New York Sales Tax Guide
Chapter 5: Filing and paying New York sales tax
You're registered with the New York Department of Taxation and Finance and you've begun collecting sales tax. Congratulations! Remember, those tax dollars don't belong to you. As an agent of the state of New York, your role is that of intermediary transferring tax dollars from consumers to state and local tax authorities. Let's take a deeper look at how filing New York sales tax returns impacts your business.What does it mean to file an New York sales tax return?
Technically speaking, filing New York sales tax returns is a two-step process comprised of submitting the required sales data and remitting the collected tax dollars (if any) to state and local tax authorities.
In most states, there are a number of options for submitting sales tax data to the state. Business owners may complete a New York sales tax filing form and mail it to the New York Department of Taxation and Finance or they can file electronically online. In all states, filing online is recommended.
The filing process forces the business owner to detail their total sales, the amount of sales tax they have collected, and from where. The New York Department of Taxation and Finance wants to be kept up to date on your business growth (or lack thereof) to make sure they are getting the tax dollars due. By completing ongoing filing of monthly, quarterly, or semi-annual, or annual New York sales tax returns, they stay abreast of your growing company.When am I required to file my sales tax return?
The New York Department of Taxation and Finance will assign you a filing frequency. Typically, this is determined by the size of your business. State governments typically ask larger businesses to file more frequently. Visit our New York filing due dates page for more information.Am I required to file and pay my New York sales tax at the same time?
New York sales tax returns must be filed and paid at the same time and are governed by the same due date.I want to webfile my New York sales tax. What are my options?
Avalara has built the TrustFile product to allow business owners a quick and easy way to prepare and webfile New York sales tax returns. Users can sign up and use the service to prepare New York returns free for 30-days.
Filers may also file directly with the New York Department of Taxation and Finance by visiting their site and entering your transaction data manually. This is a free service, but preparing New York sales tax (breaking it down by jurisdiction) can be time consuming - especially for larger sellers.Can a 3rd party file my sales tax on my behalf?
Yes! Many business owners recognize they are not a tax professional and therefore, choose to outsource their sales tax sales and use tax filing to services like Avalara TrustFile or to an accountant or bookkeeper. This is a normal business practice that can save business owners time and help them avoid costly mistakes due to inexperience and a lack of deep knowledge about New York sales tax code.What happens if I file or pay my sales tax return late?
If a registered business that has collected no sales tax in New York, but fails to file a zero tax return (or missed their assigned due date), the penalty is $50
A return filed late by 60 days or less is fined as follows:
- 10% of the tax due for the first month; and
- 1% for each additional month or part of a month not to exceed 30% of the tax due
However, the penalty for a New York sales tax return filed late cannot be less than $50.
A return filed late by more than 60 days is fined as follows by the greater of:
- 10% of the tax due for the first month, plus 1% for each additional month or part of a month, not to exceed 30% of the tax due;
- $100, or 100% of the amount required to be shown as tax on the return, whichever is less; or
Note: You may be subject to fines and a jail sentence if you fail to make, render, sign, certify, or file any return or report.
If you file a return on time but do not remit the tax due, the penalty is 10% of the tax due for the first month, plus 1% for each additional month or part of a month not to exceed 30%.
If you omit more than 25% of the taxes required to be shown on the return, the penalty is 10% of the tax you failed to report.
If you fraudulently fail to pay or pay over any tax due, the penalty is equal to twice the amount of the tax not paid, plus interest on the unpaid tax, paid at the greater of 14 ½%, or the rate set by the Tax Commissioner.
Note: You may be subject to fines and a jail sentence if you willfully fail to depost taxes in a financial institution as required or fail to remit the state and local taxes collected.Do I need to file a return if I didn't collect any sales tax in New York?
Yes! Once you've successfully registered for and been issued a Sales Tax Certificate of Authority, you are required to file at the completion of each assigned collection period regardless of whether any sales tax was collected. This is what is known as a "zero-tax filing".
Failure to submit a required zero-tax filing can result in penalties imposed on your business by the New York Department of Taxation and Finance so don't take this responsibility lightly.If I close my business, do I need to file a final sales tax return?
Yes! The New York Department of Taxation and Finance requires all businesses to "close their books" by filing a final sales tax return. This also holds true for business owners selling or otherwise transferring ownership of their business.Does the New York Department of Taxation and Finance offer a discount for filing on time?
Vendor discounts are rebates offered to tax filers by state tax jurisdictions to compensate filers for the effort involved with collecting, filing, and remitting sales tax in a timely manner. Such discounts are frequently cited as outdated by those who see them as a tax loophole for big businesses. With online buying and SaaS services like Avalara TrustFile, the days of managing receipts, balancing books, and writing checks to the state have long since been replaced by computer automation.
The New York Department of Taxation and Finance currently offers a vendor discount (also known as a dealer collection allowance) of 5% with a maximum of $200 per quarter and a minimum of no minimum.