News & Publications
Pennsylvania – New Economic Nexus Requirements
By March 1, 2018, parties identified and defined as remote sellers, marketplace facilitators, and referrers, with sales of $10,000 or more in the previous 12 month period, will be required to either collect and remit Pennsylvania sales and use tax, or comply with notice and reporting requirements based on recently enacted Pennsylvania legislation.
For those electing not to collect sales and use tax, but who instead elect to comply with notice and reporting requirements, various steps will be required to ensure compliance. These steps include posting or providing written notice to Pennsylvania purchasers that sales or use tax may be due on a purchase. Requirements also involve notifying purchasers that sales tax may or may not be collected at the time of purchase, and a state use tax return is required to be filed by the purchaser if tax is applicable and is not collected at the time of purchase. Instructions to show purchasers how additional information can be obtained is also required. In addition, certain details regarding indicated purchasers must also be reported to the Pennsylvania Department of Revenue. Detailed reports are to be filed annually including purchaser’s names, addresses and purchase amounts.
Remote sellers include those with no physical location in Pennsylvania, and which makes retail sales of tangible personal property via a forum. Marketplace facilitators refer to those who facilitate retail sales of tangible personal property by listing or advertising in a forum and who directly or indirectly collect payment from the purchaser passing it along to the seller via agreements with third parties. Referrers include persons who through an arrangement with a marketplace seller or remote seller, advertise products, receive consideration, and are involved in the transfer of a purchase.
Non-compliance penalties of $20,000 or 20% (whichever is less) for the prior 12 months of sales for those electing to comply with the notice and reporting requirements but failing to meet those requirements are applicable.
For more information on how this legislation may impact your organization please contact us at tax@allynintl.com.
Contributor: Sabrina Miller
Tips for the Taxpayer
Stay up-to-date with new state tax legislation by reading industry newsletters and visiting state websites for upcoming changes. Focus on states where your organization operates or may expand and be aware of changes which may require action to ensure compliance.
For More Information
If you are interested in learning more about this topic or other tax topics, please visit our Tax Publications under News and Publications at www.allynintl.com.
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