Pennsylvania's tax requirements for online sales will change this summer as a result of a U.S. Supreme Court decision.
In 2017, the Pennsylvania Marketplace Sales Act took effect, requiring remote sellers with $10,000 or more in Pennsylvania sales during the year to either collect and remit sales tax to the state or to comply with notice and reporting requirements. Starting on July 1 this year, new provisions require all remote businesses with a “nexus” in Pennsylvania to collect and remit sales tax to the state.
Following the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., “nexus” is now defined as “economic activity” generating more than $100,000 worth of product (or 200 transactions) into the commonwealth. All remote businesses crossing this online threshold must collect and pay sales tax — and file returns in Pennsylvania.
Starting this summer, both the Marketplace Sales Act and the Wayfair requirements are effective and must be read together. For example, remote sellers with less than $100,000 (or 200 transactions) in Pennsylvania sales still must comply with the Marketplace Sales Act if their sales are greater than $10,000. All businesses with an economic nexus under the new provisions—even those that were subject to the Marketplace Sales act previously—must instead register and collect sales taxes on all sales into the state.
To ensure that your business is in compliance with the new internet sales tax rules, NFIB recommends speaking with legal counsel and/or a trusted CPA about how best to comply with those obligations, with minimum administrative burdens.