Sales and Use Tax: Pennsylvania Adopts Economic Nexus
In response to the U.S. Supreme Court’s Wayfair decision, effective July 1, 2019, taxpayers that exceed the PA sales threshold of $100,000 must:
– Register for a license
– Collect, report, and remit sales tax
Marketplace Facilitator: A marketplace facilitator facilitates the sales of goods and services by advertising goods and services for sale in a physical or electronic forum, collecting payment from the purchases on behalf of the seller either directly or indirectly, and by remitting payment back to the seller. A marketplace facilitator that has no physical presence in PA should determine whether it has exceeded the threshold by using BOTH facilitated sales and direct sales. If a marketplace facilitator meets the $100,000 economic nexus threshold, they must collect tax on all PA sales. This still applies if the sale is on behalf of a marketplace seller that does not have nexus with PA.
Marketplace Sellers: A marketplace seller has a contact with a marketplace facilitator in which the facilitator agrees to list or advertise the sellers’ goods and services, collect payment from customers and remits the payment back to the seller. A marketplace seller that has no physical presence in PA should determine whether it has exceeded the threshold by using ONLY its direct sales and sales made through a marketplace facilitator that does not collect sales tax on its behalf. The $100,000 nexus standard does NOT affect marketplace sellers that marketplace facilitators collect and remit the sales tax on their behalf.
The $100,000 economic nexus standard does not replace or provide an alternative to the existing election requirement and related provisions. The election and related provisions remain valid and apply to vendors who do not have a physical presence in PA OR meet PA $100,000 nexus threshold.
Please contact us with questions regarding the new PA Economic Nexus Standard.