New York State Provides No Grace Period for Sales Tax — Requires Immediate Registration

The New York State Department of Taxation and Finance this week released its guidance when remote sellers need to collect and remit sales tax.

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In its guidance, the state said, “On June 21, 2018, the United States Supreme Court ruling in South Dakota v. Wayfair (138 S.Ct. 2080 [2018]) eliminated the prohibition on a state imposing sales tax collection responsibilities on businesses that have no physical presence in that state.”

New York State Compliance Threshold

Remote sellers (out-of-state retailers) with more than $300,000 in sales of tangible personal property delivered in the state and more than 100 sales of tangible personal property delivered in the state in the immediately preceding four sales tax quarters are required to immediately register with the state. The sales tax quarters are:

  • March 1 through May 31,
  • June 1 through August 31,
  • September 1 through November 30, and
  • December 1 through February 28/29.

It should be noted that most other states followed South Dakota’s threshold of $200,000 in sales or 200 transactions in the previous calendar year.

Most other states copied the threshold enacted by South Dakota. But New York State uses a lower threshold by only allowing 100 transactions before sales tax reporting and remittance is required by remote sellers.

This could trigger a federal court challenge, but until such a challenge makes its way through the system, remote sellers will need to comply.

READ MORE: The Fuzzy Math by States in Sales Tax Case South Dakota v. Wayfair

Refer to our Sales Tax Guide for more information.

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