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PHILADELPHIA—The Pennsylvania Department of Revenue extended by seven months, until Sept. 1, the deadline for online businesses and other remote sellers with a physical presence in Pennsylvania to begin collecting state sales tax. [Pa. Dept. of Rev., News Release, 1/27/12]
The department said a number of e-commerce retailers complained of operational and technical hurdles to meeting the original Feb. 1 compliance deadline for companies to become licensed to collect sales tax and to begin collection of the tax.
“In the interest of being reasonable and respecting the difficulty of tailoring sales tax software to Pennsylvania's complicated sales tax rules, we believe extending the compliance deadline is the fair thing to do,” Revenue Secretary Dan Meuser said in a news release.
The department issued a tax bulletin in December 2011 aimed at clarifying Pennsylvania's sales tax nexus law for remote sellers and the revenue department's authority to enforce it .
Sales and Use Tax Bulletin 2011-01 explains that Pennsylvania relies on in-state activity to establish nexus and provides examples of the types of activity that constitute “maintaining a place of business in Pennsylvania” sufficient to require sales tax registration and collection on internet, catalog, and telephone sales.
Meuser said there will be no further extensions of the Sept. 1 compliance deadline, which he said falls far enough ahead of the holiday season to enforce uniform sales tax collection and foster fair competition between e-commerce and brick-and-mortar businesses during the busiest retail sales season of the year.
Businesses with Pennsylvania nexus that fail to register and begin collecting sale tax by Sept. 1 “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,” Meuser said.
He said the department has the statutory authority to look back at least three years for audit and assessment purposes.
The department's initiative to address sales tax collection by online retailers coincides with an effort to encourage voluntary compliance by individuals with Pennsylvania's use tax law.
For the 2011 tax year, the revenue department added a use tax line on the Pennsylvania personal income tax return to raise awareness of use tax obligations and make it easier for individuals to report and pay the tax.
The text of the news release is available online at http://www.portal.state.pa.us/portal/server.pt/document/1221138/revenue_department_offers_one-time_extension_on_nexus_compliance_deadline_for_remote_sellers and the bulletin is available online at http://www.portal.state.pa.us/portal/server.pt/document/1210543/st_bulletin_2011-01_pdf.
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