Projects, Processes and Systems to Support Online Sales & Use Tax Compliance

Transcription

1 Prjects, Prcesses and Systems t Supprt Online Sales & Use Tax Cmpliance 2018 FTA Technlgy Cnference Kansas City, Missuri August 2018

2 AGENDA Backgrund Planning and Implementatin Results/Lessns Learned S Far Yur Questins

3 Backgrund fr Sales Tax Cmpliance f Online Retailers

4 BACKGROUND Sales tax cmpliance December 1, 2011 Sales Tax Bulletin cuments/st_bulletin_ pdf September 1, 2012 Amazn begins t cllect PA sales tax n its direct sales many remte sellers fllw suit thrugh 2017 Octber 30, 2017 Act establishes Marketplaces Sales prvisins April 1, 2018 Amazn begins t cllect PA sales tax n its marketplace sales many marketplace facilitatrs fllw suit Marketplace Sales is nt ecnmic nexus

5 BACKGROUND Use tax cmpliance Nvember 2005 t present business use tax vluntary cmpliance initiative Onging transactinal use tax prgram (including US Custms and audit referrals) Inclusin f cnsumer use tax reprting line n PA-40, the individual incme tax return Effective fr 2011 tax year $3 t $4 millin per year in use tax reprted

6 BACKGROUND Marketplace sales apprach ther states Clrad (leading w/ DMA v Brhl) 2017 calendar year statistics shw: 800K transactins $250MM purchases $7.5MM ptential tax Washingtn State January 1, 2018 start Others Minnesta, Rhde Island and Oklahma

7 Planning and Implementatin PA Marketplace Sales Cmpliance Prgram

8 PLANNING / IMPLEMENTATION Act 43 f 2017 Electin fr ntice/reprting r cllectin Marketplace sales utreach Reprting plans Fllw-up enfrcement

9 PLANNING / IMPLEMENTATION Act 43 f 2017 Marketplace Sales guidance rketplacesales/pages/default.aspx Electin fr nline sellers t ntice/reprt purchasers OR cllect $10K threshld fr facilitatrs, remte sellers and referrers Facilitatrs having PA nexus required t cllect and remit fr all taxable sales in their marketplaces

10 PLANNING / IMPLEMENTATION Electin fr ntice/reprting r cllectin Octber 30, 2017 Enactment f statute February 1, 2018 Guidance published March 1, 2018 Electin due (failure t elect deemed a ntice/reprting electin) April 1, 2018 Ntice/reprting r cllectin due January 31, 2019 Reprts due t purchasers and department by

11 PLANNING / IMPLEMENTATION Marketplace sales utreach Building upn prir years remte seller enfrcement plus new data surces 3,000 January 2018 electin alert ntices 10,000 April May 2018 vluntary cmpliance ntices Extensive nline guidance Directed apprpriate resurces t majr facilitatrs and remte sellers

12 PLANNING / IMPLEMENTATION Reprting plans fr remte seller Uplad via department s business tax nline filing/payment applicatin, E-TIDES E-signature accunt required first Uplads f purchaser data will carry name and address f facilitatr and/r remte seller Include purchaser name and address, shipping address, aggregate purchase dllar amunt

13 PLANNING / IMPLEMENTATION Reprting plans fr purchaser analysis Raw data frm remte sellers psitined in data warehuse Statutry limitatins f data N TIN Only aggregate $ amunt frm seller Evaluate seller fr general taxability e.g., clthing nn-taxable in PA Cllate/ttal purchaser data (by May 2019)

14 PLANNING / IMPLEMENTATION Fllw-up enfrcement purchaser use tax Validated, cllated purchaser recrds reviewed fr use tax cmpliance Reprting n individual incme tax Reprting n sales and use tax return Reprting n stand-alne use tax return Cmpliance ntices issued t thse wh have nt reprted/paid use tax (June Nvember 2019)

15 PLANNING / IMPLEMENTATION Fllw-up enfrcement penalty fr nncmpliant facilitatrs and remte sellers The department shall assess a penalty in the amunt f twenty thusand dllars ($20,000) r twenty per cent f ttal sales in Pennsylvania during the previus twelve mnths, whichever is less, against a remte seller, a marketplace facilitatr r a referrer that makes an electin under sectin 213.1(a) t cmply with the ntice and reprting requirements, r is deemed t have made such electin under sectin 213.1(f), and fails t cmply with the requirements under sectin r The penalty shall be assessed separately fr each vilatin but may nly be assessed nce in a calendar year. 1 st Quarter 2019 impsitin Leverage earlier cmpliance ntices and direct cntacts

16 Results and Lessns Learned S Far

17 LESSONS LEARNED SO FAR Fcus n marketplaces and the facilitatrs Cllectin at surce key tax administratin principle fr efficiency/least cst burden Outreach/educatin effrts critical fr (independent) remte sellers Ntice/reprting cmpliance effrts are required with remte sellers Nn-respndents Thse failing t hnr electin with required ntices and/r reprts

18 Yur Questins

19 Kevin Milligan Directr, Bureau f Enfrcement Planning, Analysis & Discvery (EPAD) kmilligan@pa.gv Adam Hvne Senir Analyst, Bureau f Enfrcement Planning, Analysis & Discvery (EPAD) ahvne@pa.gv