Pennsylvania Sales Tax Guide
Chapter 5: Filing and paying Pennsylvania sales tax
You're registered with the Pennsylvania Department of Revenue and you've begun collecting sales tax. Congratulations! Remember, those tax dollars don't belong to you. As an agent of the state of Pennsylvania, your role is that of intermediary transferring tax dollars from consumers to state and local tax authorities. Let's take a deeper look at how filing Pennsylvania sales tax returns impacts your business.What does it mean to file an Pennsylvania sales tax return?
Technically speaking, filing Pennsylvania sales tax returns is a two-step process comprised of submitting the required sales data and remitting the collected tax dollars (if any) to state and local tax authorities.
In most states, there are a number of options for submitting sales tax data to the state. Business owners may complete a Pennsylvania sales tax filing form and mail it to the Pennsylvania Department of Revenue or they can file electronically online. In all states, filing online is recommended.
The filing process forces the business owner to detail their total sales, the amount of sales tax they have collected, and from where. The Pennsylvania Department of Revenue wants to be kept up to date on your business growth (or lack thereof) to make sure they are getting the tax dollars due. By completing ongoing filing of monthly, quarterly, or semi-annual, or annual Pennsylvania sales tax returns, they stay abreast of your growing company.When am I required to file my sales tax return?
The Pennsylvania Department of Revenue will assign you a filing frequency. Typically, this is determined by the size of your business. State governments typically ask larger businesses to file more frequently. Visit our Pennsylvania filing due dates page for more information.Am I required to file and pay my Pennsylvania sales tax at the same time?
Pennsylvania sales tax returns must be filed and paid at the same time and are governed by the same due date.I want to webfile my Pennsylvania sales tax. What are my options?
Avalara has built the TrustFile product to allow business owners a quick and easy way to prepare and webfile Pennsylvania sales tax returns. Users can sign up and use the service to prepare Pennsylvania returns free for 30-days.
Filers may also file directly with the Pennsylvania Department of Revenue by visiting their site and entering your transaction data manually. This is a free service, but preparing Pennsylvania sales tax (breaking it down by jurisdiction) can be time consuming - especially for larger sellers.Can a 3rd party file my sales tax on my behalf?
Yes! Many business owners recognize they are not a tax professional and therefore, choose to outsource their sales tax sales and use tax filing to services like Avalara TrustFile or to an accountant or bookkeeper. This is a normal business practice that can save business owners time and help them avoid costly mistakes due to inexperience and a lack of deep knowledge about Pennsylvania sales tax code.What happens if I file or pay my sales tax return late?
The Pennsylvania Department of Revenue levies unique penalties for each specific type of sales tax that is filed late. However, interest charges are the same for all tax types.
The penalty for past due payment of Pennsylvania sales tax is 5 percent per month from the date due until the date the outstanding balance is paid. The penalty is capped at a maximum of 25 percent. If some cases, it may be determined that an underpayment penalty is warranted. In such instances, the penalty is imposed at a rate of 3 percent a month on the unpaid tax balance from the date filed to the date paid to a maximum of 18 percent.
The interest rate for any given year is established by the U.S. Treasury Secretary and is effective on January 1st of each year. The per diem rate is arrived at by dividing the announced interest rate by 365 (representing the number of days in a year) and the result becomes the per diem rate.Do I need to file a return if I didn't collect any sales tax in Pennsylvania?
Yes! Once you've successfully registered for and been issued a Sales Tax Permit, you are required to file at the completion of each assigned collection period regardless of whether any sales tax was collected. This is what is known as a "zero-tax filing".
Failure to submit a required zero-tax filing can result in penalties imposed on your business by the Pennsylvania Department of Revenue so don't take this responsibility lightly.If I close my business, do I need to file a final sales tax return?
Yes! The Pennsylvania Department of Revenue requires all businesses to "close their books" by filing a final sales tax return. This also holds true for business owners selling or otherwise transferring ownership of their business.Does the Pennsylvania Department of Revenue offer a discount for filing on time?
Vendor discounts are rebates offered to tax filers by state tax jurisdictions to compensate filers for the effort involved with collecting, filing, and remitting sales tax in a timely manner. Such discounts are frequently cited as outdated by those who see them as a tax loophole for big businesses. With online buying and SaaS services like Avalara TrustFile, the days of managing receipts, balancing books, and writing checks to the state have long since been replaced by computer automation.
The Pennsylvania Department of Revenue currently offers a vendor discount (also known as a dealer collection allowance) of 1% with a maximum of no maximum and a minimum of no minimum.