Pennsylvania Targets Residents and Merchants for Sales Tax Revenue
By Ina Steiner
Pennsylvania's Department of Revenue issued a Tax Bulletin on Thursday as part of what it called an effort to explain existing sales tax nexus law for remote sellers and to clarify its authority to require ecommerce and other out-of-state sellers with physical presence in Pennsylvania to collect sales tax.
The department also said it would begin allowing individuals to self-report use tax on the Pennsylvania personal income tax return beginning in January 2012.
In the agency's press statement, Revenue Secretary Dan Meuser said, "Our goal with regard to e-commerce and remote sellers is two-fold. On one hand, we're clarifying nexus and informing retailers with nexus they should begin collecting sales tax. On the other hand we're providing a clear and simple reporting mechanism for individuals to report and pay use tax annually, when sales tax wasn't paid. The department's uniform collection and enforcement of sales and use tax is key to fostering fair competition among e-commerce and brick-and-mortar businesses."
An editorial in the LehighValleyLive criticized the timing of the state's action - "If the bureaucrats in Harrisburg really intend to go after millions of tax cheats next April, the time to start airing public service announcements was 11 months ago," and wrote, "Americans don't take kindly to tax laws that include a presumption of voluntary compliance."
The state warned companies selling in Pennsylvania that if their business activities establish nexus in the state, they must become licensed to collect sales tax as soon as possible, but no later than by Feb. 1, 2012 and begin collecting sales tax. Otherwise the state will pursue a variety of escalating enforcement options over time, including audit, assessment, lien and/or referral of the case to a collection agency or the Office of Attorney General.
It warned, "In cases where companies with nexus blatantly disregard the Tax Bulletin and their obligations to begin collecting sales tax, the department has the statutory authority to look back at least three years for audit and assessment purposes."
Some states are calling for federal legislation, and on Wednesday, eBay, Amazon and Overstock squared off before a Congressional hearing on the matter.
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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