Reed Smith Client Alerts

On October 30, 2017, Governor Tom Wolf signed House Bill 542 (“HB 542”) into law to make several tax changes that will generate revenue for Pennsylvania’s 2017/2018 budget. In addition to imposing entirely new tax obligations on some businesses and clarifying certain tax changes made by Act 84 of 2016, the bill amends existing administrative appeal procedures. A brief overview of some of the noteworthy tax changes is provided below.

Authors: Kyle O. Sollie Robert E. Weyman Christine M. Hanhausen Jonathan E. Maddison Ashley R. Rivera

Imposing Sales Tax Collection and Reporting Obligations on Platforms

With the passage of HB 542, Pennsylvania becomes the fourth state to impose tax collection or reporting obligations on platforms (e.g., ebay.com, Amazon.com) and individuals who sell through platforms.1 The law imposes obligations on three actors: “marketplace facilitators,” “marketplace sellers,” and “referrers.” “Marketplace facilitator” is defined as a “person that facilitates the sale at retail of tangible personal property.”2 A person “facilitates” a sale at retail if the person or an affiliated person:

  1. lists or advertises tangible personal property for sale at retail in any forum;3 and
  2. either directly or indirectly through agreements or arrangements with third parties, collects the payment from the purchaser and transmits the payment to the person selling the property.4