A new sales tax policy will affect the expanding business of online retailers based in or operating out of Pennsylvania - including Web giant, Amazon.

The Pennsylvania Department of Revenue recently announced a directive aimed at clarifying existing state sales tax laws in order to collect $380 million of unpaid sales taxes annually.

Under the new laws, retailers that store goods in Pennsylvania warehouses will be required to collect sales taxes for the state, even if another firm owns or operates the storage facility.

The state will additionally consider a remote seller to have "nexus" - and tax liability - in the commonwealth if the seller is linked to any websites of others inside the state. This nexus rule also applies if a seller or its affiliates provide services within Pennsylvania - including delivery, repair and more. Any retailer that advertises on Pennsylvania-based websites will also have nexus.

News reports have said the initiative is pointed directly at Amazon.com. The online mega retailer - with several distribution centers housed in Pennsylvania - is not currently remitting sales taxes to the state.

The director of a trade organization for online businesses was quoted in a news report saying he believes most retailers to which the new directive applies will end their contracts in the commonwealth and pull their advertising to out-of-state websites.

In New York, Illinois and elsewhere, Amazon has done this - terminated relationships with its affiliates to avoid paying taxes. However, Amazon has organized deals with Tennessee and California to collect taxes from sales in those states.

The local business community is reportedly pleased with the new policy, satisfied that e-commerce retailers will be held to similar tax obligations as brick-and-mortar shops.

Companies who hold nexus in Pennsylvania must become licensed to collect sales tax no later than by Feb. 1. A failure to register could result in a number of penalties - from tax assessments, audits and leans, to prosecution from the state attorney general.

If a company with nexus deliberately disregards their sales tax obligation, the Department of Revenue has the authority to audit and assess at least three years back.

Source: PA Independent, "New online sales tax policy could boost state revenues," Eric Boehm, Dec. 5, 2011