Philadelphia's Sales Tax Rate and What It Covers
Philadelphia charges a sales tax of 8 percent on most goods and some services you buy within the city. This rate is made up of two parts: Pennsylvania's state sales tax of 6 percent, plus Philadelphia's local sales tax of 2 percent. When you buy something at a store, restaurant, or online retailer that ships to Philadelphia, that 8 percent gets added to your bill at checkout.
Not everything is taxed the same way. Groceries you buy at a supermarket to cook at home are not taxed — this includes items like milk, bread, vegetables, and meat. However, prepared foods and restaurant meals are taxed at the full 8 percent. If you buy a sandwich from a deli counter, it is taxed. If you buy a loaf of bread to make sandwiches at home, it is not.
Clothing and footwear under $110 per item are also exempt from sales tax in Pennsylvania, which means you do not pay tax on most everyday clothes and shoes. Items over $110 are taxed on the amount above that threshold. Some services like haircuts, dry cleaning, and repairs are taxed, while others like medical services are not.
Key Takeaways
- Philadelphia's sales tax is 8 percent, combining Pennsylvania's 6 percent state tax with the city's 2 percent local tax.
- Groceries for home cooking are not taxed, but prepared foods, restaurant meals, and takeout are taxed at the full 8 percent.
- Clothing and shoes under $110 per item are exempt from tax, but items over that price are taxed on the amount above $110.
- Services like haircuts and dry cleaning are taxed, while medical and dental services are generally not taxed.
- Online purchases shipped to Philadelphia are subject to the same 8 percent sales tax as in-store purchases.
When You Pay Sales Tax in Philadelphia
You pay sales tax at the point of sale — when you hand over money or complete a purchase. For in-store shopping, the cashier adds the tax to your total. For online orders shipped to a Philadelphia address, the retailer calculates and adds the tax before you check out. You do not file anything separately or pay tax later; it is included in what you pay.
The tax applies to purchases made within Philadelphia city limits. If you buy something in a neighboring suburb like Cheltenham or Bensalem, you pay that area's sales tax instead, which may be different. If you order online from a national retailer, the tax depends on where the item ships to, not where the company is based.
Groceries, Prepared Foods, and the Tax Difference
Understanding which foods are taxed and which are not can save you money at checkout. Unprepared groceries — raw ingredients you cook yourself — are never taxed in Pennsylvania. This includes fresh produce, meat, poultry, fish, dairy products, bread, cereal, canned goods, frozen vegetables, and pantry staples. You can buy a week's worth of groceries and pay no sales tax on any of it.
The line between grocery and prepared food is where the tax kicks in. If a food item is ready to eat or requires only heating, it is taxed. Restaurant meals, takeout, deli sandwiches, rotisserie chicken, pizza by the slice, coffee from a café, and bakery items like donuts or pastries are all taxed at 8 percent. If you buy a rotisserie chicken from the supermarket's prepared foods section, it is taxed. If you buy a raw chicken to roast at home, it is not.
Alcohol has its own rules. Beer, wine, and spirits are taxed at the regular 8 percent sales tax rate, plus Pennsylvania charges additional excise taxes on alcohol that are separate from sales tax.
Clothing, Shoes, and Items Over $110
Pennsylvania's clothing exemption makes most everyday shopping tax-free, but the $110 threshold matters for expensive items. Any single piece of clothing or pair of shoes under $110 is not taxed. This covers jeans, shirts, coats, hats, socks, sneakers, and boots — almost everything most people buy.
When an item costs $110 or more, only the amount above $110 is taxed. A $150 jacket would be taxed on $40 (the amount over $110), not the full price. A $200 pair of designer shoes would be taxed on $90. Accessories like belts, scarves, gloves, and jewelry are taxed regardless of price, because they are not classified as clothing or footwear.
Services That Are and Are Not Taxed
Many services in Philadelphia are subject to sales tax, while others are exempt. Taxed services include haircuts and salon services, dry cleaning and laundry, shoe repair, tailoring, and car washes. When you pay for these services, the 8 percent tax is added to your bill.
Services that are not taxed include medical and dental care, therapy and counseling, legal services, accounting and tax preparation, and veterinary services. If you visit a doctor or dentist, you do not pay sales tax on the visit or most medical supplies. However, if you buy over-the-counter medications like pain relievers or cold medicine at a pharmacy, those are taxed.
Online Shopping and Out-of-State Purchases
When you order online and have something shipped to a Philadelphia address, you pay Philadelphia's 8 percent sales tax at checkout. This applies whether the retailer is based in Pennsylvania, another state, or overseas. The tax is calculated based on your shipping address, not the seller's location.
If you have an item shipped to an address outside Philadelphia — say, to a friend's house in the suburbs — you pay that area's sales tax instead. Some people try to avoid Philadelphia's tax by having items shipped elsewhere, but this only works if the item genuinely goes to that other address.
Marketplace sellers on platforms like Amazon, eBay, and Etsy are required to collect and pay sales tax on items shipped to Philadelphia, just like traditional retailers. You cannot avoid the tax by buying from a small seller or private vendor.
Who Collects and Pays the Tax
The business selling you the item — whether a store, restaurant, or online retailer — is responsible for collecting the sales tax from you and sending it to the city and state. You do not send the tax directly to Philadelphia. The seller adds it to your bill, collects it from you, and then forwards it to the appropriate tax authority.
Businesses are required by law to register for a sales tax license and file regular tax returns showing what they collected. If a business fails to collect or pay the tax, that is between the business and the city — it does not affect what you owe. You pay the tax at the register, and your responsibility ends there.
Frequently Asked Questions
Do I pay sales tax on groceries in Philadelphia?
No, unprepared groceries are not taxed. Raw vegetables, meat, dairy, bread, and canned goods are all tax-free. However, prepared foods like rotisserie chicken, deli sandwiches, and bakery items are taxed at 8 percent.
What happens if I buy clothes over $110?
Only the amount above $110 is taxed. A $150 coat would be taxed on $40. Accessories like belts and jewelry are always taxed, regardless of price.
Do I pay sales tax on medical services?
No, doctor visits, dental care, and most medical services are not taxed. Over-the-counter medications bought at a pharmacy are taxed, but prescription medications are not.
Is sales tax added to restaurant bills?
Yes, all restaurant meals and takeout are taxed at 8 percent. This includes deli sandwiches, coffee, pizza, and any prepared food you buy to eat.
Do online purchases get taxed if shipped to Philadelphia?
Yes, items shipped to a Philadelphia address are taxed at 8 percent, the same as in-store purchases. The tax is added at checkout based on your shipping address.