More of the Small Business Resource Guide
Establish a segregated bank account for sales taxes. NYS Tax Department encourages all sales tax vendors to voluntarily establish a separate bank account for sales taxes that they collect on behalf of New York State to make it easier to comply with the tax law. To improve sales tax compliance, they can require certain sales tax vendors to deposit sales tax into a separate bank account. This tax law change was effective March 31, 2011.
Sales Tax Filing Responsibilities
A sales tax return is still required to be filed, if a registered vendor, did not collect any tax for the tax period in question. Vendor Collection Credit (currently at 5% of tax payable except monthly filers with a maximum of $200 )
Sales Taxes are trust taxes – A responsible person can be held personally liable for payment of taxes.
If a business ceases doing business, they must file a final sales tax return and return the Certificate of Authority to the Department.
Sales Tax Exemptions
Manufacturer’s exemption – Must be a registered sales tax vendor - Publication 852
Farmer’s Exemption – ST-125
Not for Profit Exemptions – The not for profit agency 501(c)(3) must apply on form ST-119.2
Recordkeeping Requirements for Sales Tax (TB-ST-770)
What records to be kept
How long to keep records
Maintaining records electronically
When records are considered inadequate
Consequences of inadequate records
NEW: Web video explaining record keeping requirements
How long do I keep my records?
You must keep all of your records for a minimum of three years from the due date of the return to which those records relate, or the date the return is filed, if later.
However, the statute of limitation does NOT apply for any period for which an individual failed to file a return or filed a fraudulent return.
You must make the records available to the Tax Department upon request.
New Hire Rule
All employers must report to the New York State Tax Department certain identifying information about newly hired employees working in the state within 20 calendar days of the hiring date.
GENERALLY, a worker who performs services for a business is an employee if the business can control what will be done and how it will be done.
NYS follows the federal guidelines (conformity) regarding employer/employee relationships and the definition of an employee, contractor or self employed individual
Sales Tax e-filing Mandate for Businesses
If a business meets all of the following conditions the business is required to E-file and E-pay the sale tax on the
• Prepare their own return;
• Use a computer to prepare, document or calculate any of the sales tax schedules;
• and Have broadband internet access
Must first create an Online Service Account (demos and videos are available)
For more information: http://www.tax.ny.gov/bus/efile/elf_busn_mandate.htm
Voluntary Disclosure & Compliance Program
Under the Tax Department’s new Voluntary Disclosure and Compliance program, eligible taxpayers who owe
back taxes can avoid monetary penalties and possible criminal charges by:
• telling the Department what taxes they owe;
• paying those taxes; and
• entering an agreement to pay all future taxes.
The Voluntary Disclosure and Compliance Program covers ALL taxes administered by the Tax Department.
New York State Tax Credits for Businesses
• Designed to promote economic development, create jobs, stimulate capital investment, encourage revitalization of
• Broad range of tax credits underscores the state’s commitment to attract and foster growth in business community
• For more information visit:
for income taxes (includes flow through entities).
for general business corporations.
courtesy Suzanne Reusch
Taxpayer Service Specialist
New York State Department of Taxation and Finance