Sales tax crackdown postponed; do you pay the 'use tax'?

If you’ve got a brick-and-mortar store in Pennsylvania, you pay a 6 percent sales tax on every item you sell (at least; some municipalities, including Philadelphia, charge more). So it might not seem fair to you that many “remote sellers” – people who sell things to Pennsylvanians over the Internet, or by phone – do not. It gives them a competitive advantage.

That’s part of why the state Department of Revenue had planned to start collecting sales tax starting tomorrow, February 1, from any remote seller with a physical presence, like a distribution center, in Pennsylvania.

But, as CBS-3 reports, it’s giving those sellers an extension until September 1. Spokeswoman Elizabeth Brassell explains that the department has spoken to a bunch of the sellers, and they’re willing to comply, but not ready. So the state is giving them time.

This news reminded us of one of our “favorite” (read: least favorite) tax realities: The “use” tax. If you, a Pennsylvania resident, buy something, and the seller does not charge sales tax, you are expected under the law to keep a record of that and pay the 6 percent tax yourself. That's right. You're supposed to check your receipts, save them, and pony up.

Even if the seller is supposed to charge the sales tax, and doesn’t, you become responsible.

Collection from remote sellers, when it kicks in, should decrease the number of purchases on which buyers will owe a use tax. But you will still owe the use tax if you buy a taxable item from a remote seller without a physical presence in the state.

A lot of people skip the use tax -- Brassell says the state estimates it lost $380 million last year alone in unpaid sales and use taxes (the department of revenue couldn’t immediately tell us how much of that was use tax). But the state does occasionally crack down: Here’s a blog post from a woman who was unhappy to receive a notice about the need to pay. And here's the state's fact sheet on the tax.

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