New York Sales Tax for Online Sellers: Registration and Nexus

Selling to New York customers from your own website can create a sales tax duty, even if you have never set foot in the state. Here is how the New York State Tax Department describes the rules.

Who must register

In general, you must register if you will make taxable sales in New York. The Tax Department says the number of sales usually does not decide it. Even a single taxable sale can require registration. Situations that commonly require it include:

Having a physical location in New York, such as a store, office, or warehouse, and selling taxable goods or services to customers there
Using employees, agents, or contractors in New York to sell taxable items or services
Regularly delivering taxable products to New York customers in your own vehicles, at least 12 times a year
Selling taxable items from a home-based business

The economic nexus test for remote sellers

If you have no physical presence in New York, you must register when both are true:

Your gross receipts from taxable tangible personal property delivered into New York exceeded $500,000 in the immediately preceding four sales tax quarters, and
You made more than 100 such sales.

Marketplace providers apply the same thresholds to sales they make or facilitate.

Register before you sell

Apply for a Certificate of Authority at least 20 days before you begin business. The certificate lets you collect sales tax and issue and accept most New York exemption certificates. You apply through New York Business Express.

Marketplaces and your own site

A marketplace provider is responsible for collecting New York and local sales tax on taxable sales of goods it facilitates for delivery to New York addresses, whether or not the seller must register. A registered seller’s responsibilities remain for:

Its own direct sales of goods in New York, such as orders through its own website
Facilitated sales that are not sales of tangible property, for example certain services

A registered seller reports facilitated sales on its return as nontaxable sales and keeps the Certificate of Collection and related records.

What to do now

Check where your sales are going. See economic nexus explained.
Decide whether you must register.
Register in time, collect the right tax, and file on time.
Keep clean records. See what to scan and keep.

For other states, see online seller basics. Questions? Book a call with FlowTex.

Sources

This article is general information, not tax or legal advice. New York rules can change. Check the Tax Department’s current guidance.