I sell both formal and casual wear in downtown Philadelphia. My business opened two months ago and I want to make sure I'm collecting sales tax for the right items sold.

ANSWER

The BIDaWIZ Team's Answer:

In most cases, clothing is not subject to sales tax in Pennsylvania. However, there are exceptions. Specifically, formal apparel, most furs and active wear normally worn or used when engaged in sports is subject to sales tax. With regards to the last point, active wear is becoming more and more of a fashion trend and is not necessarily only being purchased for sports or designed for that very purpose. Thus, if you know for a fact that the customer doesn't intend on using the clothing for sports, you may have basis to exclude sales tax. However, you should have documentation to reference as such. This is referenced in Pennsylvania tax code 72 P.S. Section 7204.