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New York: When to Pay Sales Tax Directly to Tax Department


 Live in New York? Do you know when sales tax is owed directly to the Department of Taxation?

The New York State Department of Taxation and Finance has updated a publication explaining when individuals, estates and trusts must pay sales or use taxes directly to the department. Information in Publication 774 also relates to businesses located in New York State that are not registered to collect and remit New York State sales and use taxes. The information does not apply to businesses that are registered to collect and remit New York sales and use tax.

State and local sales tax is owed directly to the New York State Department of Taxation and Finance in the following situations:

  • Taxable goods or services are purchased without payment of state and local sales tax to the seller and delivered to the buyer in New York. This situation may arise when purchasing though the Internet, by catalog, from television shopping channels, or on an Indian reservation.
  • Taxable goods or services are purchased by a New York State resident outside of New York State, for subsequent use in New York State. Credit for sales tax paid to another state may be available.

In addition, New York sales and use tax may be owed to the Taxation Department for purchases made in different localities within New York State. This can occur if taxable goods or services are purchased in a locality with a lower tax rate than then one in which you reside. For example:

  • You purchase property in a different locality and then use it where you reside.
  • You have a taxable service performed on property in a different locality and then bring the property to the locality where you reside.
  • You purchase a service (such as an information service) in a different locality and then use it in the locality in which you reside.

For example, if your mechanic is located in a neighboring county with a lower rate of sales tax than the rate where you reside, you owe the difference in sales tax rates to the Department of Taxation and Finance. Really.

But I don’t pay New York income tax

Some people who are not considered a New York resident for personal income tax purposes may nonetheless be considered a resident for sales and use tax purposes. Examples include college students and members of the military.

Not every service is subject to sales tax in New York

The publication reminds that not all services are subject to sales tax in New York. Taxable services include maintaining, servicing and repairing tangible personal property (such as your car). Tax exempt services include laundering services, veterinary services, and legal and accounting services.

Everyone who resides in New York State should read Publication 774. In addition to explaining when sales and use tax is owed, it explains how to calculate the amount of sales and use tax owed, when sales and use tax payments are due, and how to pay and report them.

Worried about consumer use tax? Why not automate?

photo credit: Thomas Hawk via photopin cc


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.