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Pennsylvania Click Through Nexus Legislation


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Since September 1, 2012, the Pennsylvania Department of Revenue has required remote sellers with nexus in the state to collect and remit Pennsylvania sales tax. At the time, state lawmakers considered legislation that "would have established a click-through nexus standard," but did not pass it. The Department of Revenue took action anyway (see sales and use tax bulletin 2011-11), basing their new policy on the Tax Reform Code of 1971 (TRC) and "asserting that this policy change is merely a matter of enforcing current state and federal law and Supreme Court decisions." (PwC).

Pennsylvania lawmakers are now considering legislation that would amend the Tax Reform Code of 1971. HB 1043, a bill that would close the "Amazon Loophole," was introduced to the General Assembly of Pennsylvania earlier this month.

HB 1043 reads:

  • "A person shall be presumed to be 'maintaining a place of business in this Commonwealth' if an affiliated person is subject to sales and use tax jurisdiction of this Commonwealth …"; and
  • "A person making sales of tangible personal property or services for taxable use in this Commonwealth that is not required by law to collect tax shall provide notification on its retail Internet website, retail catalog, telemarketing script or other similar marketing tool and on its invoices and receipts provided to its customers, stating that tax must be paid by the purchaser, unless otherwise exempt or not subject to tax, on the use of the tangible personal property or services in this Commonwealth."

Snapshot

The bill dictates how the notification shall read. It boils down to this: if the retailer doesn't collect sales tax on a purchase, the purchaser has to pay use tax. Furthermore, "Failure to pay this tax on applicable purchases is a violation of State law and could result in fines, penalties and interest for each purchase."

The bill is being reviewed by the House Committee on Finance.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.