{"id":3012,"date":"2019-03-13T15:19:23","date_gmt":"2019-03-13T19:19:23","guid":{"rendered":"https:\/\/keysolutions.us\/blog\/?p=3012"},"modified":"2019-03-13T15:19:30","modified_gmt":"2019-03-13T19:19:30","slug":"pa-dept-of-revenue-initiative-causes-vendors-to-send-dear-john-letters-to-pa-residents","status":"publish","type":"post","link":"https:\/\/keysolutions.us\/blog\/pa-dept-of-revenue-initiative-causes-vendors-to-send-dear-john-letters-to-pa-residents\/","title":{"rendered":"PA Dept of Revenue Initiative Causes Vendors to Send “Dear John” Letters to PA Residents"},"content":{"rendered":"\n

If You Purchase Goods on the Internet, Don’t Be Surprised If You Receive a “Dear John” Letter from the Vendor<\/strong><\/p>\n\n\n\n

PA Dept of Revenue Initiative, along with Supreme Court Decision in Wayfair, Is Closing Sales Tax Loophole for Taxpayers Who Make Online Purchases and Do Not Remit Use Tax<\/strong><\/p>\n\n\n\n

Fact Pattern:<\/p>\n\n\n\n

PA resident purchases goods on the Internet (or in Delaware) that are subject to PA sales tax. The vendor selling the goods on the Internet is not registered with the PA DOR because the vendor lacks nexus in PA. (Nexus is the amount of contact a business has in a state that subjects the business to that state’s taxes.) Accordingly, there is no PA sales tax charged by the vendor on the sale. The PA resident is required by law<\/strong> to remit PA’s use tax (6% – the same rate as the PA sales tax) on the taxpayer’s PA-40 personal income tax return. For example, you buy a Rolex watch on the Internet and are not charged any sales tax. The PA resident is required by law to remit to PA a 6% use tax (the same as if the watch had been purchased in PA).<\/p>\n\n\n\n

The taxpayer’s remittance of the use tax was on the honor system – PA really had no means to check if the taxpayer remitted all of the use tax that was due. For PA, with Delaware next door without a sales tax, it became even more of a challenge to collect the taxes due it.<\/p>\n\n\n\n

The June 21, 2018 Supreme Court decision in South Dakota vs. Wayfair allows states to tax remote – online, catalog, and\/or mail order sales. Prior to this landmark decision, a vendor had to have a physical presence in the state to be able to charge sales tax to residents of that state. Now, states are free to collect sales tax from any person based on economic nexus – just having an economic interest in the state – such as from a sale of goods. <\/p>\n\n\n\n

Vendors have two ways to comply. They can collect the tax from the customer and remit the tax to each state where it does business, OR provide the state with a list of customers who made purchases during the calendar year and the amount of those purchases and notify the customers to remit the use tax. Which of the two do you think the vendors will select? The latter, because it is less costly to implement.<\/p>\n\n\n\n

Should you be a recipient of such a letter and agree with the information provided to you by the vendor, you need to report and remit the use tax to PA. The PA DOR will then cross-check the lists it receives from vendors against your individual income tax return (PA-40). Tax preparers will be requesting the amount of use tax to report on their tax organizers.<\/p>\n\n\n\n

\n\nIf you would like to discuss your business or personal tax planning<\/a>, tax preparation<\/a> and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601<\/a> today to make an appointment at our Exton PA CPA office<\/a> to discuss your situation. You can also schedule a consultation at Click Here<\/a>. \n\n<\/p>\n\n\n\n

Copyright \u00a9 2019 Keystone Financial Solutions, Inc.  All rights reserved.  BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.<\/strong><\/p>\n\n\n\n

About F. Bryan Haarlander, EA, CTRS:<\/strong><\/p>\n\n\n\n

Bryan\nHaarlander is an IRS licensed Enrolled Agent and who owns and operates a\nspecialized tax services firm serving clients in the western suburbs of\nPhiladelphia, PA, which includes the cities of Chester Springs, Coatesville,\nCollegeville, Devon, Downingtown, Exton, Frazer, King of Prussia, Paoli, Philadelphia,\nPhoenixville, Pottstown, Radnor, Reading, Wayne, West Chester in Berks,\nChester,  Delaware, Montgomery and\nPhiladelphia Counties, as well as clients in Delaware, New Jersey, New York and\nthroughout the continental USA. <\/p>\n\n\n\n

A\nCertified Tax Resolution Specialist, Bryan is well-known for his IRS tax\nresolution expertise and his book How to\nResolve Your IRS Tax Debt Problems. <\/em><\/p>\n\n\n\n

\"\"<\/figure>\n","protected":false},"excerpt":{"rendered":"

If You Purchase Goods on the Internet, Don’t Be Surprised If You Receive a “Dear John” Letter from the Vendor PA Dept of Revenue Initiative, along with Supreme Court Decision in Wayfair, Is Closing Sales Tax Loophole for Taxpayers Who Make Online Purchases and Do Not Remit Use Tax Fact Pattern: PA resident purchases goods […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4],"tags":[],"class_list":{"0":"post-3012","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-pennsylvania-tax-news","7":"entry"},"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9W9tf-MA","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/3012","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/comments?post=3012"}],"version-history":[{"count":20,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/3012\/revisions"}],"predecessor-version":[{"id":3051,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/3012\/revisions\/3051"}],"wp:attachment":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/media?parent=3012"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/categories?post=3012"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/tags?post=3012"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}