Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
Amazon will collect and remit sales tax on third-party sales into Pennsylvania beginning April 1, the company recently announced.
It becomes only the second state where Amazon collects and remits sales tax on behalf of third-party vendors.
The change comes after a novel tweak that Pennsylvania made to its sales tax laws last year, which only three other states have done. Online marketplace platforms such as Amazon.com Inc. and Etsy Inc. must either collect and remit Pennsylvania’s 6 percent sales tax on sales on behalf of their third-party vendors or comply with new notice and reporting requirements.
Through a new service called Marketplace Tax Collection, Amazon said it would automatically “calculate, collect, and remit” sales tax for third-party merchants selling products to customers in marketplace provider states, beginning with Washington state, where it is headquartered. The announcement came in November 2017 through an Amazon sellers’ forum.
The Pennsylvania news was communicated to sellers through the company’s Seller Central portal, Amazon spokeswoman Jill Shatzen Kerr told Bloomberg Tax in an email March 5.
Pennsylvania was among the first states to enact marketplace-provider regimes in 2017—the others were Minnesota, Washington, and Rhode Island.
Pennsylvania’s new law was enacted last year as part of a revenue package to fund the state’s budget. Act 43 of 2017 requires, in part, that remote sellers, online marketplace facilitators, and “referrers” must either collect sales tax or comply with notice and reporting requirements. The new obligations apply to remote vendors or online platforms with sales of $10,000 or more in the previous calendar year.
Companies impacted by the new rules had until March 1 to elect to collect and remit Pennsylvania’s 6 percent sales tax beginning April 1 or comply with reporting and notification requirements, according to online guidance from the Pennsylvania Department of Revenue.
The Pennsylvania Department of Revenue has estimated that the marketplace requirements will generate $8.2 million in FY 2017-18 and $50.5 million in FY 2018-19.
Some state tax practitioners have said the future of marketplace-provider laws requiring Amazon-type platforms to collect tax on third-party sales hinges on a pivotal U.S. Supreme Court case.
Liz Malm, director of strategic government relations and economist at the consulting firm MultiState Associates Inc., previously told Bloomberg Tax that marketplace-provider legislation could spike once the U.S. Supreme Court reaches a decision in South Dakota v. Wayfair. The high court is revisiting its 1992 precedent in Quill Corp. v. North Dakota, which prohibits states from imposing tax collection obligations on vendors without a physical presence in-state. Oral arguments in the case are set for April 17, and a decision is expected by late June.
Assuming the high court sides with South Dakota, Malm said she would expect marketplace-provider legislation to “be the biggest trend of 2019.”
This year, New York and Hawaii have introduced legislation containing marketplace provider provisions. New Mexico also considered similar proposals, but the bills died in session.
With assistance from Michael J. Bologna in Chicago and Ryan Prete in Washington
To contact the reporter on this story: Leslie A. Pappas in Philadelphia at email@example.com
To contact the editor responsible for this story: Ryan C. Tuck at firstname.lastname@example.org
Copyright © 2018 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)