Pennsylvania offers voluntary tax compliance program for retailers with inventory in the state
The Pennsylvania Department of Revenue is currently offering a Voluntary Compliance Program that is set to run through June 8, 2021. This program is intended for “any business that has inventory or stores property in Pennsylvania but is not registered to collect and pay Pennsylvania taxes.” Participating taxpayers will not be liable for taxes owed prior to Jan. 1, 2019, and will also be provided with penalty relief for “any non-compliance of past due tax returns that were not filed and taxes that were not paid.”
How does the program work?
To participate in the Voluntary Compliance Program, a business must complete the online Physical Presence Business Activity Questionnaire (BAQ), or may print and complete a .pdf paper version of the Questionnaire, which can be emailed to email@example.com or faxed to 717.425.2952.
The Department will review each application and will contact the business “to discuss how to become compliant.” Penalties will be abated after the business has registered, filed any tax returns past due, and remitted payment of past due taxes. Penalty relief “is conditional on the business continuing to maintain tax compliance with the Department,” the Department states.
What does CohnReznick think?This program is a way for businesses to limit any potential historical liability with the State of Pennsylvania. Therefore, if a business is not registered for taxes with the Pennsylvania Department of Revenue and is currently storing inventory and property in the state, then the business should determine if it makes sense to apply.
Subject matter expertise
JD, Principal, Practice Leader, State and Local Tax (SALT) Services
Director, State & Local Tax
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