New York Sales Tax Economic Nexus Update

The U.S. Supreme Court’s recent South Dakota v. Wayfair decision holding that internet retailers who sell into a state without having a physical presence could be subject to sales tax collection responsibilities spurred many states to respond.  New York State issued a notice addressing which businesses will need to collect sales tax effective 1/1/2019.

Sellers who lack a physical presence in New York State, but have made more than $300,000 of tangible personal property sales in the state AND have made more than 100 sales of tangible personal property for delivery into the state in the immediately preceding four sales tax quarters, must register as a sales tax vendor and collect and remit the applicable state and local sales tax. The sales tax quarters in New York are: March 1 through May 31; June 1 through August 31; September 1 through November 30; and December 1 through February 28/29.

Sellers with a physical presence in New York can have nexus retroactive to the date they had physical presence and would still need to register and file returns even if their sales fell below the economic thresholds mentioned above.

Sax LLP will keep you updated as these tax updates emerge.  If you would like to learn more about how this decision may impact your business, please contact a Sax advisor at (973) 472-6250, or contact our firm’s in-house advisors on Sales and Use Tax and state tax nexus, Peggy Tilles ([email protected]) or Mathew Giordano ([email protected]).