There is a new line on the 2011 PA tax return that must be completed by every PA resident. Line 25 reports Use Tax, which is the counterpart of Sales Tax and applies to taxable purchases made over the internet, through toll-free numbers, from mail order catalogs and from out-of-state locations where sales tax was not charged and collected by the seller. The use tax rate is the same as the PA sales tax rate; 6%. It is PA's attempt at mandatory compliance of remitting PA sales tax for untaxed out of state purchases that would be subject to sales tax if purchased in PA. Every PA resident is personally responsible for remitting the use tax directly to the PA Department of Revenue.
This isn't a new law;
it's enforcement of current law.
Examples of taxable items include the following: antiques, paintings, appliances, books, stationery, computers, exercise equipment, formal clothing, furniture, furnishings, jewelry, luggage, handbags, musical instruments, office equipment, souvenirs, televisions, radios, stereo equipment, video equipment and camera equipment. Examples of taxable services include lawn care, pest control, self-storage, building cleaning and maintenance services such as housekeeping services.
Purchases are reported in 2 categories; individual purchases less than $1000 and individual purchases over $1000. For individual purchases less than $1000 you have the option of providing detailed purchase information or using the optional use tax table provided by PA Department of Revenue to calculate your use tax liability based on taxable income. For individual purchases over $1000 you must provide detailed purchase information and itemize the purchases. Your use tax liability will be calculated on the taxable purchase amount.
If you paid some sales tax on items - for example sales tax paid at a lower rate paid to another state - you may offset your use tax liability by the sales tax already paid.
For detailed information on use tax reporting responsibilities and options, visit: www.revenue.state.pa.us/usetax.
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