The SALT Report

New York – Sales Tax Responsibilities

Fri, 24 Feb 2012 12:28:00 -0800

SALT Report 1411 - The New York Department of Taxation and Finance issued a tax bulletin that provides information for businesses regarding their sales tax responsibilities.

Registration

Every person who sells taxable tangible personal property or taxable services must register with the Tax Department before beginning business. In some cases, sellers of taxable property or services are presumed to be sales tax vendors and are required to register and collect state and local sales taxes.

Business can register through the Online Permit Assistance and Licensing (OPAL) website. This will allow you to submit your application for a Certificate of Authority online which you must apply for at least 20 days before you begin operating your business or before purchasing assets of another business.

Buying an Existing Business

If you are buying or acquiring the business assets of an existing business do not pay the seller until you contact the Tax Department. The Department will check to see if the seller owes any taxes. Failure to do so may make you liable for the seller’s sales tax debts.

Collection of sales tax

Once you register for sales tax purposes, you become a trustee for New York State. As a trustee you:

Have a responsibility to collect the proper amount of sales tax from customers and to pay the tax you have collected to New York State with your sales tax return

Must pay the full amount of sales tax that you collect or that you are required to collect, even if you haven't yet been paid the tax by your customers

Should maintain a separate bank account for sales tax receipts, and

Should never use the sales tax money you collect to make other purchases or to pay any of your business or personal expenses

New York Tax Law imposes personal responsibility for the payment of sales and use taxes on the responsible persons of a business. Responsible persons can be owners, officers, directors, employees, partners, or members of a business. Being personally liable means that the Tax Department can take your personal assets to satisfy the outstanding sales and use tax liabilities of the business.

Filing Sales Tax Returns

Once you are registered for sales tax purposes in New York, you must file sales and use tax returns quarterly, monthly, or annually with the department. Sales Tax Web File is a fast and easy way to file sales and use tax returns and make payments. Quarterly and monthly sales tax filers are required to Web File, as are annual filers beginning with the return due March 20, 2012.

Failure to keep adequate records

If your records are considered inadequate, you may be subject to:

An estimated audit methodology to determine if the correct tax was reported on your sales tax returns,

Penalties and interest if additional tax is found to be due, and

Criminal penalties if you willfully failed to maintain proper records.

You may also have your Certificate of Authority suspended or revoked. If that happens, you will no longer be allowed to make taxable sales of tangible personal property or services, or tax-exempt purchases in the state.

For Further Information:

The SALT Report

New York – Sales Tax Responsibilities

California - Use Tax Reporting Guide

Pennsylvania - Keystone Opportunity Zone Act Amended

Missouri – Taxability of HVAC & R Systems

Washington – Taxability of Private Spirits Sales

New York - Updated NAICS Codes

Missouri - Sales of Medical Products to Heal Musculoskeletal Injuries are Taxable

Georgia - 2012 Return and Remittance Due Date Calendar

Arizona – Tax Forms Now Contain Use Tax Reporting Line

West Virginia – Direct Pay Permits and Recordkeeping Rules

Utah – Taxability of Optional Fuel Charges on Car Rentals

Virginia - Tax Collection Requirements for In-State Warehouses

Kansas - Taxability of Cloud Computing Transactions

Colorado - Statutes of Limitations

Colorado - Tax Due Dates

Colorado – Sales Tax Information for Out of State Businesses

Ohio - Rule on Amnesty Payment Plan Issued

Arizona - Incorrect Date Printed on TPT1 Form

New York - Exemption for Electronic News Services and Periodicals

Nevada - Taxability of Vitamins, Dietary Supplements and Energy Drinks