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PA tax law wallops man who bought truck before moving

By   /   February 2, 2015  /   No Comments

By Andrew Staub | PA Independent

HARRISBURG, Pa. – When it came time last year to move his family back to Pennsylvania from North Carolina to care for aging relatives, Jeffrey Sutton bought a larger truck to haul their belongings.

Sutton never realized a bigger truck would leave him with a bigger tax bill once he returned to the Keystone State a few months after buying it. But that’s what happened when he went to get his new license plate.

Even though Sutton paid North Carolina’s 4.75 percent sales tax on the truck, Pennsylvania law requires he pay the difference between the two state’s rates. Pennsylvania has a 6 percent sales and use tax, so Sutton had to fork over about a grand to make up the gap, he said.

“That’s double taxation,” Sutton said.

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TRUCKED BY TAX: Jeffrey Sutton got hit with a big tax bill when he moved to Pennsylvania, all because he had bought a new truck within six months of moving.

Sutton, who now lives in Union Township, didn’t keep quiet. He approached his local lawmaker, state Sen. Elder Vogel, R-Beaver, about the situation. In turn, Vogel plans to introduce legislation that would make sure nobody else runs into a similar situation.

Vogel proposes exempting vehicles from the law requiring that sales and use tax be applied to cars and other tangible goods bought out-of-state by nonresidents who move to Pennsylvania within six months of the purchase.

The provision, Vogel said, is an impediment for people who might want to move to Pennsylvania to do business or to retire.

“You’re penalized for buying a new car, basically,” said Vogel, who is circulating a memo calling the law “unfair and uninviting.”

The same law applies to good such as boats, trailers and aircraft, but Vogel is focusing on vehicles because they are ubiquitous in today’s world, he said.

New residents must pay the tax as part of the title and registration process. Pennsylvania collected more than $269,600 in sales tax from 858 such vehicles in 2014, said Elizabeth Brassell, press secretary for the Department of Revenue. Residents receive a credit for sales tax paid in another state.

The law intends to keep people from making purchases in states with lower taxes and then bringing the goods back to Pennsylvania, said Nathan Benefield, vice president of policy analysis with the Commonwealth Foundation, a free-market think tank in Harrisburg.

Technically, Pennsylvanians are also supposed to pay sales and use tax for goods bought online, where the state’s sales tax isn’t charged, but few people actually report such purchases, Benefield said.

“It is generally ignored and unenforceable, except in the case of vehicles sales — one because it is easier to enforce with registration and, two, because that is a big purchase/tax that people would actually cross the border to avoid,” Benefield said.

Sutton, who said he is on disability, believes people are taxed enough already. While he understands why the state wouldn’t want residents to buy an expensive car outside of Pennsylvania to take advantage of lower rates, he said his situation differs.

Now, he’s hoping Vogel has success with his proposed legislation and that other people who move into the Keystone State don’t find themselves facing an unexpected tax bill.

“I know nothing can be done for me now,” Sutton said, “but if this would help other people moving into the state, hurrah.”


Andrew formerly served as staff reporter for Watchdog.org.