PA DOR / REVENUE PA \| Tax payment -- exclude \|
206	\| AMAZON / SHOPIFY / STRIPE \| Marketplace or processor \|
207
208	---
209
210	## Section 9 -- Onboarding Fallback
211
212	```
213	ONBOARDING QUESTIONS -- PENNSYLVANIA SALES TAX
214	1. Do you have a PA sales tax license?
215	2. Filing frequency (monthly / quarterly / semi-annual)?
216	3. Do you sell into Philadelphia or Allegheny County?
217	4. Nexus type?
218	5. Products or services sold?
219	6. Do you sell clothing (exempt in PA)?
220	7. Do you sell software (custom or canned)?
221	8. Sell to exempt entities?
222	```
223
224	---
225
226	## Section 10 -- Reference Material
227
228	### Key Legislation
229
230	\| Topic \| Reference \|
231	\|---\|---\|
232	\| Sales tax imposition \| 72 P.S. 7202 \|
233	\| Exemptions \| 72 P.S. 7204 \|
234	\| Clothing exemption \| 72 P.S. 7204(26) \|
235	\| Software taxability \| PA DOR guidance \|
236	\| Economic nexus \| Act 13 of 2019 \|
237	\| Local taxes \| Philadelphia Code; Allegheny County \|
238
239	### Changelog
240
241	\| Version \| Date \| Change \|
242	\|---\|---\|---\|
243	\| 2.0 \| April 2026 \| Full rewrite to v2.0; taxability matrix; clothing exemption; custom vs canned software \|
244	\| 1.0 \| 2025 \| Initial version \|
245
246	---
247
248	## PROHIBITIONS
249
250	- NEVER charge sales tax on most clothing in Pennsylvania -- clothing is generally exempt
251	- NEVER treat custom software as taxable -- only canned/prewritten software is taxable
252	- NEVER forget the Philadelphia (2%) and Allegheny County (1%) local surtaxes
253	- NEVER treat grocery food as taxable -- most food for home consumption is exempt
254	- NEVER present calculations as definitive -- direct client to qualified CPA or EA
255
256	---
257
258	## Disclaimer
259
260	This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional before filing or acting upon.
261
262	The most up-to-date, verified version of this skill is maintained at [openaccountants.com](https://openaccountants.com).
263

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Use this skill whenever asked about Pennsylvania sales and use tax, PA DOR filings, Pennsylvania clothing exemption, Philadelphia sales tax, Allegheny County tax, or any request involving Pennsylvania state sales and use tax compliance. Trigger on phrases like "Pennsylvania sales tax", "PA sales tax", "PA DOR", "PA-3", "Philadelphia tax", "Pennsylvania clothing exemption", or any request involving Pennsylvania sales tax. ALWAYS read this skill before touching any Pennsylvania sales tax work.

US-PAty-2025

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