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Business • January 14, 2019

Pennsylvania Online Sales Tax Update

Pennsylvania’s Department of Revenue has issued a sales and use tax bulletin. Remote sellers and online marketplaces with more than $100,000 in sales are required to register for a sales tax license and collect and remit taxes beginning July 1. 

According to Bloomberg Tax, sellers are pointing out that this bulletin has led to confusion. It places this new requirement while retaining Pennsylvania’s Act 43, which requires remote vendors and marketplace facilitators of $10,000 or more to either collect and remit or provide notice and report. 

The bulletin states that $100,000 is now the economic nexus threshold and that companies and marketplace facilitators with an economic nexus must comply with Act 43. This applies even if a marketplace facilitator is executing a sale on behalf of a seller that doesn’t individually have a nexus.

All of this has led to confusion and questions of legality because the threshold is lower than South Dakota’s, which was the legislation on which the U.S. Supreme Court based its decision in the case of South Dakota v. Wayfair that struck down the physical presence rule.

H.R. 379 Would Add Restrictions to Remote Sales Tax Collection

Congressman Bob Gibbs (R-OH) introduced the first online sales tax bill of the new Congress. The Protecting Businesses from Burdensome Compliance Cost Act of 2019 (H.R. 379), would require states enact legislation to create a uniform tax rate before they can collect sales tax from remote sellers. It also bans retroactive tax collection and prohibits states from tax collection before January 1, 2020.