US New York implements Wayfair Sales Tax rule
- Jan 16, 2019 | Richard Asquith
The New York state tax department published on 15 January 2019 guidance on the immediate requirements for out-of-state sellers to register and charge Sales Tax. This follows the US Supreme Court ruling on South Dakota vs Wayfair, which imposed a new, economic nexus test on sellers from outside the state, including international sellers. This changed the old test which has required a physical presence.
New York has set a threshold on such sellers’ liability to start charging Sales Tax as:
“A person is presumed to be regularly or systematically soliciting business in the state if, for the immediately preceding four sales tax quarters:
- the cumulative total of the person's gross receipts from sales of tangible personal property delivered into the state exceeded $300,000, and
- such person made more than 100 sales of tangible personal property delivered in the state.
Therefore, a business that has no physical presence in New York State but meets the requirements outlined above must register as a New York State vendor. Such business is required to register as a vendor immediately if it has not already done so.”
The New York sales tax quarters are March 1 to May 31, June 1 to Aug 31, Sept 1 to Nov 30, and Dec. 1 to Feb 28 or 29.
No effective date is mentioned in the guidance, and it is therefore presumed to be effective immediately.
Many businesses are facing financial uncertainty, whilst online sales are a strong growth area. In response, we are giving an extra three months (15 for the price of 12) to AvaTax customers from now until September 30, 2020