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PA Sales, Use & Hotel Occupancy Tax Expansion, Act 84 of 2016

ATTENTION — PENNSYLVANIA BUSINESSES AND SALES TAX PAYERS

PA Sales, Use & Hotel Occupancy Tax Expansion, Act 84 of 2016

According to Pennsylvania’s recently enacted legislation (Act 84 of 2016) the Commonwealth’s 6% Sales and Use tax (8% in Philadelphia) is now applied to the purchase of digital products delivered to a Pennsylvania based customer electronically, digitally, streaming or through any other electronic means.

Effective August 1, 2016, Pennsylvania Sales License holders are now required to withhold this tax on all sales of these digital products, including but not limited to; music, or any other audio (ex: Spotify), video such as movies and streaming services (ex: Netflix), e-books and any otherwise taxable printed matter, apps and in-app purchases, ringtones, online games, and canned software, as well as any updates, maintenance or support of these items; regardless of whether access and purchased singly, or by subscription.

The Pennsylvania Department of Revenue explains that these items are taxable if the purchaser resides in Pennsylvania (determined by the customer’s billing address on file with the seller) and businesses with operations in PA are responsible for collecting and remitting this tax to the department.  Important: These taxable sales must be reported when filing PA state sales tax returns with the date of the sale deemed to be the date of the invoice or other similar document.

Unsure if this impacts your business? Please contact us for further information.

 

August 8, 2016