Sales Tax Updates in New York

Tax Professionals' Resource
January 20, 2013 — 1,241 views  
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The state of New York imposes a 4% sales tax on gross sales of tangible personal property or services. While this tax is commonly passed by sellers on to purchasers, New York law does give sellers the option of either absorbing the sales tax or shifting it to the purchaser at the time of transaction. The law also dictates that the seller cannot market or advertise that they will pay the sales tax to sweeten deals.

The state holds sellers personally liable to collect the sales tax, however, if the buyer doesn't pay the tax or erroneously pays a lesser amount, that liability then shifts to the purchaser.

One tricky aspect of trying to understand sales taxes in New York is the fact that there are 77 jurisdictions in the state--Each with the power to impose specific sales taxes within that particular jurisdiction. Rates are adjusted each year at the close of February and can be viewed at http://www.tax.ny.gov/bus/st/stidx.htm

Certain transactions in New York are also subject to a surtax of 5%. This surtax is commonly applied to receipts for entertainment or information services, along with passenger car rentals in the Metropolitan Commuter Transportation District.

Services taxed in New York include processing and printing services, the installation, maintenance, and repair of tangible personal property, real estate services, maintenance or repair, information services, interior decorating and design services, protective or detective services, safe deposit box or storage rentals, motor vehicle parking and garage services, and telephonic or telegraphic entertainment and information services.

Items purchased with the intent of resale are tax exempt. Purchases made outside of New York for use in New York are subject to a use tax rather than a sales tax. It is the responsibility of the seller to collect the use tax on receipts for the use of computer software, information services, printing/installation/repair/maintenance services, interior decorating or design services, protective and detective services, telephone answering services, passenger car rentals, or tangible personal property that is within New York state lines.

Use tax exemptions include retail sales of tangible personal properties, taxable services, and gas/utility/telephone/telegraph services. Additional use tax exemptions include property that is purchased for print publications, along with race horses purchased outside of New York but racing inside state lines. Additionally, a use tax isn't due when tangible personal property is purchased by a user that is a nonresident.

 

Tax Professionals' Resource