Harrisburg, PA — The Department of Revenue is making it easier for people and businesses selling products online to collect and remit Pennsylvania sales tax.
The department is working with Certified Service Providers (CSPs) — companies that allow out-of-state online sellers to outsource most of their sales tax collection responsibilities. CSPs will file tax returns and also collect and forward tax payments to the Department of Revenue on behalf of their clients.
The software that CSPs offer can also help an online seller determine which items they are selling are subject to Pennsylvania sales tax. Under the CSPs’ arrangement with the Department of Revenue, CSPs will offer their services for free or at a reduced cost to online sellers with no physical presence in Pennsylvania.
“There have been significant changes to federal and state laws in recent years that have drastically changed the sales tax obligations for those who are selling products over the Internet,” Revenue Secretary Dan Hassell said. “Because of these changes in the law, we have developed a solution that will make it easier for out-of-state sellers and Pennsylvania purchasers to meet their sales tax obligations. We want to do everything that we can to provide taxpayers with the tools they need to follow the law.”
The department has launched a new web page that provides an overview of the services offered by CSPs. The four CSPs the department is working with are:
- AccurateTax (https://www.accuratetax.comOpens In A New Window)
- Avalara (https://www.avalara.comOpens In A New Window)
- Sovos (https://sovos.comOpens In A New Window)
- TaxCloud (https://TaxCloud.comOpens In A New Window)
The department started working on this initiative after the U.S. Supreme Court in June 2018 issued an opinion in South Dakota v. Wayfair. The opinion overturned the court’s previous ruling in Quill Corp. v. North Dakota, which required a business to have a physical presence in a state in order for the business to be required to collect that state’s sales tax.
Read in conjunction with Pennsylvania’s Tax Reform Code, the Supreme Court’s decision in the Wayfair case requires out-of-state sellers making $100,000 or more in annual gross sales to Pennsylvania customers to collect and remit Pennsylvania sales tax. This was the threshold suggested in the Wayfair case. This requirement will take effect in Pennsylvania on July 1, 2019.
“The Supreme Court made it clear in its decision that tax administrators should not make it overly difficult for out-of-state sellers to comply with the law,” Hassell said. “The work the department is doing with Certified Service Providers will remove many of the obstacles for Internet sellers who will soon be required to collect Pennsylvania sales tax.”