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Online Shoppers Should Pay Attention to Sales Tax

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“Cyber Monday” sales increased nearly 30% over last year, according to early reports from IBM Benchmark.  Many online retailers are now collecting and remitting Pennsylvania’s 6% statewide sales tax, but the Department of Revenue is still advising shoppers to save their receipts.

“The first thing to do is to check and see if sales tax was charged on the online purchase.  If it was charged, then the consumer doesn’t need to do anything,” explains Department of Revenue spokeswoman Elizabeth Brassell.

But if you don’t see sales tax on your purchase records, Brassell says it’s the responsibility of the consumer to report the “use tax” to the state when computing their 2012 tax returns. 

It appears that many more people are taking notice of the sales & use tax rules, as the state collected $3.8-million dollars in self-reported use tax last year via a new, simplified process on the PA-40 tax form.

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Online Retailers to Begin Collecting PA Sales Tax

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Pennsylvanians’ online shopping sprees won’t be tax-free for much longer.  Starting September 1st, online retailers with nexus – or a physical presence – in the state must collect and remit sales taxes.  In an interview with Radio PA, state Revenue Secretary Dan Meuser said they are simply enforcing the existing law. “The governor has pledged no new taxes.  The governor is not going to raise taxes.  However, we are going to administer and enforce the laws fairly on all taxpayers.”

Mueser says the enforcement effort is more about tax fairness than revenue generation, but he does estimate that it will result in an additional $55-million dollars in sales tax collections per year.

The strictly enforced system is intended to be fairer to Pennsylvania’s brick & mortar retailers.  “Those companies on Main Street tend to do most of the hiring and employment and living in our communities, so it’s simply not fair for us not to enforce the laws appropriately,” Meuser says.

Businesses were notified of the enforcement effort last December.  The original February compliance deadline was pushed back until September, and Meuser says there will be no more extensions.

While he declined to discuss specific companies, Meuser does expect former e-commerce companies, both large and small, to be collecting and remitting sales taxes as of September 1st.