A year and a half removed from the Supreme Court’s decision in South Dakota v. Wayfair, states are beginning to see the benefits of implementing changes to how tax is collected for remote sellers. One of the first states to jump on the economic nexus trend was Pennsylvania.
Almost immediately following the Wayfair decision, the Pennsylvania Department of Revenue (DOR) made the decision to contract with certified service providers to deliver no-cost services to remote sellers obligated to collect taxes in Pennsylvania. This offer applies to out-of-state retailers that exceeded $100,000 in sales during the previous 12 months, as well as out-of-state retailers that choose to voluntarily register to collect and remit tax in the state.
To qualify as a certified service provider, or CSP, Sovos was required to participate in a review with the DOR to determine that our solutions would accurately determine rates and taxability.
The qualification process was an important step because in the event of an error in calculation or remittance performed, retailers using this service will not be liable for any potential penalties or interest resulting from that error. Assuming of course that the error was made based on accurate information presented by the business at the time the tax was originally calculated, and not because of false information provided by the seller.
As a certified service provider, Sovos steps into the shoes of the “tax-payer” and will collect and file taxes for participating businesses under a special tax registration status. Sovos offers several services including tax determination, filing, remittance and notice handling. Sovos is compensated for this work by the state of Pennsylvania directly so companies can worry about running their business and not about interacting with the DOR.
It is important to remember that the program is limited to retailers who only make sales into Pennsylvania, that is, who only have economic presence in the state. If a company has a physical presence in the state, they are ineligible to use the Pennsylvania program.
For those that are deemed remote sellers into Pennsylvania and meet the $100K threshold, sales tax collection and remittance obligations have already begun. Now is the time to act and avoid the potential for time consuming audits and costly penalties.
Contact Sovos today to learn how to take advantage of our certified solution services in Pennsylvania to meet your tax obligation needs.