For Immediate Release
May 29, 2003
Pennsylvania Institutes New Vendor Enforcement Program
Following New Jersey’s lead, Pennsylvania has stepped up its efforts to collect sales, corporate income, personal income, and other taxes from out-of-state vendors.
As a result of recent changes in its Tax Reform Code in regard to the definition of “maintaining a business”, which now provides that “an out-of- state vendor or its subsidiaries, agents, or representatives, who enters the Commonwealth for the purpose of delivering, assembling, servicing or repairing tangible personal property, is liable for sales, corporation, and other taxes,” Pennsylvania is attempting to level the playing field between out-of-state and in-state vendors of tangible personal property.
Utilizing the services of the Department of Transportation (“DOT”) and State Police, the Department of Revenue (“DOR”) will set up roadside stops at DOT weigh stations throughout the Commonwealth and will use the State Police to stop and temporarily detain trucks. DOR representatives will interview truck drivers and inspect shipping documents, bills of lading, invoices, etc. to determine if their business activities in Pennsylvania would subject them, or the person or persons they represent or act as agents or subsidiaries for to Pennsylvania taxes.
The DOR has authority to issue a jeopardy assessment, if necessary, and also has authority to seize the vehicle and its contents, if the truck driver vendor refuses to pay the assessment, post a bond, or register for a license.
The State of New Jersey has conducted a similar program for more than six (6) years with great success in increasing enforcement and tax compliance with out-of-state vendors doing business in their state.
If you would like additional information on this topic or have any questions, please contact James Privett, Regional Vice President - Sales & Use Tax Group at (615) 373-8373. E-mail jprivett@thesaltgroup.com
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