Note important changes introduced by Sales and Use Tax Bulletin 2019-01. Effective July 1, 2019, remote sellers who have no physical presence but whose direct sales in Pennsylvania exceed $100,000, no longer have the option for notice and reporting requirements described below. They must register to collect and remit Pennsylvania sales tax.
A remote seller is a seller that does not maintain a place of business in Pennsylvania and makes sales directly to individual and business customers in Pennsylvania.
A remote seller that makes taxable sales totaling $10,000 or more to Pennsylvania customers in the previous calendar year must elect one of two options:
Option 1 - Register to collect and remit Pennsylvania sales tax.
Option 2 - Comply with Pennsylvania’s notice and reporting requirements.
An election must be made on or before June 1st of each calendar year.
The remote seller must complete REV-1830 (Annual Marketplace Sales Election Form) to make the election.
An election to comply with the notice and reporting requirement 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 of Revenue as an election to comply with the notice and reporting requirements.
Option 1 - Sales Tax Registration
If a remote seller elects to collect and remit sales tax, then 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.
Option 2 - Notice and Reporting Requirements
If a remote seller elects to comply with the notice and reporting requirements, it must take the following actions:
- Post a notice on the sales 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.
- 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 remote seller, unless the transaction is exempt from sales and use tax, pursuant to Article II of the Tax Reform Code or other applicable Commonwealth law.
- Provide an annual report to the purchaser that states:
A remote seller 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 remote seller] 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 remoter seller, and delivered to a location within this Commonwealth.
Please visit this link to learn more about your use tax obligations under Pennsylvania law.
[Name of remote seller] is required to submit an annual report to the Department of Revenue that includes the name of the purchaser and total dollar amount of the purchases from this remote seller.
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.
- Provide an annual report to the Pennsylvania Department of Revenue
A remote seller making an election to comply with the notice and reporting requirements must submit an annual report by January 31 of each year to the 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 remote seller.
Instructions for filing these reports with the department are provided under Technical Information.
A report required under this section shall be submitted by an officer of the remote seller and shall include a statement made under penalty of perjury by the officer that the remote seller 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.