While Black Friday has become one of the busiest in-person shopping days of the year, Cyber Monday, the Monday after Black Friday, has become the busiest online shopping day of the year. But, the Pennsylvania Department of Revenue is reminding residents that those internet purchases are not tax-free.
Department of Revenue Secretary Dan Meuser said many online retailers don't collect use tax, and some even claim products can be purchased online tax-free, which he said is not the case.
"When sales tax isn't collected by the seller on a taxable item or service, it becomes the purchaser's responsibility, by law, to report and remit the use tax," he said.
Starting with tax year 2011, the Revenue Department is simplifying the process for reporting the tax. A new use tax line will be added to the PA-40 Pennsylvania Personal Income Tax Return, and taxpayers can report the tax using padirectfile, Fed/State e-file, or the paper PA-40, starting in January.
Meuser said that collecting the tax is simply a matter of fairness.
"Pennsylvania businesses, those who employ our residents, who pay state and local taxes and support our communities, are put at a 6 percent or 7 percent or 8 percent competitive disadvantage against out of state businesses when sales or use tax is not paid on taxable items purchased online," he said.
An estimated $380 million in use tax revenue was lost to online sales last year.
Taxpayers can find more about the use tax, including resources for determining when the tax is due and instructions for remitting the tax at the Revenue Department's website.