Pennsylvania – Remote-Seller Activities Creating Nexus

SALT Report 1280 – The Pennsylvania Department of Revenue issued a bulletin addressing the sales tax collection responsibilities for retailers located outside Pennsylvania that have established nexus with the state. The department considers a remote seller or someone “maintaining a place of business” in Pennsylvania to have nexus if that seller regularly solicits orders from Pennsylvania customers through the website of a business or individual physically located in Pennsylvania.

The Department determined that maintaining a place of business includes, but is not limited to:

  • Someone who stores property or the property of a representative at a distribution or fulfillment center located in the state, regardless of whether the center also stores and distributes property for third parties from the same location;
  • Someone who has a contractual relationship with an entity or individual physically located in the state and whose website has a link that encourages purchasers to place orders with the remote sellers or the in-state entity, and receives consideration;
  • Someone who utilizes affiliates, agents and/or independent contractors located in the state who provide repair, delivery or other services relating to the tangible personal property sold by the remote seller to Pennsylvania customers;
  • Someone who has affiliates, agents and/or independent contractors that provide service(s) within the state (including, but not limited to storage, delivery, marketing or soliciting sales) that benefit, support and/or complement the remote seller’s business activity;
  • Someone whose employees regularly travel to the state for any purpose related to the remote seller’s business activity; and
  • Someone who accepts orders that are directly shipped to Pennsylvania customers from a Pennsylvania facility that is operated by a remote seller’s affiliate, agent or independent contractor
Companies who have established nexus in Pennsylvania must become licensed to collect sales tax no later than by Feb. 1, 2012.  Companies with Pennsylvania nexus that fail to begin collecting sales tax as required by law may be pursued by a variety of escalating enforcement options which include audit, assessment, lien and/or referral of the case to a collection agency or the Office of Attorney General.
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