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Are Out-Of-State FBA Sellers Exempt From Sales Tax Collection In Pennsylvania?

Out-of-state FBA sellers in Pennsylvania may not need to collect state sales tax on sales made with their inventory.

In the beginning of September, FBA sellers, with the help of the Online Merchants Guild, secured a victory against the Pennsylvania Department of Revenue (DOR) when the Commonwealth Court determined that FBA (Fulfillment by Amazon) inventory is not sufficient to establish a sales tax collection requirement for nonresident FBA sellers. In this blog article, we explain what FBA inventory is, the background that led to this decision and what it means moving forward.

What Is An FBA Seller?

FBA is a service that allows businesses to outsource order fulfillment to Amazon. Businesses send products to Amazon fulfillment centers and when someone makes a purchase, the FBA workers pack and ship the order, take care of customer service and process returns.

What Sales Tax Obligations Do Out-Of-State FBA Sellers Have?

Written by Monika Miles | Posted in Pennsylvania • Sales Tax Collections

The state of Pennsylvania levies a 6% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes up to 2%. The range of total sales tax rates within the state of Pennsylvania is between 6% and 8%.

Use tax is also collected on the consumption, use or storage of goods in Pennsylvania if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Pennsylvania on or before the 20th day of February.
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Written by Aaron Giles | Posted in Pennsylvania • Sales And Use Tax Manufacturing Exemption