Last year the Pennsylvania legislature enacted House Bill 542 which changed Pennsylvania state sales tax law requirements for out-of-state vendors selling into the Commonwealth.

The bill revised categories of services and merchandise subject to sales and use tax, imposing sales tax on the legalized sale of retail fireworks and fees on carsharing.  The bill also exempted beer kegs and call-center support for digital products from sales tax.

Of interest to out-of-state vendors who do not maintain a presence in Pennsylvania, the law imposes a new, but optional, requirement to collect sales tax on sales of tangible personal property delivered to Pennsylvania if the vendor sells at least $10,000 in Pennsylvania annually.  This new requirement began March 1, 2018.

The requirement is optional because if an out-of-state vendor does not elect to remit sales tax, then the vendor is deemed to have elected to comply with new notice requirements.  The new notice requirements include posting a conspicuous notice on the vendor’s website and other materials which informs purchasers that:

  • sales or use tax may be due on the purchase,
  • the Commonwealth may require a use tax return in connection with the purchase, and
  • the notice is required under the notice provisions of the new law.

In addition, the vendor must provide written notice at the time of each retail sale, including on each invoice and order form, that includes:

  • a statement that sales tax is not being collected
  • a statement that a use tax return may be required
  • instructions on obtaining additional information from the department regarding whether and how to remit a use tax return.

For more information on these new requirements and to ensure your business remains compliant, please contact Matt Rak or another member of the Tax, Trusts & Estates Group.

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