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Pennsylvania Delays Implementation of Affiliate Law


On December 1, 2011, Pennsylvania issued Sales and Use Tax Bulletin 2011-01 regarding remote seller nexus. The bulletin gave online retailers who used affiliates or had sales people, subsidiaries or some form of nexus as defined by the state, until February 1, 2012 to register and begin collecting and remitting sales tax on purchases made by Pennsylvania residents.

In a recent press release, Revenue Secretary Dan Meuser stated, “We heard from a number of e-commerce businesses that companies are willing to comply with their Pennsylvania sales tax obligations, but our original Feb. 1 compliance deadline is impractical from operational and technical standpoints.” So the state is extending the implementation date to September 1, 2012. If “[b]usinesses with Pennsylvania nexus…do not become registered and begin collecting Pennsylvania sales tax by Sept. 1 [they] will face a variety of escalating enforcement options over time, including assessment, audit, lien or referral to a collection agency or the Office of Attorney General.”

The December bulletin clarified that the department had “…authority to require e-commerce and other out-of-state sellers with physical presence in Pennsylvania to collect sales tax.” Examples of nexus include “[e]ngaging in any activity…through a subsidiary, representative or an agent….” For further clarification, the bulletin states, “…it does not matter whether the representatives are regular employees of the company, or are independent contractors hired by the company.”

The Pennsylvania Department of Revenue invites “[r]emote sellers and any other vendors who have nexus with Pennsylvania...who are not currently registered to collect and remit Pennsylvania sales tax," to contact the Department about collection obligations and registration.

For further clarification on nexus in Pennsylvania, read Sales and Use Tax Bulletin 2011-01.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”