Form Rev-958 Ep - Use Tax Voluntary Compliance Program printable pdf download

USE TAX VOLUNTARY COMPLIANCE PROGRAM

QUESTIONS AND ANSWERS

How do I calculate penalty and interest under the Use Tax Voluntary Compliance Program?

Under the Use Tax Voluntary Compliance Program, penalties will be waived if a return and payment is postmarked by

the due date identified in the upper right-hand portion of the use tax letter from the department.

If you file and pay use tax after the due date, the penalty is 5 percent of the unpaid tax for each month or fraction of

a month from the original filing date of the return. The maximum penalty is 25 percent of the unpaid tax, and the

minimum penalty is $2.

Interest is calculated on a daily basis using an annual interest rate that varies by calendar year. The formula is:

Interest = Late or Unpaid Tax X Number of Days X Applicable Daily Interest Rate. You can calculate penalty and

interest by using the Penalty and Interest Calculator available on the department’s website. A summary of interest

is available on REV-1611, Notice of Interest Calculations.

Is use tax a new tax?

Pennsylvania first imposed the use tax in 1953. All states that impose a sales tax also impose use tax. All businesses

and individuals who incur use tax liabilities have obligations to file and pay the tax in a timely manner. Credit is

granted for sales tax paid to other states.

If you or your business buy items subject to sales tax and do not pay the seller sales tax for these items, you are

responsible for remitting use tax directly to the PA Department of Revenue on the full purchase price.

If I do not register for use tax will I be fined?

No. However, businesses that fail to timely remit use tax incur interest and penalty on their use tax liabilities. Businesses

that incur use tax liabilities on a regular basis are encouraged to register for use tax accounts by completing the

PA Enterprise Registration Form (PA-100). Non-recurring use tax liabilities should be reported on the Use Tax Return

(PA-1). Businesses already registered for sales tax may report use tax liabilities on their sales tax returns.

Does an organization with a sales tax exemption number beginning with “75” have to respond to the use

tax letter?

Yes. These organizations incur use tax on taxable items used in an unrelated trade or business; certain construction

materials; and tools and equipment, such as lawn mowers. An organization with no use tax liability should file the

return showing zero tax due.

Will I be audited if I do not reply to the use tax letter?

The department can identify those who owe use tax by methods including routine audits, complaints, investigations

and purchase lists provided by vendors and other states. The department can also identify businesses that under-

report use tax. Failure to respond to the department’s letter may subject a business to an audit of financial records.

Additional questions and answers can be found on the department’s website,

Bureau of Enforcement Planning, Analysis & Discovery l PO Box 280437 l Hbg PA 17128 l 717.214.7287 l

REV-958 EP (04-11)

Form Rev-958 Ep - Use Tax Voluntary Compliance Program