State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

Brought to you by:

New-York (NY)

NY Sales Tax - Name of Tax and General Application:

New York imposes a tax on sales of tangible personal property or services at the retail level in the state. This tax is called a "sales tax". Another tax is imposed on the use of tangible personal property or taxable services within the state. This tax is called a "use tax" but only applies where the goods or services have not already had sales tax collected.

NY Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

New York law imposes nexus on retailers that maintain a post office box in New York. Furthermore, in 2008, New York became the first state to further extend its definition of nexus to cover some web-only retailers. These retailers must collect sales tax if they have sales affiliates in the state that generate a combined total $10,000 a year or more in revenue for the retailer (sales affiliates receive paid commissions for linking to the online retailer's web site). Web-only retailers should not have nexus in this instance, but until the law is litigated, there is no clear answer. An exercise in caution suggests that web-only retailers should collect sales tax until a definitive answer is available.

NY Local Tax - Do Localities Impose Tax?

Yes, New York imposes local sales tax.

NY Resale Certificate Renewal Agreements:

Sales in New York are considered excluded from tax when they are done with the intent to resell and a completed resale certificate is presented by the purchaser to the seller. A seller who collects a resale certificate is relieved of the obligation to collect tax.

NY Resale Certificate Renewal Periods

No expiration period is specified.

NY Statute of Limitations

The later of three years from: the date the return was due or the date the return was filed. There is no limitation in cases of fraud or when no return is filed.