Insights

As previously reported, in June 2011, the Commonwealth of Pennsylvania implemented changes requiring businesses reporting sales tax of $25,000 or more in the third quarter of the preceding year to remit monthly prepayments of tax due by the 20th of each month. According to the most recently enacted legislation (Act 26, of 2011), the prepayment was to be at least 50% of the sales and use tax liability from the same month in the previous year.

A bill is to be introduced in the near term that proposes allowing businesses two options to calculate the sales tax prepayment amount. A business could either 1) continue to make prepayments equal to 50% of the sales and use tax liability from the same month in the previous year or 2) calculate the sales and use tax actually collected on sales made from the 1st to the 15th of the current month and pay that amount. In either case, the prepayment amount would still be due on the 20th of the month with the payment required for the remainder of the preceding month’s tax.

Oddly enough, the proposed change would allow for the prepayments to be calculated as previously intended by Act 48 of 2009, which enacted a prepayment requirement in the first place.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.

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