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Pa. Expects ‘Substantial Compliance’ With Online Sales Tax Directive

Photo Credit: Thinkstock

Photo Credit: Thinkstock

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Reporting Tony Romeo

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By Tony Romeo

HARRISBURG, Pa. (CBS) – The Pennsylvania Revenue Department says it expects “substantial compliance” when a directive requiring online companies with a “physical presence” in the state to collect sales taxes takes effect on Saturday.

“Companies that have physical presence or ‘nexus’ in Pennsylvania are required by law to add the six percent sales tax for the state,” says Revenue Department spokeswoman Elizabeth Brassell. “And those that sell to residents in Philadelphia add an additional two-percent local tax, and one-percent local tax to Allegheny County.”

A “nexus” is defined in different ways, such as maintaining a warehouse or other buildings in the state or having sales people who operate in Pennsylvania.

“We’ve had conversations over the past few months with about a dozen e-commerce companies and they’ve all expressed interest in complying with their sales tax obligations, so we’re excited to see those that take that initiative and begin collecting and remitting as of Saturday, September first.”

Brassell, for now, won’t identify which dozen companies the department has talked with. But, Amazon has already announced its intention to collect state and local sales taxes in Pennsylvania. The new directive is expected to raise more than $40 million this fiscal year.

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