In its most recent newsletter, the Pennsylvania Department of Revenue announced the creation of a new unit within the Department for the purpose of conducting remote examinations of sales and use tax returns. The new unit will target taxpayers for underreporting and non-payment of sales and use tax. In addition, the unit will focus on identifying non-filers and taxpayers not registered with the Department. The Department will utilize information from non-traditional sources, including other state agencies, to identify taxpayers that may not be compliant with their sales and use tax obligations. The use of data and information from other sources by state tax departments to identify potential tax liabilities and taxpayers has been steadily increasing in recent years. The Department’s establishment of this special group to focus on the issue is further evidence of the trend toward the use of technology and sophistication to increase tax revenue.
The Department will contact businesses if they identify a difference or issue related to their sales and use tax compliance. For unregistered taxpayers, the Department will send a nexus questionnaire. Taxpayers should address any notice received from the Department in a timely manner, but make certain to consult with your tax professional before providing any questionnaire response to the Department.