I will soon introduce legislation to eliminate the Accelerated Sales Tax (AST) Prepayment requirement for businesses collecting sales tax for Pennsylvania.

To plug a budget hole during the Rendell administration by recognizing sales tax collections that would have otherwise been recorded in the next fiscal year, more than 14,000 businesses were subjected to AST Prepayments.

Rather than remit sales taxes collected in a given month by the 20th of the next month, as required by law up to that point, under AST certain businesses must now also make a prepayment of that month’s sales tax collections within the very same month.

Businesses with an actual sales tax liability of $100,000 or more for the third quarter of the previous year must remit 50 percent of the actual tax liability for the same month of the previous year, even if their tax collections have declined. Businesses with an actual tax liability for the third quarter of the previous year of at least $25,000 but less than $100,000 can remit either 50 percent of the actual tax liability for the same month of the previous year or at least 50 percent of the actual tax liability for the current month (which, of course, is necessarily an estimate because the current month is not over by the 20th due date).

Recognizing the burden that complying with AST prepayments creates for businesses, the Wolf administration waived this requirement from April through June 2020 as part of its Covid-mitigation efforts.

Because of the one-time fiscal impact of shifting what would have been June’s prepayments into July, with the Commonwealth’s current sizable reserve fund balance, now is the perfect time to reverse this budgetary gimmick for good and repeal the requirement for Pennsylvania businesses to prepay their sales tax collections.

Certainty and ease of compliance in tax and regulatory policies are top considerations as businesses evaluate staying in or moving to Pennsylvania. Eliminating AST Prepayments will promote simplicity in the tax code and allow businesses to get back to remitting their actual sales tax collections by the 20th of the following month.

Please consider joining me as a co-sponsor of this legislation.

Statutes/Laws affected:
Printer's No. 781 (May 12, 2025): P.L.6, No.2