View full size The Patriot-News, 2010 Amazon, which has a distribution center in the Carlisle area, is one of the largest online retailers that have resisted colÂlecting sales tax. The Department of Revenue said Internet companies with facilities in the state will get a seven-month reprieve in collecting the tax.
Pennsylvania’s Department of Revenue has given Internet retailers a reprieve, pushing a February deadline for companies such as Amazon to start collecting sales tax back to September.
Online businesses were initially supposed to start collecting the sales tax today.
Revenue spokeswoman Elizabeth Brassell said a number of online businesses “demonstrated their willingness to comply, but they made it clear that for technical operational reasons,” the deadline was unworkable.
Brassell said the extended deadline would give those businesses time “to get their software up to par, recognizing the complexity of the Pennsylvania tax code.”
She said it was the “reasonable” thing to do.
There’s no such clemency for the common taxpayer.
This year’s tax form includes a special line — line 25 — requiring citizens to pay “use tax” on items they purchased over the Internet for which no sales tax was charged.
The Corbett administration didn’t announce it would be aggressively collecting use tax until November. If the taxpayer failed to keep receipts for all purchases, the new tax booklet offers a handy table of estimated tax based on income.
A curious feature of that table is that the wealthiest pay a rate 25 percent lower than the poorest of Pennsylvanians.
The sales tax is 6 percent.
The estimates in the table assume a person making $30,000 a year would buy $200 in goods over the Internet; it therefore suggests $12 be paid in tax.
For people who make over $200,000, however, the table offers a choice: use a percentage of income or $71, whichever is lower.
If the rich-folks rate (0.03 percent of income) were applied to the person making only $30,000
a year, he’d pay $9 in use tax, instead of the suggested $12.
“Higher-income residents generally pay a somewhat lower percentage of total income as sales and use tax,” Brassell said.
The table is based on one developed in New York state.
“Of all the states we evaluated, New York had one of the highest rates for use tax self-reporting,” Brassell said. “We found a good model, and we used it.”
People who put “zero” in line 25 will not immediately be flagged for an audit, Brassell said. But if the department comes across information that indicates the person owes use tax, she said the state will go after the tax owed “with interest and penalties.”
Nevertheless, it has the potential to generate significant revenue. If just half of tax filers pay the lowest suggested tax, the state would collect $18 million more than it did last year.
State officials would prefer that online retailers collect the sales tax.
In 1992, the U.S. Supreme Court ruled that states can’t compel a company to collect a sales tax unless it has a physical presence in that state.
Amazon is one of the biggest online retailers that consistently resists collecting sales tax. However, Amazon recently reached agreements with California and Tennessee to collect sales tax on purchases by 2013.
Last fall, the Revenue Department said any remote seller operating a “place of business” in Pennsylvania must collect the tax. The agency says that a “place of business” includes offices, distribution houses or warehouses.
Amazon operates distribution facilities in Pennsylvania, including warehouses in Cumberland and York counties.
Brassell refused to say if Amazon was one of the online retailers that had “demonstrated their willingness to comply.”
“I am not at liberty to discuss any individual retailer by name or the context of discussions,” she said.
Attempts to reach Amazon for comment were unsuccessful.
On the Web
Find out more about taxes on purchases made online: