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Marketplace Facilitators

A marketplace facilitator facilitates the sale of goods and services by:

  1. Advertising goods and services for sale in a physical or electronic forum.
  2. Collecting payment from the purchaser on behalf of the seller either directly or indirectly.
  3. Remitting payment back to the seller.

If you are a marketplace facilitator, you must provide notice to the marketplace sellers using your forum that states whether you elected to collect and remit Pennsylvania sales tax on their behalf, and on what date, or instead elected to comply with Pennsylvania’s notice and reporting requirements. The notice should be provided no later than the time of election.

Sales Tax Collection by Marketplace Facilitators that Maintain a Place of Business in the Commonwealth of Pennsylvania

A marketplace facilitator that maintains a place of business in Pennsylvania is required to:

  • Collect and remit sales tax on its own taxable sales; and
  • Collect and remit sales tax on the taxable sales made through its forum by any marketplace seller using the forum.

Mandatory Election by Marketplace Facilitators that do not Maintain a Place of Business in the Commonwealth of Pennsylvania

A marketplace facilitator that does not maintain a place of business in Pennsylvania and makes or facilitates taxable sales to Pennsylvania customers totaling $10,000 or more in the previous calendar year must elect one of two options by March 1, 2018:

Option 1 - Register to collect and remit Pennsylvania sales tax.

Option 2 - Comply with Pennsylvania’s notice and reporting requirements.

An election made on or before March 1, 2018 will be in effect through June 30, 2019.

The marketplace facilitator must complete REV-1830 (Annual Marketplace Sales Election Form) to make the election.

An election to comply with the notice and reporting requirements may be changed at any time to an election to collect and remit sales tax.

Failure to file an election will be treated by the Department as an election to comply with the notice and reporting requirements.

Option 1 - Sales Tax Registration

This option requires marketplace facilitators to:

  • Collect and remit sales tax on its own taxable sales; and
  • Collect and remit sales tax on the taxable sales made through its forum by any marketplace sellers using the forum.

Collections are to begin April 1, 2018 for the current election cycle.

If a marketplace facilitator elects to collect and remit sales tax, it is required to register for a sales tax license. A sales tax license can be obtained at this web address: https://www.pa100.state.pa.us/Registration.htm. Sales tax collected by a marketplace facilitator must be remitted directly to the Department. The marketplace facilitator may not give the collected sales tax to its marketplace sellers.

Option 2 – Notice and Reporting Requirements

If a marketplace facilitator elects to comply with the notice and reporting requirements, it must take the following actions starting April 1, 2018:

  1. Post a notice on its forum that states:

Pennsylvania sales or use tax may be due in connection with the purchase and delivery of tangible personal property to Pennsylvania individuals and businesses.

The purchaser is required to file a use tax return if tax is due in connection with the purchase and delivery in the Commonwealth.

This notice is required pursuant to the provisions of the Tax Reform Code of 1971. 72 P.S. § 7213.2.

  1. Provide a written notice on all invoices, order forms, sales receipts or similar documents, whether in paper or electronic form, to each purchaser at the time of each sale that states:

Pennsylvania sales tax was not collected on this sale. Therefore, you may be required to remit use tax directly to the Commonwealth on your purchase if the items are subject to Pennsylvania sales tax. Please visit this link to learn more about your use tax obligations under Pennsylvania law.

No statement that sales or use tax is not imposed on a transaction may be made by a marketplace facilitator, unless the transaction is exempt from sales and use tax, pursuant to Article II of the Tax Reform Code or other applicable Commonwealth law.

  1. Provide an annual report to the purchaser that states:

A marketplace facilitator making an election to comply with the notice and reporting requirements must submit an annual report by January 31 of each year to the purchaser that includes the following.

[Name of marketplace facilitator] did not collect sales tax in connection with your transactions. You may be required to remit use tax to the Pennsylvania Department of Revenue. Following is a list by date, type and purchase price of each product purchased or leased by the purchaser from this marketplace facilitator, and delivered to a location within Pennsylvania.

[Insert list]

Please visit this link to learn more about your use tax obligations under Pennsylvania law.

[Name of marketplace facilitator] is required to submit an annual report to the Pennsylvania Department of Revenue that includes the name of the purchaser and total dollar amount of the purchases from this marketplace facilitator.

This report shall be mailed by first class mail, in an envelope prominently marked with words indicating that important tax information is enclosed, to the purchaser’s billing address, if known, or if unknown, to the purchaser’s shipping address. If the purchaser’s billing and shipping address are unknown, the report shall be sent electronically to the purchaser’s last known email address with a subject heading indicating that important tax information is being provided.

  1. Provide an annual report to the Pennsylvania Department of Revenue

A marketplace facilitator making an election to comply with the notice and reporting requirements must submit an annual report by January 31 of each year to the Pennsylvania Department of Revenue that includes the following:

  • The purchaser’s name, billing address, delivery address and, if different, the purchaser’s last known mailing address.
  • The total dollar amount of purchases from this marketplace facilitator.
  • The name and address of the marketplace facilitator that made the sale.

A report required under this section shall be submitted by an officer of the marketplace facilitator and shall include a statement made under penalty of perjury by the officer that the marketplace facilitator made reasonable efforts to comply with the notice and reporting requirements of this part.

Each failure to comply with the notice and reporting requirements can result in a penalty of $20,000 per violation, per year, or 20 percent of total Pennsylvania sales during the previous 12 months, whichever is less.