Pennsylvania sales tax on restaurant meals, by county

Pennsylvania has no separate tax on restaurant meals. Instead, restaurant food and drink are taxed under the ordinary sales tax, at a rate that depends on the county. Groceries are largely exempt, which produces the main confusion for owners: the same loaf of bread is untaxed at a supermarket and taxed in a sandwich. This guide explains the structure for a restaurant, cafe, bakery or bar.

What are the rates?

The state sales tax is 6 percent. Two places add a local tax: Allegheny County, which includes Pittsburgh, adds 1 percent for a total of 7 percent, and Philadelphia adds 2 percent for a total of 8 percent, according to 2026 sales tax guides. Every other county stays at 6 percent. None of those guides is the Department of Revenue, so confirm the current rates with the Pennsylvania Department of Revenue before you set your register.

What is taxable?

Restaurant meals and drinks sold for consumption on or off the premises are taxable at the full rate. Guides note that a brewed cup of coffee sold by a cafe is taxable, even though coffee beans bought at a grocery store are exempt. Takeout, catering and delivered meals are generally taxable too. Alcohol is also subject to sales tax, and Pennsylvania has additional taxes on alcohol sales that are handled through its liquor system; see our guide to liquor licenses and BYOB.

What is exempt?

Most unprepared groceries are exempt, such as bread, milk, eggs, produce and packaged food sold to take home to prepare. The line is where a business sells food that is prepared to eat. A bakery that sells a loaf of bread to take home may be selling an exempt grocery, while the same bakery selling a sandwich or a coffee is selling a taxable meal. If you run a deli, bakery or market with a lunch counter, you may need to treat some items as exempt and others as taxable. Ask the Department about borderline items, such as cold salads sold by weight or a whole cake.

How do you set up the register?

1. Register for sales tax with the state and get your license before you make taxable sales.
2. Set up a taxable category for prepared food and drink, at 6 percent, 7 percent or 8 percent depending on your location.
3. Set up an exempt category for groceries you sell, if any.
4. Put the right rate on delivery and catering orders. The rate follows where the sale takes place, so check the rule for deliveries into a different county.
5. Print the tax on receipts and keep itemized records.
6. Reconcile your tax collected with your returns every month.

Test a few typical orders, including a sandwich with a bottle of water and a loaf of bread, to check that each item is treated correctly. Do this again after any software update, because updates sometimes reset tax tables. Ask your point-of-sale provider whether it updates local rates automatically and who is responsible if it gets one wrong. The legal responsibility for collecting the right amount stays with you.

How do you file?

Pennsylvania requires filing at set intervals depending on how much tax you collect. Larger collectors file more often. The Department of Revenue assigns your schedule when you register. Penalties apply for late filing and payment, and collected tax is held in trust for the state, which means an owner can be personally responsible if it is not paid. Keep the money in a separate account, and file on time even if you are short of cash.

What about service charges, tips and gift cards?

A voluntary tip is not part of the taxable price. A mandatory service charge is often part of the price subject to tax; check the Department's guidance before you add one. A gift card is generally not taxed when sold; the tax applies when it is used to buy taxable food. Deposits for private events are a liability until the event. Keep your event invoices itemized, so that you can show the tax on food, rentals and fees. If you are not sure whether a charge is taxable, ask the Department in writing and keep the answer, since a written reply is better evidence than a phone call.

What if you operate in more than one county?

If you have a food truck, a catering business or two locations, the rate depends on where each sale takes place. A truck that serves in Philadelphia on Friday and in a suburban county on Saturday must apply 8 percent and 6 percent respectively. Keep a log of locations and sales, and set up your point-of-sale system to change rates by location. A pop-up at a festival in Allegheny County uses the 7 percent rate.

What should you check each year?

Rates and exemptions can change in the state budget. Check the Department of Revenue's website each January, subscribe to its updates and review your register settings. If you are unsure how an item is treated, ask in writing and keep the answer. Local rules, such as Philadelphia's own taxes on beverages, may affect your suppliers' prices even though they are not on your register.

More guides for your business:

• Pennsylvania tip pooling and service charge rules for restaurants
• Pennsylvania tipped wage and tip credit for restaurants: a worked example
• Hiring teenagers at a Pennsylvania restaurant: permits and hours

More in the US guides for food businesses.