Pennsylvania: Sales Tax Handbook
What constitutes sales tax nexus in Pennsylvania?
One of the more complicated aspects of Pennsylvania sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of Pennsylvania, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in Pennsylvania, the vendor must register for a Pennsylvania sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in Pennsylvania.
Sales Tax Nexus in Pennsylvania
According to the law of Pennsylvania, all retailers who have tax nexus can be defined in several different ways. A seller has tax nexus if they have any of the following within the state's boundaries:
An office or place of business, an employee present in the state, goods in a warehouse, any owned real or personal property, deliveries of merchandise in, any independent contractors or other representatives in, or any leased property in the state.
For additional details on sales tax nexus law in Pennsylvania, see the nexus information page from the Department of Revenue at https://revenue-pa.custhelp.com/app/answers/detail/a_id/1212/~/does-company-have-nexus-if-it-has-no-office,-employees,-or-salespeople-in-pa
Taxation of Internet-Based Sales in Pennsylvania
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Depending on the situation, Pennsylvania may or may not charge sales tax on Internet-based transactions. In the state of Pennsylvania, click-through nexus exists. The DOR has declared that a remote seller can have nexus in Pennsylvania if this seller meets the following requirements: if they have a contractual relationship with any individual or entity located in Pennsylvania who has a website, which has a link, which in some way encourages buyers to buy tangible property from the previously mentioned seller, and if the individual or entity recieves some sort of payment for their services; or if they steadily solicit orders from Pensylvanian consumers using the website of the entity or individual
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within Pennsylvania, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in Pennsylvania?
The folks at the sales tax compliance company Avalara are an approved Pennsylvania sales tax partner, and you can use their free Pennsylvania nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay Pennsylvania sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
Back to Pennsylvania Sales Tax Handbook Top