Legislation would repeal prepayments for sales tax

Legislation soon to be introduced in the state House of Representatives would repeal the requirement for businesses to remit “prepayments” for their sales tax collections.

The Accelerated Sales Tax Prepayment requires businesses with tax liabilities over $25,000 for the third quarter of a previous year to remit prepayments for their collected sales tax.

If liabilities are more than $25,000 but less than $100,000, prepayment must be equal to either 50 percent of the actual tax liability for the same month of the previous year or a minimum of 50 percent of the actual tax liability for the current collection period.

For liabilities over $100,000, the prepayment must be equal to 50 percent of the actual tax liability for the same month of the previous year.

The bill would repeal this prepayment requirement and allow businesses to remit collected sales tax revenues in accordance with their designated filing period.

“It is often cited how complex and onerous Pennsylvania state tax law can be to navigate, particularly for our business community,” state Rep. Jesse Topper (R-Bedford/Franklin/Fulton), who plans to introduce the bill, said. “It’s time we make this change to eliminate the prepayment requirement to help foster an economic environment in which businesses want to locate and grow, thereby benefitting our constituents and communities.”

Topper is seeking co-sponsors for the bill.