Pennsylvania – Click-Through and Affiliate Nexus Provisions

SALT Report 1132 – A bill introduced in the Pennsylvania House of Representatives expands the sales and use tax definition of “maintaining a place of business in this Commonwealth”, updates the seller notice and reporting requirements, and offers guidelines for the collection of tax.

The Tax Reform Code includes the following click-through nexus provisions:

  • Remote sellers would have nexus if they solicit sales with links on an in-state businesses’ Web page and the cumulative gross receipts exceeded $10,000 during the previous 12 months;
  • Nexus is presumed for members of the same “integrated business enterprise” if any other members of the group have nexus by directly or indirectly through an agent or representative, maintain or use a physical place of business or regularly solicits orders; and
  • A person has nexus if an affiliate, who is a member of the same controlled group of corporations, has nexus and sells goods under the same or similar business name; uses the same or similar trademarks, trade names, or service marks; and advertises, promotes, or enables sales by using in-state employees or facilities; and offers maintenance services, delivery, installation, or assembly.

Additionally, the bill would require remote sellers that do not collect Pennsylvania sales tax to provide notification on their retail websites, in their retail catalogs, in their telemarketing scripts or marketing tools, and on receipts and invoices to customers that tax must be paid by the purchaser unless otherwise exempt or nontaxable.

All non-collecting remote sellers will be required to annually send to their in-state customers who made over $500 in purchases during the previous calendar year and the Pennsylvania Department of Revenue forms detailing the customer’s purchases over the course of the year.

For Further Information

H.B. 14 Pennsylvania House of Representatives