Pennsylvania economic nexus threshold

Affiliate nexus

Pennsylvania recognizes click-through and affiliate nexus when a remote seller has a contractual relationship with an in-state entity or individual whose website contains a link encouraging purchases from the remote seller and the in-state party receives compensation based on those referrals. An affiliated person is defined as any entity with a direct or indirect ownership interest exceeding 5%.

Pennsylvania also separately codifies referrer nexus for platforms that connect buyers and sellers without directly collecting payment. A referrer that crossed the $10,000 threshold before July 1, 2019 was required to collect and remit or comply with notice and reporting requirements. A referrer that exceeds $100,000 in Pennsylvania sales after July 1, 2019 is subject to the mandatory collection obligation under Act 13 of 2019.

Physical nexus

Under 72 P.S. § 7201(b) and SUT Bulletin 2011-01, Pennsylvania physical nexus arises from maintaining any office, warehouse, distribution house, sales house, service enterprise, or other place of business in the state, whether owned, rented, leased, or maintained directly or through a subsidiary, agent, or representative. Employees who own, rent, use, or maintain a Pennsylvania office or place of business also establish physical nexus, as do agents, independent contractors, brokers, or representatives who are regularly and systematically present in the state.

Storing inventory at a Pennsylvania fulfillment or distribution center creates physical nexus. This expressly includes FBA arrangements and other third-party warehouses regardless of whether the warehouse also stores goods for other sellers. Entering Pennsylvania to service, assemble, install, or repair tangible personal property likewise creates nexus.

One exception applies: merely having property at, or employees visiting, an unaffiliated commercial printer in Pennsylvania does not create nexus.

Trailing nexus

Pennsylvania has no formally codified trailing nexus period. Under the rolling 12-month lookback, once a seller's trailing 12-month Pennsylvania gross sales fall at or below $100,000, the economic nexus obligation ends at that point with no mandated hold-over window. The SUT Audit Manual notes that continued collection is encouraged but not required once sales fall below the threshold; however, the SUT Audit Manual is a reference tool and is not legally authoritative.