New York SBDC Research Network

From Avalara Understanding where your company has nexus is an integral part of your sales tax compliance strategy because nexus dictates where your business is required to collect and remit tax. There are a lot of business activities that can cause your business to have nexus, but one is getting a lot of attention from states right now because it was at the forefront of the Supreme Court of the United States (SCOTUS) case South Dakota v. Wayfair, Inc. Sales tax nexus is the connection between a seller and a state that requires the seller to collect and remit tax on sales made in that state. Historically, nexus was based on physical presence. After the Wayfair decision, nexus can now also be established based on economic activity. If you have sales tax nexus in California and Texas, for example, you must collect and remit sales tax in California and Texas. Unfortunately, you can’t just figure out where you have nexus today and forget about it — you must closely monitor nexus on an

From the New York State Department of Taxation and Finance Whether sales of a particular good or service are taxable may depend on many factors. Sales of tangible personal property are subject to New York sales tax unless they are specifically exempt. The term tangible personal property means any kind of physical personal property that has a material existence and is perceptible to the human senses (in other words, something you can see and touch). Sales of services are generally exempt from New York sales tax unless they are specifically taxable You should not collect sales tax on exempt sales that do not require an exemption document. However, for sales that require an exemption document, you must collect sales tax unless you receive a properly completed exemption document from the purchaser.

From eMarketer The 26-year-old law that exempted online retailers from collecting sales tax in states where they have no physical presence has been overturned, per a US Supreme Court ruling Thursday. This practice was a holdover from a 1992 case, Quill Corp. v. North Dakota, when ecommerce looked very different from today. States looking to make up lost revenues have been pushing for reform for years. This case was brought by the state of South Dakota, but it has greater implications for the 45 states that rely on sales tax, as well as online retailers like Wayfair, Overstock.com and Newegg.com (all were involved in this case) that have argued that tax collection would be a logistical challenge and an unfair burden, particularly on smaller merchants.

Ever wonder how New York State decides how the state decides whether the application of sales tax is appropriate in specific situations? Here are the NYS Division of Tax Appeals, the Sales tax advisory opinions for 2015 , with previous years available as well. An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts set forth therein and is binding on the Department only with respect to the person or entity to whom it is issued and only if the person or entity fully and accurately describes all relevant facts. An Advisory Opinion is based on the law, regulations, and Department policies in effect as of the date the Opinion is issued or for the specific time period at issue in the Opinion. TSB-A-15(48)S Petitioner asks whether a subcontractor should collect sales tax on its charges for various services to a prime contractor where the prime contractor’s customer is an exempt organization. TSB-A-15(47)S Petitioner asks whether it has Nexus w

Retailers should be sure to register with the Tax Department and obtain a Certificate of Authority . "Your application (for a Certificate of Authority) will be processed, and, if approved, we'll mail your Certificate of Authority to you. You cannot legally make any taxable sales until you have received your Certificate of Authority." Based on the literature, I would HIGHLY recommend AGAINST using ZIP Codes alone for trying to determine sales tax, since ZIP Codes cross county boundaries. One needs to charge at the rate of the jurisdiction served . Is the item taxable? Probably . There are some free sales tax calculator online, e.g. TaxRates.com and Pitney Bowes for the US; NYS Tax Department and Earth Odyssey for New York only; there are undoubtedly others. And of course, there are paid sites, such as Strike Iron and the Sales Tax Clearinghouse . One can also Google sales tax calculator software and find a ton of these for sale. These, though, will not make t

This publication is a comprehensive guide to New York State and local sales and use taxes for businesses that sell taxable tangible personal property, perform taxable services, receive admission charges, or operate a hotel or motel, and restaurants, taverns, or other establishments that sell food and drink . For basic, easy-to-understand explanations of particular sales tax topics, see the sales tax bulletins, available on the Tax Department’s Web site at www.tax.ny.gov. The Tax Department has issued a number of these sales tax bulletins and continue to add new bulletins on a regular basis. It is the department’s goal that all taxpayers meet their sales tax obligations and pay the correct amount of tax due. If your business makes sales of property or services that are subject to sales tax, it must register for sales tax purposes and obtain a Certificate of Authority. You should thoroughly read all the information contained in this publication so that you become aware of your obliga

When it comes to New York, bagels are serious business. And they may also be taxable business -- if a knife comes out. New York, like many other states, exempts groceries from its sales tax. Walk into a bagel place, order a dozen, buy some name brand cream cheese, and go on your way -- that feels like you're grabbing some groceries, and should be left untaxed. New York agrees. You pay the posted price and the state goes empty handed. But what about one of those bagels, cut in a half, toasted, with some store-made scallion cream cheese, some lox, lettuce, and tomato, with some iced coffee to go with it? More from Now I Know .

