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Tax.appeal.168, Tax Accountant
Category: Tax
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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With the new PA online sales and use tax law that is still

Resolved Question:

With the new PA online sales and use tax law that is still pending a September 1, 2012 effective date...if an out-of-state company has a physical presence in PA selling products and services online with affiliates, is the company (seller) required to collect 6% sales tax on ALL online sales made or just for the sales made to PA residents? I'm confused from reading all the other sites out there. Thanks!
Submitted: 5 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 5 years ago.
Welcome, THANK YOU for using Just Answer. My goal is to help make your life...a little...LESS taxing.

Based on the article found at the following link, currently the 6% sales tax is to be charged for those residents of PA only since that is where there is a "physical presence". According to the article, PA has postponed the enforcement of the affiliate Nexus law until Sept. 1, which means that after Sept. 1, yes, the 6% tax is required to be charge in those states where there are affiliates.

Please let me know If I can be of further assistance to you regarding this matter.

Thank you again for using JUST ANSWER.
Customer: replied 5 years ago.
So if I understand this correctly. The 6% sales tax is only collected for purchases made by PA residents; OR collected for all sales made by a PA based affiliate (regardless of what state the purchaser is in)?
Or does the sale have to be purchased by a PA resident in order for the law to kick in requiring us to collect the 6% tax? And finally, if we do have to collect the tax for a purchase by a PA resident, with an affiliate involved in the sale, I'm presuming we would then charge the additional 6% and send it to PA Revenue. However could we also not charge the additional 6% to our purchaser, and simply send in 6% sales tax on 50% of the sale price and leave the other 50% of the sale at 6% sales tax up to the responsibility of the affiliate (in the case where the affiliate commission is 50% of the sale)? We would send 1099 forms to our affiliates documenting their sales but not necessarily by state unless we would have to under the new law.
Expert:  Tax.appeal.168 replied 5 years ago.
Hello again,

There are a number of different issues here to address. Let's see.

1) Sales tax to be charge on purchases made by PA residents;

2) The sales tax would have to be paid to the PA Dept. of Revenue. Some states either require a return to be filed monthly, quarterly, or annually. They will let you know how often you need to file a sales tax return;

3) It is between you and the affiliate how you want to handle the sales tax, but it has to be accounted for and paid to the PA Dept, of Revenue;

4) The 1099s should be issued based on sales. I'm not sure how the new law would affect this, if it affects it at all.

Customer: replied 5 years ago.
Perfect. The only thing you did not address was whether the tax has to be collected because the affiliate is in PA even though the purchaser is outside of PA, or is the tax ONLY to be collected when the purchaser is from PA?

Thanks, XXXXX XXXXX hopefully. Thanks for your help.
Expert:  Tax.appeal.168 replied 5 years ago.
Currently, if you have a physical presence in the state of PA, an office, warehouse, distribution center, etc., you will charge sales tax to PA residents only, no one else. The PA Affiliate Nexus law has not gone into effect yet, so simply having an affiliate in PA doesn't require you to collect sales tax at this point.
Expert:  Tax.appeal.168 replied 5 years ago.
Under the Affiliate Nexus Law an affiliate would be considered a physical presence, which means in those states where you have an affiliate, you will be required to charge the residents of that state the applicable sales tax. Hopefully this clarifies matters for you.
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