Detailed Pennsylvania Development
The Pennsylvania Department of Revenue recently released Sales & Use Tax Bulletin 2021-03, which addresses the taxability of “remote help supply services.” Under Pennsylvania law, sales and use tax is imposed on employment agency services and help supply services. Help supply services are defined as “[p]roviding temporary or continuing help where the help supplied is on the payroll of the supplying person or entity, but is under the supervision of the individual or business to which help is furnished.” Examples of help supply services include temporary office service providers, fashion modeling services, or labor pools. However, the statute specifically excludes any “human health-related services, including nursing, home health care, and personal care.”
In the bulletin, the Department clarified that to determine if the tax applies, the taxpayer must look to where the delivery or use of the service occurs. The Department specifically stated that the status of the person, whether remote or in person, is not determinative. If the delivery or use of the service occurs within Pennsylvania, the services will be subject to the sales and use tax. The Department provided several potential scenarios in which the tax applied. For example, a purchaser of help supply services located in Pennsylvania will be subject to the sales and use tax regardless of whether the employee is remote or works in person because work was “delivered and used where the purchaser is located.” In all the examples provided, the Department highlighted that it was where the delivery or use of the service occurred that subjected the help supply service to sales tax. Finally, the Department noted that it presumes that delivery occurs in the state, regardless of in-person or remote status, unless documented otherwise.
Please contact Mark Balistrieri with questions on Buletin 2021-03.
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