Sales Tax 101 for Small Business Owners and Online Retailers How to Start a Retail Business; A Step-by-Step Guide Ultimate Guide to the Retail Industry 4 Tips for Getting Large Retailers to Stock Your Products  for inventors and entrepreneurs Monthly and Annual Retail Trade statistics  from the U.S. Census Bureau

If you will be selling property or services in New York State that are subject to sales tax, you may be required to collect the sales tax from the person to whom you make the sale. In general, the sales tax you must collect and remit is computed using the combined state and local rate in effect in the locality where you deliver the taxable product or service to the customer. If you must collect sales tax on your sales, then you must register for sales tax purposes with the Tax Department and obtain a Certificate of Authority (see How to Register for New York State Sales Tax (TB-ST-360) ). You must also be registered for sales tax purposes to issue or accept most New York State sales tax exemption documents. For example, even though wholesalers may never collect sales tax because all of their purchases and sales are for resale (and, therefore, are eligible for exemption from sales tax), they must still be registered to legally issue and accept most exemption documents. For additiona

From the Sales Tax Institute . You collect the tax for the state where the property is delivered to your customer. If the item is shipped to the customer, then tax applies for the delivery state. You should collect the tax only if you are registered to collect tax in that state. If the customer picks up the item at your location, tax should be collected for your state. If you are selling goods over the Internet and your company has a presence in the state of delivery, your company has established nexus and will be required to register to collect sales tax on all taxable items regardless of method of order placement. Whether the order is placed over the Internet or through traditional means, if a company has nexus with the state in which the product is being shipped, sales tax should be billed and collected. For example, if a New York company ships to New York, there is nexus, and tax is collected. If the New York company ships out of New York, whether they collect sales tax or not

When you purchase taxable property or services from a seller (vendor) located in New York State and take delivery in New York State, the vendor should collect state and local sales tax due and send it to the Tax Department. However, you are responsible for paying the tax directly to the Tax Department under the following circumstances: Deliveries into New York State without collection of sales tax You owe state and local sales tax if you purchase taxable property or a taxable service that is delivered to you in New York State without payment of New York State and local tax to the seller, such as through the Internet, by catalog, from television shopping channels, or on an Indian reservation. Purchases of property or services outside New York State with subsequent use in New York State You may also owe New York State and local use tax if you are a resident of New York State at the time you purchase any of the following outside New York State: • property you bring into New

Nolo.com : The Internet takes tax-free shopping to a new level. In fact, no-tax shopping has become a prime lure of online retailers looking to hook consumers on click-and-charge buying. Despite what you sometimes hear, however, some Internet sales are subject to sales tax, and even when a site doesn't collect sales tax, consumers are technically responsible for remitting any unpaid sales tax on online purchases directly to their state. For information on the Internet sales tax laws for each state, see Internet Sales Tax: A 50-State Guide to State Laws . Collecting Sales Tax: Some Sites Have To, Some Don't If an online retailer has a physical presence in a particular state, such as a store, business office, or warehouse, it must collect sales tax from customers in that state. If a business does not have a physical presence in a state, it is not required to collect sales tax for sales into that state. This rule is derived from a 1992 Supreme Court decision which held that

A report published by the Office of Advocacy analyzes the impact of an internet sales tax on small business. As the popularity of online shopping has grown, states have seen their sales tax revenues drop. Federal legislation has been introduced over the past several years to authorize online sales tax collection. With small business owners on both sides of the issue, the Office of Advocacy recognized the need for objective research for small businesses and policymakers. This report analyzes the number of firms that will be affected by the small seller exemption (SSE) if current legislation passes and how much e-commerce is likely to be affected. The report, An Analysis of Internet Sales Taxation and the Small Seller Exemption , was written by Donald Bruce and William F. Fox of the University of Tennessee’s Center for Business and Economic Research.

