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Most businesses starting in New York that are 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 a sales tax certificate of authority, what products and services are taxable, how to register for a permit and reporting requirements.
Who needs a sales tax Certificate of Authority in New York?
A business must register as a vendor in New York when:
- Maintaining a place of business in the state (nexus), such as a store, office, or warehouse, and sell 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
- An out-of-state business selling to New York residents and one of the
- Total annual sales of tangible personal property to New York residents is $500,000 or more; and
- Having 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 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, with the exception of canned software (pre-made software), isn’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.
A sales tax certificate of authority can be obtained by registering online with New York Business Express.
According to the 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), or SSN if a sole proprietorship with no employees
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Date the business will begin collecting sales tax
- Bank account information
- Tax preparer information (if used)
- Names, home address, SSN 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 an New York sales tax certificate of authority?
Most applications are processed 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 makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it 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. To find sales tax rates, see the sales tax rate table from the New York Department of Taxation and Finance.
When are New York sales tax returns due?
The Department of Taxation and Finance will determine a filing frequency based on the expected volume of sales, 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, in which case 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 occurred.
Sales tax on purchases for resale
A business is able to 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 to document the items being purchased are for resale.
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.