Sales tax on invoices in Pennsylvania

In Pennsylvania, a contractor pays the tax on everything it furnishes and installs in construction activities and charges its customer no sales tax. It may build that tax into its bid, but not as a separately stated item. The exceptions are property that doesn’t become part of the real estate, repairs to personal property, and the taxable building maintenance, cleaning and lawn care services.

Retail tax license and use tax

Pennsylvania sales and use tax applies to the retail sale, consumption, rental or use of tangible personal property, including digital products, to certain services relating to that property, and to specific business services. A business that sells taxable items or performs taxable services needs a Sales, Use, and Hotel Occupancy Retail Tax License, through the Pennsylvania Online Business Tax Registration in myPATH. Use tax, at the same rate as sales tax, is due on taxable purchases used in Pennsylvania when no sales tax was paid to a vendor.

Construction activities: tax in your costs, not on your bill

Construction activities are attaching or affixing tangible personal property to real estate so it becomes a permanent part of it, and repairing real estate, even when no property is transferred. That covers lump-sum, cost-plus, unit-price and time-and-materials contracts alike.

• You pay the tax on the purchase price of the materials, equipment, components and supplies you furnish and install. If your work is only construction activities, pay it to your supplier when you buy; on purchases from vendors not licensed to collect Pennsylvania tax, remit it to the Department of Revenue under a use tax license number.
• You charge your customer none. In the regulation’s example, a built-in dishwasher becomes part of the realty and is included in the overall price of the house, and the contractor charges no sales tax. The tax you paid may be included in your bid proposal, but not as a separately stated item.
• What’s presumed permanent: absent satisfactory evidence to the contrary, central heating systems, furnaces, lighting fixtures, wires and switches, electrical fixtures and outlets, and roofing repairs are presumed to become part of the real estate.
• Exempt customers: on a construction contract with an exempt entity, such as a purely public charity or a government entity, you may claim exemption on property that qualifies as “building machinery and equipment” under 72 P.S. §7201(pp). Give the vendor an exemption certificate that identifies the entity and its exemption number, with a list of the property claimed.

When a Pennsylvania contractor collects tax

• Sales activities: transferring property and installing it so that it doesn’t become a permanent part of the real estate is a sales activity, and a contractor making retail sales must register to collect tax on them. Absent satisfactory evidence to the contrary, window air conditioners and appliances that aren’t built in are presumed to be such property. Labor and delivery charges on the retail sale and installation of tangible personal property are taxable even when stated separately. In the regulation’s example, a portable dishwasher sold for $200, delivery, unpacking and installation included, is taxed on the whole $200.
• Repairs to personal property: repairing or altering tangible property, or installing a part in other personal property as a repair or replacement, makes you a vendor that collects and remits tax.
• Building maintenance, cleaning and lawn care: taxable services, below.

A contractor that does both construction and sales activities must be licensed to collect and remit sales tax.

Services: a listed set

Beyond certain services to tangible personal property, the Department’s REV-717 lists Pennsylvania’s taxable services. They include disinfecting or pest control, building maintenance or cleaning, lawn care, lobbying, employment agency, help supply, self-storage and premium cable services, and they’re presumed taxable when delivered or benefiting in Pennsylvania.

Building cleaning and maintenance vs building repair

Building maintenance and building cleaning performed in Pennsylvania are taxable, but building repair on buildings or other property permanently affixed to realty isn’t.

• Cleaning includes janitorial, maid or housekeeping services, office or building cleaning, window cleaning, floor waxing, chimney cleaning and office carpet cleaning, and siding or exterior cleaning of a building, including pressure washing.
• Maintenance is routine and periodic service that keeps a building in satisfactory operating condition, such as cleaning, oiling, greasing and replacing parts. Central air conditioning maintenance is taxable, except on residential air-conditioning equipment.
• Neither: building repairs; plumbing repairs, such as opening drains or repairing water leaks; maintaining, cleaning or repairing boilers and furnaces; maintaining or repairing residential air-conditioning equipment; interior and exterior painting; and sandblasting and brick pointing. Repairing real estate, such as a plumbing repair, is a construction activity, so the construction rule above applies.

Maid services in a two-party arrangement, where the person served must withhold federal income and Social Security taxes, aren’t building cleaning services. Qualified charitable, religious and nonprofit educational organizations (except for an unrelated trade or business), volunteer fire companies, the federal government, and the Commonwealth and its subdivisions, including public school districts, buy these services exempt.

Lawn care: taxable upkeep, nontaxable landscaping

Lawn care performed in Pennsylvania is taxable on the total charge, except when it’s bought by a qualified purely public charity, charitable organization, volunteer fire company, religious organization or nonprofit educational institution (unless used in an unrelated trade or business), the federal government, or the Commonwealth or its subdivisions, including public school districts. It includes mowing, trimming or edging lawns; applying herbicides, insecticides or fungicides to lawns; overseeding, sodding or plugging existing lawns; and pruning shrubbery along with other lawn care. A lawn is grass next to a building, not athletic fields, cemeteries, golf courses, fields, parks, or utility or highway right-of-ways.

Section 55.6 of the Pennsylvania Code gives these, among others, as not taxable lawn care: seeding, sodding or plugging to establish a new lawn (presumed new when done with building construction); trimming, pruning or fertilizing trees; planting or removing shrubbery or trees; designing lawns or landscapes; maintaining shrubbery, flower or vegetable beds; and leaf raking billed separately.

Tax line on your invoice

• Construction activities: no sales tax line. The tax you paid can sit inside your price, never as a separate item.
• Sales and installation: tax the whole charge, labor and delivery included.
• Cleaning, maintenance or lawn care beside nontaxable work: state the taxable services separately, or the whole invoice is taxable. In the regulation’s fire-restoration example, separately stated repair charges aren’t taxed and only the cleaning charges are; unseparated, all of it is taxable.

Local tax in Philadelphia and Allegheny County

Philadelphia adds a 2% local sales tax and Allegheny County a 1% local sales tax to the state rate on this page. Under Act 21 of 2026, vendors already collecting the state tax must collect them on taxable sales to customers in those counties, and local tax follows the point of destination, where the product or service is delivered, as the state tax does. Before, it was generally based on the vendor’s location. Where no sales tax is charged, the purchaser still owes use tax on taxable items or services used in either county.