PA Sales Tax Nexus When Business has no Physical Nexus but performs delivery/installation in PA?

[NPID123]

Hi there, I just ordered a 4 post car lift for my home's garage. The business/vendor for the lift is based in Virginia and has zero physical presence in Pennsylvania (no buildings, no employees/representatives/agents, etc.) but they travel to nearby states to deliver and install the lifts (the lift price includes free delivery and installation).

The vendor just sent me an invoice which includes PA sales tax. I looked up PA's sales tax nexus laws but it's a bit ambiguous for this situation where the business has no physical presence but does travel into the state to perform delivery/installation.

Does anyone have insight here, and if nexus doesn't exist, some official wording I can definitively point to and show the vendor, so that they don't charge me sales tax?

 

[bcr229]

I strongly suspect the seller is correct. I have a business just outside of PA and have customers in PA. The threshold in PA for collecting and remitting sales tax is very low. You can read about it at Pennsylvania Enacts Notice and Reporting Requirements and Economic Nexus Legislation.

 

[LdiJ]

Hi there, I just ordered a 4 post car lift for my home's garage. The business/vendor for the lift is based in Virginia and has zero physical presence in Pennsylvania (no buildings, no employees/representatives/agents, etc.) but they travel to nearby states to deliver and install the lifts (the lift price includes free delivery and installation).

The vendor just sent me an invoice which includes PA sales tax. I looked up PA's sales tax nexus laws but it's a bit ambiguous for this situation where the business has no physical presence but does travel into the state to perform delivery/installation.

Does anyone have insight here, and if nexus doesn't exist, some official wording I can definitively point to and show the vendor, so that they don't charge me sales tax?

You are located in PA, the product was sold to be delivered and installed in PA. PA sales tax has to be paid.

 

[FlyingRon]

Even if he didn't have a nexus, you'd have to pay the use tax. Since the delivered/installed the unit (rather than just shipping it to you by a common carrier), they do have nexus.

 

[Taxing Matters]

Does anyone have insight here, and if nexus doesn't exist, some official wording I can definitively point to and show the vendor, so that they don't charge me sales tax?

The state has long maintained that any activity by the seller or its agents done physically in the state in connection with the sale of goods subject to the sales tax is sufficient to provide nexus. See Sales and Use Tax Bulletin 2011-01. Moreover, the U.S. Supreme Court last summer overturned its earlier decision from several decades ago that required a physical presence in the state before an out-of-state seller may be required by a state to collect sales tax. As a result, it is no longer necessary for there to be a physical presence by the business. And, by the way, if the seller did not collect that tax, you would be obligated to pay the state use tax on the sale, which is at the exact same rates as the sales tax. Every state with a sales tax has a use tax to ensure that residents don't escape sales tax by ordering stuff from out of state sellers. So any way you slice this, you owe that tax, either by paying the vendor for sales tax or paying the state directly for use tax.

 

[Stephen1]

Sounds like the vendor did you a favor by collecting the sales tax instead of you having to go through the hassle of reporting and paying use tax.