Pennsylvania Sales Tax Filing Update May 2018
On April 1, 2018 Amazon automatic tax collection for FBA sellers in the state of Pennsylvania.
- Walmart began this collection effective February 1, 2019.
- eBay began this collection effective July 1, 2019.
Because of this, we have changed your TaxJar Pennsylvania Sales Tax Report to reflect Pennsylvania’s new format for reporting Marketplace Facilitator collected sales.
What has changed?
Sales that you make on Amazon, Etsy, Walmart or any other marketplaces that collect sales tax on your behalf are known as “Marketplace Sales” on your Pennsylvania sales tax filing.
The Pennsylvania sales tax filing requires that tax filers include ALL sales – marketplace sales and other sales - on Line 1 (“Total Gross Sales”) of your filing. You’ll find this amount under “Gross Sales” on your Pennsylvania Sales Tax Report in TaxJar.
But the Pennsylvania sales tax filing does not require you to enter your Marketplace Sales on Line 2, “Net Taxable Sales.” So, we have included your sales minus Marketplace Sales under “Sales Subject to State Tax” on your TaxJar Report for Pennsylvania.
- Even though this detail is not required for reporting the Marketplace collection sales, you can always view the actual tax Amazon collected on your Pennsylvania sales by visiting the Transactions tab in the navigation bar at the top your TaxJar account 's Dashboard and then filtering the state and "sales tax was collected."
Also, note that no credit or off-set for tax reported is necessary for your Marketplace Sales.
Why did we make this change?
We've compiled what we've learned so far about Amazon (as well as Etsy) collecting in Pennsylvania in this blog post and here's what you need to know in a nutshell:
- Amazon and Etsy are collecting and remitting the tax, but 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.
- Depending on your business' registration relationship with the state of PA to-date, it's been recommended that some sellers remain registered in Pennsylvania.
- If you remain registered for a sales tax license in Pennsylvania, you will still be required to file a Pennsylvania sales tax return by your assigned due date.
- When you file, you'll report the amount Amazon or other marketplaces (such as Etsy) collected on your behalf as “non-taxable income" on the return form.
- If you have nexus in PA and sell on other channels in addition to Amazon or Etsy, then you’re still required to collect sales tax from Pennsylvania buyers on those channels.
- You'll report PA sales totals from carts other than Amazon and Etsy as taxable income when you file.
- TaxJar's AutoFile can handle the new method of Pennsylvania filing for you, if your business falls into the category that should remain registered and continue filing returns.
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!
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.