PA Sales Tax Information

Payment of Sales Tax when Items are Purchased for Resale 

When any organization, business, small business, etc. purchases items with the intention to re-sell that entity is not required to pay sales tax.

The reason: Pennsylvania Sales Tax is paid by the “END-USER.”

 If a club buys plants to resell, the club is NOT the end user. The “END-USER,” is the customer who buys the plants for personal use.

 Therefore, when we buy items to be resold, we need to give the store, nursery, etc.  Form REV-1220 stating the items are to be resold. We do not pay sales tax on our purchase. We do not need to be tax exempt to benefit from this tax law.

The form to be given to the vendor, store, nursery, etc 

 The REV-1220 is the PENNSYLVANIA EXEMPTION CERTIFICATE.

 The link to the form is: Pennsylvania Exemption Certificate

This form is set up for you to fill in.

Please review these directions for completing this form:

• Top of the form. CHECK ONE The first choice is the correct choice:  State or Local Sales and Use Tax
• The section below the black line CHECK ONE:  If you are using the form for a one-time purchase, mark the first box for “unit” exemption.
• If you wish to have your form on file at a local nursery, for example, mark the second box: "blanket" exemption.
• Enter the name of the vendor, nursery, store, etc. and the address.
• Skip the “NOTE” section. It does not pertain to us.

Next you will see 7 boxes.

• Skip box 1.
• Skip box 2
• Mark box 3.  If you do not have a Sales Tax License (you do not collect sales tax) enter N/A for License Number 
• Skip box 4 unless you have completed the REV-72 Sales Tax Exemption Application and have been granted exempt status by PA and have the exemption number beginning with 75- 
• Skip box 5,6
• Mark box 7 and state that you are not required to collect sales tax because all three of the criteria have been met.

The three criteria are as follows:

1. You have only isolated sales, three or less per year,

2. You work on the sales 7 or less days total.

3. Your sales do not compete with others who are required to collect sales tax.

Please note:

• If you do not meet the three criteria, you should be collecting sales tax.
• If you are not collecting, then you must pay the tax when you buy the items.  

A member of the club authorized to purchase items on behalf of the club must sign the form.

The club must make the payment directly. Use a club check, NOT a personal check!

The club member is NOT to pay for the items and then later request reimbursement because this does not constitute a valid tax-exempt sale.

If you have any question or require additional assistance, call Judy Rach 814-352-7882

Sales Tax Exemption--Pennsylvania Sales Tax  

This information is taken directly from the PA Dept. of Revenue site.

In order for an organization to be exempt from paying sales tax on items it purchases, it must be deemed a "charitable organization" as defined in the Pennsylvania Code. The organization must meet the five criteria A through E below.  

A Charitable organization is:

An organization whose primary activities meet the following criteria--

The organization:

A. Advances a charitable purpose. An organization advances a charitable purpose if it makes gifts of services or property for general public use that are designed to benefit an indefinite number of persons from an educational, religious, moral, physical or social standpoint.

B. Donates or renders gratuitously a substantial portion of its services. A substantial portion of the organization’s services shall be provided without charge to the subjects of the charity or to persons or entities that are directly providing the service on its behalf. The Department will determine whether the portion donated or rendered is substantial on an organization-by-organization basis. The word ‘‘substantial’’ does not imply a magical number.

To determine if an organization meets this criterion, the Department will examine the remuneration paid to its director and staff, the organization’s budget and the percentage of income used to provide charitable services in addition to other factors. In examining these factors, the Department will consider the type of charitable services provided, the location of the organization, the length of time the organization has been in operation and the cost of providing its charitable services.

C. Benefits a substantial and indefinite class of persons who are legitimate subjects of charity. An organization’s gratuitous activity shall be ‘‘purely public,’’ in that the public must be the beneficiary of the gift conferred by the organization. The scope of the recipients can be limited to a particular group of the public, so long as the group is a legitimate subject of charity. Legitimate subjects of charity are those that are unable to provide for themselves what the organization provides. Examples include the handicapped, the aged, the sick, children, and the poor.

D. Relieves the government of some of its burden.

E. Operates entirely free from private profit motive. An organization is not deemed to have a private profit motive merely because it hires employees and pays them reasonable compensation, or otherwise purchases at market rates other services that are required to carry out the charitable activity. The fact that an organization’s charitable activities generate surplus funds will be deemed by the Department to constitute evidence of a private profit motive, unless the surplus funds are reinvested to aid legitimate subjects of charity. Surplus funds reapplied to the maintenance and operation of a facility or to retire outstanding debt is not evidence of a private profit motive.  

If your club wishes to be considered for sales tax exemption, the application form is available here.

PA Sales Tax Exemption Application--Rev 72 AS (11-06)

It is strongly suggested that you visit the PA Dept. of Revenue's website at the link above to read the entire page of information before proceeding.

Also note that not all purchases are non-taxable even to an exempt organization.

 If you plan to proceed I am available to assist you.

Judy Rach 814-352-7882

PA Department of Revenue Sales Tax Collection

and Remittance

Registration

 If your club is required to collect sales tax you must register with Pennsylvania using the PA-100 form.  This form is online at the following link.

 Link to PA 100 Business Registration for Sales Tax

There are two options for you at this site. Either one will allow you to accomplish the registration.

Remember, you are only registering for Sales and Use Tax at this point.

 If you have already opened an account with PA Dept of Revenue and already collect sales tax, DO NOT USE THIS FORM.

 Call Judy Rach and we will determine where you need to begin. 814-352-7882

Collection and Remittance

 Once you have registered you will need to collect and remit the tax to the PA Department  of Revenue

You will do this by going to the link for e-Tides

You must chose a password for this site. Please document it so the future treasurers will have the same access.

Note: For those of you who do not wish to permit the PA Department of Revenue access your checking account,  you may complete the form online but mail the payment via U.S. Mail.

Change of Information Form

 When you have a change of officers, you should complete the form REV 1705r

PA Rev Form 1705r

License Cancellation Form

 If you believe you do not require the Sales Tax License you currently hold you may cancel it by using the form REV 1706

PA Rev Form 1706