Shoppers planning to take advantage of Cyber Monday Internet sales on Nov. 28 are reminded to check receipts for sales tax charges, and save purchase records not reflecting sales tax to facilitate payment of use tax in the new year, Department of Revenue Secretary Dan Meuser said in a release.
“Many online retailers do not collect sales tax, and some even falsely advertise that products can be purchased online tax-free,” said Meuser. “When sales tax isn’t collected by the seller on a taxable item or service, it becomes the purchaser’s responsibility – by law – to report and remit use tax.”
Though use tax has been on the books since 1953, when sales tax was first codified in Pennsylvania, many taxpayers are unaware of use tax liabilities.
In an effort to raise awareness about use tax obligations and encourage voluntary compliance with use tax law, beginning with tax year 2011, the department is simplifying the use tax reporting and payment process by adding a use tax line to the PA-40 Pennsylvania Personal Income Tax Return. Taxpayers will be able to easily report and pay use tax annually using padirectfile, Fed/State e-File or the paper PA-40 beginning in January.
“It’s a matter of fairness,” Meuser said. “Pennsylvania businesses – those who employ our residents, pay state and local taxes and support our communities – are put at a 6 or 7 or 8 percent competitive disadvantage against out-of-state businesses when sales or use tax is not paid on taxable items purchased online.”
As the popularity of Internet and mail-order shopping grows among Pennsylvania residents, individual consumers’ use tax compliance will facilitate fair and equitable tax collection and level the playing field among e-commerce retailers and Pennsylvania’s brick-and-mortar stores.
Taxpayers are encouraged to visit www.revenue.state.pa.us/usetax for more information about use tax, including resources for determining when use tax is due and instructions for remitting the tax.