Pennsylvania, as all states do, struggles to collect taxes due from all sources. This is especially true with respect to sales and use taxes due on goods purchased out of state and used predominantly in the Commonwealth. In an attempt to capture this income, the state legislature is adding new requirements for out-of state-vendors.
Legislation recently passed by the Pennsylvania House of Representatives would require certain out-of-state sellers to notify purchasers in Pennsylvania that sales or use tax is due on their nonexempt purchases and that the tax must be paid on the purchaser’s tax return. The notice requirement would apply to remote sellers (vendors located outside Pennsylvania) that sell tangible personal property or services that are not exempt from Pennsylvania sales and use tax to an in-state purchaser, and do not collect the tax.
In addition, on or before January 31 of each year, remote sellers would be required to send a notice to each purchaser in Pennsylvania who made purchases of $500 or more from the seller in the previous calendar year. This notice would have to include the following information:
- total amount paid by the purchaser for purchases made from the remote seller in the previous calendar year;
- a statement that Pennsylvania requires a sales or use tax return to be filed and sales or use tax to be paid on nonexempt purchases that the purchaser makes from the remote seller; and
- other information required by the Department of Revenue. H.B 542, as passed by the Pennsylvania House of Representatives on May 9, 2017.
This bill will have broad and far-reaching ramifications for compliance for both the vendor and the Pennsylvania taxpayer purchasing the taxable goods. Please contact Bob Grossman or Shawn Firster at 412-338-9300 if you have questions.