Businesses with nexus in New York are required to register with the New York Department of Taxation and Finance and to charge, collect, and remit the appropriate tax.

Generally, a business has nexus in New York when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.

In 2008, New York was the first state to enact click-through and affiliate nexus laws to capture sales tax revenue from out-of-state sellers.

If your business has ties to businesses in New York, including affiliates, it may have nexus. An out-of-state seller is considered to have nexus in New York if either of the following conditions is met:

• A New York affiliate who is a sales tax vendor uses a trademark, service mark, or trade name in New York that is the same as that used in New York by the remote affiliate
  
  
• A New York affiliate engages in activities in New York that benefit the remote affiliate in its development or maintenance of a market for its goods or services in New York, to the extent that those activities are sufficient for the remote affiliate to satisfy the nexus requirement of the United States Constitution

If direct or indirect ownership exceeds 50 percent, such activities include, but are not limited to:

• Referring New York customers to the remote affiliate
  
  
• Accepting merchandise returns from the remote affiliate’s catalog, telephone, or internet customers
  
  
• Soliciting New York customers using names and addresses from the remote affiliates mailing (or email) list
  
  
• Distributing catalogs or discount coupons on behalf of the remote affiliate
  
  
• Accepting catalog, telephone, or internet orders on behalf of the remote affiliate
  
  
• Fulfilling sales orders from the remote affiliates website or catalog (including in-store pick up of ordered items)
  
  
• Handling the distributions or warehousing in New York of products sold by the remote affiliate
  
  
• Performing repair (warranty) services on behalf of a remote affiliate
  
  
• Directing certain business activities of a remote affiliate
  
  

If direct or indirect ownership exceeds 5 percent, but is less than or equal to 50 percent, the New York Department of Taxation and Finance will determine if affiliate nexus exists.

Referrals, including online referrals, from in-state entities may also trigger nexus for an out-of-state business if both the following conditions are met:

• The seller enters into an agreement with a New York State resident under which, for a commission or other consideration, the resident representative directly or indirectly refers potential customers to the seller by link on an internet website or otherwise
  
  
• Cumulative gross receipts from sales by the seller to customers in New York State resulting from referrals to the seller by all of the seller’s resident representatives total more than $10,000 during the preceding four quarterly sales tax periods
  
  See New York Tax Law § 1101(b)(8); TSB-M-08(3)S; TSB-M-08(3.1)S; TSB-M-09(3)S; and Publication 750, A Guide to Sales Tax in New York State.