E-commerce and PA Sales Tax, do you charge or do you not?

E-commerce and PA Sales Tax

If you run an e-commerce website and reside in PA you may be wondering if you have to charge sales tax on the items you sell or not…  The short answer is, it depends, the long answer is below…

If you have under $1,000,000 in gross sales via e-commerce it is easy to figure out, when you sell something to a consumer in a state that you have a physical presence, like Pennsylvania, it is taxable and you collect sales tax for that sale.

In PA, if the item is taxable, you must also collect tax on the shipping cost as well.  If the order is not taxable, you do not have to collect sales tax on the shipping amount. If you have an order that has both taxable and non-taxable items included, you must collect sales tax on the entire shipping cost, not just a portion of it.  The only way to avoid this would be to place separate orders for the taxable and non taxable items.

If your business does more than $1,000,000 per year in e-commerce sales the rules are a little more complex.  We recommend that you speak to your accountant to come up with a game plan.

 

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