The New York State Department of Taxation and Finance announced "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. Due to this ruling, certain existing provisions in the New York State Tax Law that define a sales tax vendor immediately became effective. Businesses that fall within this definition and make taxable sales in New York State are required to collect and remit New York State and local sales tax, as discussed below."
"A business that had no physical presence in New York State but has both made more than $300,000 in sales of tangible personal property delivered in the state and conducted more than 100 sales of tangible personal property delivered in the state in the immediately preceding four sales tax quarters is required to register as a sales tax vendor, and collect and timely remit the applicable state and local sales tax.1 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"
This means if you are a business that meets the thresholds specified above but you have not yet registered as a vendor with New York, you should do so immediately. For information about the sales tax registration process, see the New York State Department of Taxation and Finance Tax Bulletin titled: How to Register for New York State Sales Tax (TB-ST-360). You can register your business as a vendor for sales tax collection/remittance purposes using the New York State Department of Taxation and Finance Business Express website. Additional information concerning New York's 'economic nexus requirements' will be available from the New York State Department of Taxation and Finance.
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But as we have told you, New York isn't the only state implementing 'economic nexus'. In light of the Supreme Court's decision in the South Dakota v. Wayfair case numerous states have either implemented laws mirroring the economic nexus provisions or are in the process of doing so. In last week's Sales Tax Tuesday we ask you if you were 'Nexus Compliant' and gave you this link to valuable resources that Insightful Accountant and Avalara have made available to you including two whitepapers on compliance, and a tool to help you assess your status.
I know that you typically expect me to be 'on the road in my big RV doing the Sales Tax Tuesday travel-log from state-to-state telling you about what to see, and where to go, and what to eat, as I pay Sales Tax all along the way. I also know that you realize that Sales Tax Tuesday is a joint venture between Insightful Accountant and Avalara, and that over the past year we have had to interrupt our travels several times due to 'breaking news' surrounding all this 'nexus stuff'. Pretty much, the first of those breaking news events began with the big Supreme Court decision in the South Dakota v. Wayfair case, then a few immediate state decisions or announcements about implementations of 'economic nexus'. And some stragglers and late interpretations, like this one from New York. But this is news folks, and we here at Insightful Accountant have an obligation to bring you 'the news' too, well at least the parts of it that are somewhat related to what we cover most of the time. So I am still parked in 'I won't tell where' and you will just have to wait another week while I carry on a bit longer about 'economic nexus'...hey, "blame New York, if you are going to blame someone."
But, we want to make certain you (or your clients, especially your 'seller' clients) know in which states you (they) have sales tax obligations and it isn't as simple as the dollar or transaction count rules in all states (like the ones New York set out above) directly because of the potential involvement with eCommerce marketplaces like Amazon or Ebay. Many states have set rules that if anyone is selling through one of these marketplace giants then they maybe considered as 'part of the whole' and the entire marketplace is treated as one big entity for tax determination. Not only that, but many states have found other ways of taxing remote sales including 'affiliate nexus' which ties to in-state affiliates, or 'click-through nexus' which is associated with links on in-state websites, as well as 'cookie nexus' associated with placing software or apps on in-state devices, and 'non-collecting seller use tax' reporting. That's why our 'Nexus Compliance' tools can help determine state-by-state requirements.
While we provide the links above for more information about finding 'registration' details along with the actual link to registration for New York, for every other state in which someone might be involved with in terms of 'economic nexus', they have to know with whom they must register, and how to register. Most states have single state agency registration, and some states are part of what is called 'Streamlined Sales Tax' and someone can register for those states with a single registration, but there are other 'home rule' states that allow each political sub-division in their state to set their own sales tax and tax rules including registration and collections and it can be very difficult to identify the proper authorities with whom to register.
Obviously, when it comes time to collecting the tax a seller can either do it 'the old fashioned manual way' or use some form of automation. We tell our readers all the time about Avalara's AvaTax solution that delivers sales and use tax calculations within your existing business applications at the time of checkout or billing in real time. With AvaTax you will have the most accurate tax calculations based on the latest rules, rates and boundaries, as well as economic nexus compliance because AvaTax supports more than 12,000 tax jurisdictions in the United States and beyond.
You won't be worrying about filing and paying your taxes if you are using AvaTax whether there is a single agency, or hundreds of agencies involved due to your sales across numerous economic nexus boundaries because Avalara provides a filing service so streamlined you'll barely lift a finger as their Return feature pulls your data from AvaTax to prepare and file each require return. If you choose, they can even remit payment(s) for you.
So, whether you are concerned about the new 'enforcement' of economic nexus in New York, or the impact of all the other forms of 'nexus' that can or soon will be impacting your business, we encourage you to reach out for our free nexus compliance resources.
1 New York State Tax Law §§ 1101(b)(8)(i)(E), 1101(b)(8)(iv).