News Brief: Pennsylvania Delays Online Tax Compliance Until September
Pennsylvania’s Secretary of Revenue Dan Meuser issued an extension today for online businesses with a physical presence in the state to become compliant with licensing and sales tax collection. As we reported in December, the state originally requested compliance by February 1, 2012, but Meuser’s announcement stated that businesses will now have until September 1, 2012.
â€œWe heard from a number of e-commerce businesses that companies are willing to comply with their Pennsylvania sales tax obligations, but our original Feb. 1 compliance deadline is impractical from operational and technical standpoints,â€ said Revenue Secretary Dan Meuser. â€œIn the interest of being reasonable and respecting the difficulty of tailoring sales tax software to Pennsylvaniaâ€™s complicated sales tax rules, we believe extending the compliance deadline is the fair thing to do.â€
The Pennsylvania situation originally caught our attention because no new “Amazon tax” law was passed. Instead the state took the position that existing (“complicated”)Â law could be used to enforce business licensing and tax collection based on a physical presence in the state.
While Meuser’s move might be interpreted as a walk back from his original statement, he also noted in today’s announcement that the September deadline was early enough to capture sales connected to the next holiday season. But there’s no question that it offers a short-term reprieve for Pennsylvania affiliates as highlighted in an email from the Performance Marketing Association discussing the announcement:
That means advertisers can keep their Pennsylvania-based affiliate partnerships for now. We will continue to fight this and hope we can convince them to withdraw completely, in favor of federal sales tax reform, before the September 1st deadline. Many thanks to our coalition of advisers, attorneys and lobbyists who helped us negotiate this extension, as well as Secretary Meuser, Jennifer Branstetter (Governor Corbett’s Director of Policy), and Lieutenant Governor Tim Cawley, who took the time to meet with us and learn about the impact on Pennsylvania affiliate marketers.
It will be interesting to watch if states continue their wrongheaded approach to tax enforcement as opposed to waiting for federal sales tax reform. For all the talk from states’ governors and legislators about the desire to create jobs, it seems more than a little hypocritical that states continue to pursue an agenda that costs people income, if not their livelihood, which seems like it might have a significant impact on tax collection. But remember, this is all about being fair.