Remote vendors with more than $300,000 in sales of tangible personal property into New York and more than 100 transactions must collect and remit state and local sales taxes, according to the state’s tax department.
In a January 15 notice, the New York State Department of Taxation and Finance announced that vendors with no physical presence in the state that meet both thresholds in the preceding four sales tax quarters are required to register with the tax department immediately and begin collecting and remitting sales tax in the wake of the U.S. Supreme Court's South Dakota v. Wayfair Inc. decision.
“Due to this ruling, certain existing provisions in the New York State Tax Law that define a sales tax vendor immediately became effective,” the notice says. “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.”
Many states have followed South Dakota's sales tax collection thresholds for remote sellers of at least $100,000 of sales into the state or 200 such transactions.
Joseph Bishop-Henchman of the Tax Foundation told Tax Notes that he is glad New York went with a higher $300,000 threshold but said the notice "completely ignores the . . . Court's guidance on minimizing burdens with respect to local sales taxes."
"Legislation could address this while also developing a realistic deadline for collection, compared to this revenue bulletin," Bishop-Henchman added.
Jennifer White of Reed Smith LLP highlighted the fact that the notice takes effect immediately.
"Taxpayers will need to evaluate their economic presence in New York ASAP in order to comply with the pronouncement," she said.