Pennsylvania Sales Tax Filing Update May 2018: Marketplace Facilitator Laws
Pennsylvania passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective April 1, 2018.
Amazon and Etsy began collecting on April 1, 2018.
Walmart began collecting on February 1, 2019.
eBay began collecting on July 1, 2019.
In this article, we summarize Pennsylvania's state guidance on the following questions:
- Do I need to register for a sales tax license in Pennsylvania?
- Should I cancel my existing registration if all my sales are marketplace-collected?
- Do I need to collect sales tax on Pennsylvania sales on non-marketplace platforms?
- Do I still need to file returns in Pennsylvania?
- How do I file without paying double tax on the sales that were collected and remitted by my Marketplace?
I've never registered for a Pennsylvania license. Do I need to register for a sales tax license in Pennsylvania now?
If you are a retailer with a physical presence in Pennsylvania or you are a remote seller who has crossed the economic nexus threshold for Pennsylvania ($100,000/year in gross revenue in the previous 12 months), then you will need to register for a Pennsylvania sales tax license.
- However, if you have never registered for a sales tax license in Pennsylvania and your only sales in Pennsylvania are through a Marketplace and your Marketplace Facilitator collects and remits sales tax on your behalf in this state, you will NOT need to register for a Pennsylvania sales tax license pursuant to a new amendment passed in June 2019.
Generally, please note that according to the Pennsylvania Department of Revenue, online sellers who meet any of Pennsylvania’s sales tax nexus requirements still have nexus in the state.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
- If you do not meet any of the criteria that creates nexus in Pennsylvania (physical, economic or otherwise), you won't need to register for a sales tax license in this state.
I have already registered for a license in Pennsylvania and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
- Online sellers who meet any of Pennsylvania’s sales tax nexus requirements still have nexus in the state.
- Whether you should cancel your Pennsylvania sales tax permit, this depends entirely on your business scenario. Therefore, depending on your business' registration relationship with the state of PA to-date, it's been recommended that some sellers remain registered in Pennsylvania.
- Though we can't provide specific advice to tell you what you should do for your business with the State of Pennsylvania, one of our CPA partners shared how his firm is advising their clients based on their particular business scenario and we've outlined his guidance in this blog post to help you make a decision for your particular scenario.
- You would need to contact the state directly to determine if you are able to cancel your existing license. We also have a list of vetted CPAs and sales tax consultants who have worked with our customers here who may be able to provide more detailed assistance if you need additional advice.
Do I need to collect taxes on my Pennsylvania sales on other platforms?
Yes--if you have nexus in the state (physical or economic) and you make sales to customers in Pennsylvania on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the Pennsylvania orders that are processed on the other platforms.
Do I still need to file returns in Pennsylvania?
Yes--once you register for a license, you will be required to file a return based on the frequency the state has assigned you.
- If you've previously registered, the state expects you to remain registered and continue to file returns (even if you are filing a $0 return).
I still need to file returns in Pennsylvania. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
The Pennsylvania sales tax filing requires that ALL sales (marketplace sales and non-marketplace sales) be entered on Line 1 (“Total Gross Sales”) of your return.
- You’ll find this amount under “Gross Sales” on your Pennsylvania Sales Tax Report in TaxJar.
- On Line 2, "Net Taxable Sales" please enter the amount for all non-marketplace sales* - you would not include your Marketplace Sales here.
- We provide your non-marketplace sales minus Marketplace Sales under “Sales Subject to State Tax” on your TaxJar Report for Pennsylvania.
- Please note that no credit or off-set for tax reported is necessary for your Marketplace Sales.
*If all of your sales are Marketplace sales, once you deduct the marketplace sales, you will need to file a $0 return.
- If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
- If you're enrolled in AutoFile for Pennsylvania, our system will handle the Marketplace sales deduction process automatically.