Most people think sales tax is about the rates.

But that’s just the tip of the iceberg when it comes to compliance. Tax law in New York illustrates this perfectly, from electronic filing requirements to tax audits and more. Watch this video to get a one-minute overview of what sales tax is like in New York. It’s not a New York minute, but it’s still pretty darn fast.

Transcript

Hi. Welcome to Will’s Whiteboard. I’m Will. Today we’re going to talk about New York sales tax. It’s a huge state, a huge economic center, and many people have questions about its sales tax law. So I’m going to give you an overview of New York sales tax in one minute. Ready? Here we go.

What’s the state rate? It’s 4%. However, the rate can get as high as 8.875% when you add local tax.

Nexus, or the connection to the state that gives you the obligation to collect sales tax. New York works like other states in that if you have a physical presence there, you likely have to collect sales tax. In addition, if you work with in-state affiliates, even having just a link on their website that leads customers to your website, and you get a certain amount of revenue per year, you likely have Nexus and the obligation to collect.

Filing, your filing frequency will depend on how much revenue you bring in. Most businesses in New York have to e-file, electronic file.

What’s a big gotcha in New York? The Division of Taxation is really into data mining, mapping consumer credit records to tax returns to see if there are discrepancies. If there are, they go after you. So make sure your records are in order.

I hope this helps you understand New York sales tax. I will talk to you next time.