Pennsylvania
In response to last summer’s SCOTUS decision in SD v. Wayfair the Pennsylvania (PA) Department of Revenue has issued guidance on the sales tax collection responsibilities of remote sellers and marketplace facilitators.
Pennsylvania requires any person maintaining a place of business in the state to collect sales tax. The definition of “maintaining a place of business” in the state includes having any contact with PA which under the U.S. Constitution would allow the state to impose a tax collection obligation on the seller. In the wake of Wayfair, the Department of Revenue provided guidance that having “substantial economic presence” in PA meets the definition of maintaining a place of business there.
In order to prevent discrimination and undue burden, the state will only require sellers exceeding the threshold below to collect sales tax:
- $100,000 of gross sales to PA purchasers in the previous 12 months.
The Department further clarifies that marketplace facilitators with no physical presence in PA should use both their own sales and third party sales conducted on their platform in the threshold calculation. Marketplace sellers with no physical presence in PA, on the other hand, should use only their direct sales and sales made through marketplaces that don’t collect tax on the seller’s behalf in the threshold calculation. The guidance discussed above is effective July 1st, 2019.
Additionally, the new guidance doesn’t replace or provide an alternative to the provisions of the 2017 Marketplace Sales Act, which requires remote sellers, marketplace facilitators, and referrers with PA sales of at least $10,000 in 12 months to make an election to either collect sales tax or comply with detailed notice and reporting requirements. That means that remote sellers and marketplace facilitators with annual sales between $10,000 and $99,999 may choose to either collect or provide notice and reporting; once the $100,000 threshold is reached collection is mandatory.
New York
The New York (NY) Department of Taxation and Finance also issued economic nexus guidance for remote sellers. The guidance provides that a business with no physical presence in NY that has exceeded both thresholds below must register and collect NY state and local sales taxes –
- $300,000 of tangible personal property sales AND 100 sales transactions in the immediately preceding 4 sales tax quarters.
As a note, New York sales tax quarters do not coincide with calendar quarters; instead, they run March through May, June through August, September through November, and December through February.
Disclaimer
This post is for general discussion purposes only and does not constitute tax or legal advice. If you need help with a sales tax issue please contact us so that we can assist you based on your specific facts, circumstances, and time periods involved. I am not an attorney and do not give legal advice. For legal questions please refer to an attorney specializing in sales tax matters.