The Pennsylvania Department of Revenue recently issued guidance in response to the Supreme Court opinion in South Dakota v. Wayfair, Inc., 138 S.Ct. 2080 (2018), clarifying when remote sellers are considered to maintain places of business in Pennsylvania and thus, required to collect and remit Pennsylvania sales taxes. In Wayfair, the Supreme Court overruled previous precedent requiring a business to have a physical presence in a state before the state could require the business to collect its sales taxes. See Quill Corp. v. North Dakota, 504 U.S. 298 (1992). After Wayfair, economic nexus may be sufficient for a state to require an out-of-state business to collect and remit its sales tax. The newly issued Pennsylvania guidance provides that any person who made more than $100,000 of gross sales in Pennsylvania in the past 12 months has sufficient economic nexus to be considered to maintain a place of business in Pennsylvania and thus, is required to collect and remit Pennsylvania sales tax. This rule applies to transactions that occur on or after July 1, 2019.
Remote businesses must carefully determine whether they meet states’ economic nexus definitions and are required to collect and remit sales taxes.