Recently, Pennsylvania adopted an economic nexus standard with respect to determining whether an out-of-state entity is required to register for a license and subsequently collect, report and remit Pennsylvania Sales Tax.
The Commonwealth measures its sales and use tax economic nexus threshold by calendar-year sales preceding the collection period. Additionally, after the first year, collection begins in the second quarter, allowing taxpayers time to compile their calendar year sales. Registration and collection begin on July 1, 2019.
Examples of the collection measurement periods are listed below:
- July 1, 2019 – March 31, 2020 – for this collection period, taxpayers should use calendar year 2018 sales to determine nexus.
- April 1, 2020 – March 31, 2021 – for this collection period, taxpayers should use calendar year 2019 sales to determine nexus.
- Subsequent Years – collection periods in subsequent years will follow the same pattern as the April 1, 2020 – March 31, 2021 collection period.