Most businesses starting in New York selling a product or offering certain services will need to register for a sales tax Certificate of Authority. This is commonly referred to as a seller’s permit, sales tax permit, sales tax license, sales tax number, or sales tax registration.
Check out the rest of this guide to find out who needs to register as a sales tax vendor, what products and services are taxable, how to register for a New York sales tax permit, and the reporting requirements.
Who needs a sales tax Certificate of Authority in New York?
A business must register as a vendor in New York when:
- A business has sales tax nexus. Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Maintaining a place of business in the state (nexus), such as a store, office, or warehouse, and sell the taxable, tangible personal property (defined as any kind of physical personal property that has a material existence and is perceptible to the human senses like clothing, some software, trees, etc.) or services to persons within the state; or
- Soliciting business in New York State through employees, independent contractors, agents, or other representatives that sell tangible personal property or services in New York State; or
- Soliciting business through catalogs or other advertising material that market tangible personal property or services and have some additional connection with the state; or
- Selling taxable products or certain services within New York State
- A remote seller or an out-of-state business selling to New York residents and one of the following:
- Making total annual sales of tangible personal property to New York residents of $500,000 or more; and
- Shipping 100 or more transactions with New York residents annually.
What products and services are taxable in New York?
There are a few exceptions, but almost all physical products are taxable when sold at retail in the state of New York. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Some food and drinks, medical devices, manufacturing equipment, and certain coin operated car wash services are tax-exempt. See the full list of sales tax exemptions in New York
Digital products, except for canned software (pre-made software), aren’t taxable.
Most services aren’t taxable in New York, however, there are a few exceptions, some of which include:
- Motor vehicle repair
- Dog grooming
- Appliance repair
- Computer repair
- Lawn mowing
- House painting
- Snow removal
- Plumbing or electrical repairs
- Swimming pool maintenance
See Publication 862 for a list of taxable services in New York.
How to register for a sales tax certificate of authority in New York
A sales tax certificate of authority can be obtained by registering online with New York Business Express.
According to the New York State Department of Taxation, you must apply at least 20 days before making taxable sales or providing taxable services in New York.
Information needed to register includes:
- Business name, address, phone number
- Federal Employer Identification Number (FEIN) with the IRS, or owner’s Social Security Number if a sole proprietorship with no employees
- Type of business entity: Sole Proprietorship, Partnership, Corporation, Limited Liability Company (LLC)
- The date the business will begin collecting sales tax
- Bank account information
- Tax preparer information (if used)
- Names, home address, Social Security Number, and ownership percentages of owners/officers/members
How much does a sales tax certificate of authority cost in New York?
There is no cost for a sales tax Certificate of Authority in New York.
How long does it take to get a New York sales tax certificate of authority?
Most applications are processed on the same day.
After registering, a paper certificate will be mailed. This certificate must be displayed in plain view at the place of business. If there is more than one location, a certificate will be needed for each location.
Do you have to renew your New York sales tax certificate of authority?
The sales tax Certificate of Authority is a one-time registration, and no renewals are needed. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Department of Taxation and Finance.
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, the business charges the appropriate sales tax rate to the customer. This collected sales tax is sent to the New York Department of Taxation and Finance.
How much sales tax is charged?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide tax, there are additional sales taxes that may be added by cities and municipalities. See the sales tax rate table from the New York Department of Taxation and Finance to find sales tax rates.
When are New York sales tax returns due?
The Department of Taxation and Finance will determine a filing frequency based on the expected sales volume, which will be monthly, quarterly, or annually. Generally, a new business will file quarterly.
Filings are due the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, which would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales.
Sales tax on purchases for resale
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and fill out a New York Resale Certificate (also referred to as a sales tax exemption certificate) to document the items being purchased are for resale.
In addition to registering for a sales tax permit, there may be other business licenses needed before starting a business in New York. Learn what business licenses are needed in New York.
If you have questions about the sales tax in New York, the New York Department of Taxation and Finance has A Guide to Sales Tax in New York State (Publication 750), or they can be contacted by calling 518-485-2889.