State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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Pennsylvania (PA)

PA Sales Tax - Name of Tax and General Application:

Pennsylvania imposes a tax on retail sales of tangible personal property and specific services in the state. This tax is known as a "sales tax". In addition a tax is imposed on use of tangible personal property purchased at retail in the state and certain services purchased outside the state. This tax is known as a "use tax" and only applies in situations where no sales tax has been paid.

PA Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Pennsylvania imposes nexus when retailers regularly or substantially solicit orders for tangible personal property or taxable services; such solicitation may include catalogs and other advertising.

PA Local Tax - Do Localities Impose Tax?

Yes, Pennsylvania imposes local sales tax.

PA Resale Certificate Renewal Agreements:

Sales for resale are not taxable and are excluded from the definition of "purchase at retail."

PA Resale Certificate Renewal Periods

The certificates technically have no expiration period. Vendor registration, however, must be renewed every five years. This effectively means that exemption certificates should be renewed in the same period.

PA Statute of Limitations

Later of three years from: the date the return was filed or the end of the year in which the liability arose.