Sales Tax Update in New York

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January 31, 2013 — 1,519 views  
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In the state of New York, sales tax applies to retail sales of personal property and certain services. Use tax applies for purchase of goods and services outside from other states, but used in New York State.

Sales tax is applicable to the following goods and services:

  • Tangible Personal Property (exception for exempt personal property)
  • Utilities (Gas, Electric, Telephone)
  • Refrigeration and steam
  • Select Services
  • Food and beverages sold by restaurants, taverns, and caterers
  • Hotel Occupancy
  • Certain Admission Charges and Dues

The following items are exempt from sales tax in New York State:

  • Purchases for resale
  • Sales to or by Federal or NYS Government
  • Sales to or by Charitable Organizations
  • Sales to or by Other Exempt Organizations
  • Sale of Food for Home Consumption
  • Sales of Prescription and Non-Prescription Medicines

New York State (NYS) sales tax is equal to a total of 4% plus additional amounts for local, county, and school district. An additional, 0.375% applies to sales made within the Metropolitan Commuter Transportation District (MCTD).

Refer to the latest schedule for NYS Sales Taxes by local jurisdiction:

New York State Sales and Use Tax Rates by Jurisdiction - Effective December 1, 2010

Businesses and other entities registered with New York State for sales tax purposes must file quarterly, monthly, or annual Sales Tax Returns with the department. The sales tax return must be filed by the return due date, regardless of whether the business made any taxable sales or not.

Businesses can register with NYS for Sales Tax purposes using following link:
Register as a Sales Tax Vendor

Businesses which have taxable sales in excess of $ 500,000 or prepaid sales tax on fuel or diesel in excess of $ 5 Million, must participate in the PrompTax program.

Most sales tax payers are required to use e-file.

You can use NYS Sales Tax Web File and access other NYS sales tax forms at the following location:
Sales Tax Forms

Monthly, quarterly, and annual sales tax payers can use the forms in the link above to file their sales tax returns.

As a business participating in the sales tax program, you can claim a credit for sales taxes that have been overpaid or collected (and repaid to customers), or you apply for a credit allowing for a reduction of sales tax due for the current return.

NYS Sales Tax Vendors can be penalized for the following reasons:
-Failure to register to collect tax
-Failure to timely file sales/use tax returns
-Failure to collect/remit the required amount of tax due
-Failure to keep adequate records

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