Sales Tax Prepayments

The PA Department of Revenue has announced that businesses that collect Pennsylvania sales tax will not have to make accelerated sales tax prepayments in April, May or June. Businesses that normally have a monthly prepayment requirement will not be charged penalties for missing the prepayment deadline during this three-month period.

Under this new scenario, the Department is asking businesses to simply remit the sales tax that they collected during the prior month. The due dates to remit sales tax will be April 20, May 20 and June 22, which follows the standard due dates for monthly filers who have no prepayment requirement.

Tax Impact of Employees Temporarily Working from Home

As reflected in Q&A’s available in its Online Customer Service Center, the Department of Revenue has indicated that, when making Corporate Net Income Tax and Sales Tax nexus determinations, it will not consider employees that are temporarily required to telework due to COVID-19.  That is, the presence of employees temporarily working at home in Pennsylvania due to the pandemic will not create nexus for businesses that otherwise do not have nexus with Pennsylvania.

The Department also provided information regarding the tax treatment of those employees temporarily working at home in other states.  If an employee who normally works from home in Pennsylvania and receives Pennsylvania-sourced compensation works from home in another state temporarily due to the COVID-19 pandemic, the Department will not consider that as a change to the sourcing of the employee’s compensation.  That is, according to the Department, the employee’s income would remain Pennsylvania-sourced income for all tax purposes, including PA-40 reporting, employer withholding tax and three-factor business income apportionment purposes for S corporations, partnerships and individuals.