New York: Sales Tax Handbook
What constitutes sales tax nexus in New York?
One of the more complicated aspects of New York sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of New York, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in New York, the vendor must register for a New York sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in New York.
Sales Tax Nexus in New York
According to the New York law, all retailers who have tax nexus can be defined in several different ways.
If your business has an office or any other place of business in New York, an employee in New York for more than two days each year, any sales representative, agent, contractor, or any other representative present within the state's boundaries, the delivery of goods within the state, using vehicles owned by the taxpayer, the ownership of any real or personal property, or the storage of goods stored in a warehouse in New York, you have sales tax nexus in the state.
New York has a rebuttable presumption that certain Internet retailers of taxable tangible personal property or services are sales tax vendors required to register for sales tax purposes and collect state and local sales taxes
For additional details on sales tax nexus law in New York, see the nexus information page from the Department of Taxation and Finance at http://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/do_i_need_to_register_for_sales_tax.htm
Taxation of Internet-Based Sales in New York
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Depending on the situation, New York may or may not charge sales tax on Internet-based transactions. In the state of New York, the click through nexus can be complicated. It can have a (rebuttable) presumption that some Internet retailers of legally taxable personal property or taxable services are legally required to collect sales tax. More specifically, New York's statutes declares that a seller who enters into a commission agreement with any New York resident (where the resident either indirectly or directly refers potential customers to the seller AND these referrals result in gross receipts of more than of ten thousand dollars during the previous year) has nexus.
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within New York, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in New York?
The folks at the sales tax compliance company Avalara are an approved New York sales tax partner, and you can use their free New York nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay New York sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
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