Online Advertising, Including Click-Thru, Does Not Establish PA Nexus


[author: James L. Fritz]


With Pennsylvania’s September 1 deadline approaching for the commencement of sales tax collection by online vendors having in-state affiliates or PA-based website sales agents, the Department of Revenue issued a letter ruling on August 28 clarifying the line between online solicitation and mere advertising.  The ruling indicates that simply having ads on a PA website does not equate to in-state solicitation by a representative that would create nexus for the advertiser.

Furthermore, nexus is not created even if the ad includes a link to the website of the seller, so long as the host of the click-thru ad is not compensated on the basis of sales generated.  If compensation is based on a percentage of sales generated, the seller will have nexus and be required to collect PA sales tax.

In a press release issued August 30, Secretary of Revenue Dan Meuser was quoted as saying, “We are very pleased with the response we received from e-commerce companies so far.”  With multiple sources reporting that is complying, it would appear that Pennsylvania’s mainstreet retailers may  have a more even playing field for the prime fall selling season.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McNees Wallace & Nurick LLC | Attorney Advertising

Written by:


McNees Wallace & Nurick LLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.