Hess Supports Business- Friendly Sales Tax Collection Method
Rep. Dick Hess ( R- Bedford/ Fulton/ Huntingdon) has sponsored a bill that will repeal a government mandate requiring businesses to remit Sales and Use Taxes to the commonwealth twice a month, as opposed to once a month as they are currently required to do. The bill passed the House Finance Committee unanimously Monday.
“As of June 1, a law passed in 2009 requiring bimonthly Sales and Use Tax payments will take effect, and I don’t think many businesses are prepared for this new mandate, which could increase accounting costs and time spent doing paperwork,” Hess told the committee. “Some small business owners may not be computerized or be able to budget additional time necessary to process and submit sales tax receipts twice each month.”
This new provision was included in Act 48 of 2009, an omnibus Tax Reform Code bill. The intent was to provide the state with an accelerated process for Sales and Use Tax (SUT) payments collected by businesses. As agents for the state, businesses are required to remit them in a timely fashion. Currently, sales tax collections must be sent to the state once a month and vendors receive a 1 percent discount for timely filing.
This section of that 2009 law is taking effect after May 31, meaning a sales tax licensee would have to submit an estimated tax midmonth that reflects the total tax they paid to the state in the third calendar quarter of the preceding year if it equals or exceeds $25,000, and then at the end of the month they would submit an adjusted payment to round out the actual SUT collected for the full month.
“Some businesses might experience higher accounting costs as a result, or could be forced to allocate additional hours of administrative time to comply with this mandate,” said Hess. “It is advantageous to many businesses to go through this process once a month, rather than twice.”
The bill will be next go to the House Appropriations Committee for consideration. If passed by the House and Senate and signed into law, it would take effect immediately.