Jurisdictional reporting of credits for Sales Tax Web File becomes mandatory for reporting periods beginning September 1, 2013. For reporting periods beginning September 1, 2013, the Tax Department's Sales Tax Web File service will require vendors to report credit information on a jurisdictional basis. This means for each jurisdiction for which you report activity, you must now separately report your credits against taxable sales and purchases. This requirement allows the proper amount of sales tax revenue to be distributed to the correct taxing jurisdictions. Credit reporting features of the Sales Tax Web File service: You need to report the taxable sales, purchases, and credit information for each jurisdiction and the Tax Department will compute the net amount of sales on which tax is due. For reporting periods beginning September 1, 2013, you must make an entry in all fields for those jurisdictions where you report activity. If a field does not apply to you, simply ent

In certain instances, section 5-a of the Tax Law requires businesses that are awarded contracts with New York State to certify that they are registered to collect New York State and local sales and use taxes (sales tax) on sales delivered to locations within New York. The purpose of section 5-a is to ensure that contractors do not get state work unless they, their affiliates, and their subcontractors making sales of tangible personal property or taxable services are registered to collect New York State’s sales tax. This means that certain businesses, including in some cases out-of-state businesses not currently registered to collect New York State sales taxes, will need to register for New York State sales tax purposes. This bulletin explains the general rules related to the certification requirements for contractors and their affiliates and subcontractors. For more detailed information on the contractor certification requirements imposed under section 5-a of the Tax Law, see Publ

From SLATE . The Internet, in the popular imagination, is supposed to be free... But you don’t have to be a right-winger to recoil at the idea of an Internet sales tax. People who shop online have always gotten a free ride... Many states require you to pay that extra sales tax on your tax return, but who does that? Nobody, that’s who. The net effect is that shopping online earns you a big, permanent discount. If you’re buying anything big, it almost always makes sense to avoid physical stores. At least, it did until recently. During the last two years, Amazon, which had long led the charge against efforts to collect sales tax on online purchases, suddenly began striking tax deals with states. This was a strategic capitulation—by agreeing to collect taxes, Amazon can now build huge warehouses across the country. (It had previously avoided setting up warehouses in many states in an effort to avoid creating a “tax nexus.”) The warehouses allow Amazon to significantly increase its shi

"Unless all the requirements are met, a purchaser of business assets in a bulk sale transaction may be held personally liable for any unpaid sales taxes due from the seller." Bulk sale transaction is defined as "a sale, transfer, or assignment in bulk of any ,part or the whole of business assets, other than in the ordinary course of business by a person required to collect tax. Transfer by way of a gift does not preclude such transfer from being a bulk sale... "A sales tax will be imposed upon the transfer of any tangible personal property from the seller to the purchaser which is included in the property sold in bulk, except for property intended for resale or property exempt from tax. The tax is not imposed on real property or on intangible personal property such as cash, goodwill, or accounts receivable." Read more here .

TB-ST-104, Capital Improvements This bulletin explains what type of work is a capital improvement to real property. It also includes information on: -purchases by contractors and property owners; -billing; and -the appropriate use of exemption certificates. TB-ST-555, Materialmen and the Pay-When-Paid Option Materialmen who make qualified sales to contractors may be able to postpone payment of the sales tax until they receive payment from the contractor. This bulletin explains: -which sales qualify under the pay-when-paid option, and -how materialmen should report these transactions on their sales tax returns. To view the entire document please visit:

When a taxable product or service is sold, any charges for shipping or delivery that the seller includes on the bill become part of the receipt subject to sales tax. If the product or service being sold is not taxable, any charge to the customer for shipping or delivery is also not taxable. This also applies when the customer gives the seller a valid resale certificate or other exemption document. When taxable and nontaxable products or services are combined into a single charge on one bill, the entire bill is taxable, including any shipping or delivery charges. When charges for taxable and nontaxable products or services are listed separately on a bill, sales tax is not collected on the nontaxable charges. However: If only one charge for shipping or delivery is listed on the bill, the entire delivery charge is treated as part of the taxable portion of the bill. If the charge for shipping or delivery is fairly allocated between the taxable and nontaxable products of the

Segregated accounts 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 Exemp