Pennsylvania’s Economic Nexus Provision for Sales and Use Tax

On January 8, 2019, the Pennsylvania Department of Revenue issued Sales and Use Tax Bulletin 2019-01, clarifying how the Department will apply economic nexus standards for sales and use tax based on the United States Supreme Court’s opinion in South Dakota v. Wayfair issued last June.  The new provisions are effective July 1, 2019.

The Department has indicated that it will use an economic nexus threshold of $100,000 in sales to Pennsylvania residents during the previous 12 months.  The legal basis cited for this by the Department is 72 P.S. §§ 7202, 7208.

The Code defines “maintaining a place of business in this Commonwealth to include having any contact with this Commonwealth which would allow the Commonwealth to require a person to collect and remit tax under the Constitution of the United States.

The bulletin discusses how Pennsylvania law complies with the simplification features identified in the Wayfair opinion.  The Department also indicated that it will certify service providers that will offer software and perform services that, when relied upon by a vendor to determine whether or not the sale of a particular product or provision of a particular service is subject to sales tax, will relieve the vendor of liability upon audit. 

The new economic nexus rules do not replace or provide an alternative to the provisions of Act 43 regarding remote vendor use tax reporting or registration requirements.  Remote sellers who chose the use tax reporting option under Act 43 must register with the Department and begin collecting tax once they meet one of the two referenced thresholds during the previous 12- month period.

Any questions regarding Pennsylvania’s new economic thresholds and sales tax registration should be directed to your state and local tax professional.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2022 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
What is the FICA Tip Credit and How Can Employers Take Advantage of It?
Deferring Gain on Sale of Vacation Property
Some Things You Probably Aren’t Thinking About as a Dealer When It Comes to the Rise in Interest Rates
Can Solar Power Assist with the Infrastructure Needed to Charge EVs?
Retail, Tax BY Kristyn Stang
Don’t Overlook the Work Opportunity Tax Credit (WOTC)
Accelerating Charitable Efforts Act Under Consideration
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×