Pennsylvania Self Employment Sales Tax by mve10293

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									 EDWARD C. SARNO, CPA/ABV, CBA

1240 West Chester Pike, Falcon Building, Suite 210, West Chester, PA 19382
Voice # 610-429-3322 ♦ Fax 610-429-3340 ♦ e mail # ed@sarnocpa.com

                                               MEMORANDUM :

DATED:       Friday, August 04, 2006

RE: PENNSYLVANIA SALES and USE TAX                           - 2 pages



The Commonwealth of PA imposes Sales and Use Tax on certain services and on certain
purchases of personal property.

If you or your business buys items that are subject to Sales Tax, and the seller does not charge
and collect the Sales Tax, you are personally liable for paying the tax to PA – and it now
becomes a Use Tax. The tax is due on the full purchase price. Most items purchased from out-
of-state vendors are subject to Use Tax. Use tax is also due when an in-state vendor fails to
charge Sales Tax on a taxable item.

The tax rate for Sales and Use Tax is six percent. An additional one percent is due in Allegheny
and Philadelphia counties.

Businesses that incur Use Tax on a regular basis need to register for a Use Tax account
number.

A taxable purchase made via toll-free phone numbers, mail order catalogues, and over the
Internet are subject to Use Tax is the vendor does not charge the Sales Tax.

Below is a list provided by the PA Department of Revenue of examples of taxable personal
property purchases and services that are subject to the tax:

Computers:
        Desktops
        Laptops
        Printers
        Canned software
        Maintenance agreements
        Peripherals
Office equipment:
        Copiers
        Cabinets
        Telephones
Printed materials:
        Desk calendars
        Posters
        Business cards
Furniture:
       Desks
       Chairs
       TVs
Supplies:
       Check stock
       Folders
       Envelopes
       Paper
       Mops
       Cleansers

Services:
       Building cleaning and maintenance
       Lawn care
       Pest control
       Secretarial
       Editing services
       Premium cable services
       Employment agencies
       Collection services
       Self storage
       Credit reporting


Like the Sales Tax rules, items and services that are used in an exempt business activity are
not subject to the tax. Charitable, religious, volunteer and nonprofit organizations are exempt
from Sales and Use Tax.

A Sales Tax license can be revoked if the business is not current with its other taxes.

In the first year of business, remit your sales taxes to PA on a quarterly basis. New businesses
must register with PA to obtain Sales Tax and other business account numbers. After that, PA
will advise as to how often to pay Sales and Use Tax and you will be on a monthly, quarterly or
semi-annual filing basis.

If the purchase or the service is subject to Sales Tax, then the associated labor is also subject
to Sales Tax, such as labor on a vehicle repair. Labor charges to repair or install items that
become part of real estate are not taxable.

A complete list of the products and services that are subject to Sales Tax is beyond the scope
of this memo.


Please contact us at 877-ed-sarno if you have any questions.

								
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