New York — Sales & Use Tax

New York imposes a statewide sales tax at a rate of 4% on receipts from every retail sale of tangible personal property, unless otherwise exempted. This base rate applies uniformly across all counties and does not vary by location.

Source: N.Y. Tax Law § 1105

The 4% state rate serves as the foundation upon which local jurisdictions may impose additional sales taxes. Counties and cities are authorized to add their own rates on top of the state base, resulting in combined rates that vary by location throughout the state. Additionally, localities within the Metropolitan Commuter Transportation District (MCTD)—which includes New York City and several surrounding counties—are subject to an additional 0.375% surcharge, bringing the effective state-level rate in those areas to 4.375% before local taxes are added.

Source: N.Y. Tax Law § 1109

New York imposes sales tax collection obligations on out-of-state sellers who meet the state's economic nexus thresholds, even when the seller has no physical presence in New York.

Source: N.Y. Tax Law § 1101(b)(8)(i)(E)

## Thresholds

A business is presumed to be "regularly or systematically soliciting business" in New York—and therefore required to register and collect sales tax—if, during the immediately preceding four sales tax quarters:

• The cumulative total of gross receipts from sales of tangible personal property delivered into New York exceeds $500,000, AND
• The business made more than 100 sales of tangible personal property delivered into the state.

Both conditions must be met. A business that meets the gross receipts threshold but has not made more than 100 transactions is not required to register for sales tax under the economic nexus rule.

Source: N.Y. Tax Law § 1101(b)(8)(iv) Source: Registration requirement for businesses with no physical presence in New York State

## Measurement Period

The lookback period is the immediately preceding four sales tax quarters. New York's sales tax quarters end on the last day of February, May, August, and November. After the conclusion of each quarter, businesses should review their New York sales to determine whether they have met both thresholds.

Source: Registration requirement for businesses with no physical presence in New York State

## What Counts Toward the Thresholds

"Sales transactions" means each invoice, sales slip, contract, or other memorandum of sale issued for the sale of tangible personal property delivered into New York, whether taxable or exempt, including sales for resale. Both taxable and non-taxable sales count toward the $500,000 gross receipts threshold and the 100-transaction threshold.

Source: Registration requirement for businesses with no physical presence in New York State

Marketplace sales facilitated by a third-party platform are included in the seller's threshold calculation, even when the marketplace facilitator collects and remits tax on those sales.

Source: Registration requirement for businesses with no physical presence in New York State

## Registration and Collection Timing

If a business meets both thresholds, it must file a Certificate of Authority within 30 days after the day it met the thresholds and begin to collect tax 20 days after filing the certificate.

Source: Registration requirement for businesses with no physical presence in New York State

## Effective Date

New York's economic nexus provisions became effective on June 21, 2018, the date of the United States Supreme Court decision in South Dakota v. Wayfair. The dollar threshold was initially $300,000, but was raised to $500,000 on June 24, 2019, retroactive to June 21, 2018.

Source: TSB-M-19(4)S, New York State Department of Taxation and Finance

New York imposes its 4% sales tax on receipts from: (a) every retail sale of tangible personal property; (b) sales of gas, electricity, refrigeration, steam, and telephone and telegraph services (except for resale); (c) enumerated services, including information services, protective and detective services, interior decorating and design, installation, maintenance, servicing, and repair of tangible personal property, and certain other listed services; (d) food and drink sold by restaurants, taverns, and caterers; (e) hotel and motel room rentals; and (f) admission charges to places of amusement. Tangible personal property is taxable unless specifically exempt; services are taxable only if enumerated in the statute.

Source: N.Y. Tax Law § 1105

New York requires marketplace providers to collect and remit sales tax on taxable sales of tangible personal property they facilitate for marketplace sellers, effective June 1, 2019. A person is a marketplace provider if it (1) provides the forum—such as a website, catalog, store, or booth—where the sale occurs or the offer is accepted, and (2) the provider or an affiliate collects payment from the customer or contracts with a third party to do so. Both conditions must be met. The collection obligation applies regardless of whether the marketplace seller would have an independent duty to collect tax. The requirement covers only tangible personal property; services, hotel occupancy, and passenger car rentals are excluded. Providers must register as sales tax vendors.

Source: N.Y. Tax Law § 1101(e) Source: N.Y. Tax Law § 1131(1) Source: TSB-M-19(2)-1S

Sales of tangible personal property for resale are exempt from New York sales tax. A sale is not a "retail sale" if the property is purchased for resale as such or as a physical component part of tangible personal property. To claim the exemption, the purchaser must provide the seller with a properly completed resale certificate (Form ST-120) within 90 days after delivery of the property. The certificate must include the purchaser's name, address, and Certificate of Authority number. A vendor who accepts a resale certificate in good faith is not required to collect tax, even if the certificate later proves invalid.

Source: N.Y. Tax Law § 1101(b)(4)(i) Source: N.Y. Tax Law § 1132(c) Source: Tax Bulletin TB-ST-240

When the New York State Department of Taxation and Finance (Department) concludes an audit or otherwise determines that additional sales or use tax is due, it issues a Notice of Determination to the taxpayer. The Notice of Determination specifies the amount of tax, penalties, and interest assessed for the tax periods examined, identifies the legal basis for the assessment, and provides the taxpayer with formal protest rights.

90-day protest deadline A taxpayer has ninety (90) days from the mailing date of the Notice of Determination to file a written protest. This deadline is jurisdictional; the Department and the Division of Tax Appeals lack authority to accept a late-filed protest, even by one day. The 90-day period runs from the date the notice is mailed by the Department, not the date the taxpayer receives it. Missing this deadline renders the assessment final and immediately enforceable through warrant, levy, or other collection action.

Two protest paths New York law offers taxpayers two mutually exclusive protest routes, both governed by Tax Law Article 40. A taxpayer may either:

1. Request a conciliation conference with the Bureau of Conciliation and Mediation Services (BCMS) by filing Form CMS-1, Request for Conciliation Conference, within 90 days of the notice mailing date. BCMS is an independent bureau within the Department that reports directly to the Commissioner. Conciliation conferences are informal settlement proceedings conducted by a conferee who has broader settlement authority than the auditor. Over 90% of protests are resolved at this stage. The taxpayer may request the conference online through the Department's Online Services portal, by mail, or by fax. If conciliation does not resolve the matter, the conferee issues a Conciliation Order, which the taxpayer may then appeal to the Division of Tax Appeals by filing a petition within 90 days of the issuance of the Conciliation Order.

1. File a petition directly with the Division of Tax Appeals (DTA) within 90 days of the notice mailing date, bypassing BCMS entirely. The DTA is a separate, independent adjudicatory body that conducts formal administrative hearings before Administrative Law Judges (ALJs). This route is adversarial and resembles litigation; discovery, testimony, and evidentiary rules apply. Taxpayers who choose this path forgo the opportunity for an informal settlement conference with BCMS.

The two paths are mutually exclusive: filing a BCMS request precludes filing a direct DTA petition during the initial 90-day window, and vice versa. Once a taxpayer selects one path, the other is unavailable unless and until the chosen path is exhausted.

What the protest filing must contain A BCMS request (Form CMS-1) must identify the notice being protested, state the tax type and periods, provide the taxpayer's contact information, and briefly explain why the taxpayer disagrees with the determination. A petition to the DTA must comply with the requirements of 20 NYCRR § 3000.3: it must be in writing, set forth in separately numbered paragraphs the facts and legal grounds supporting the taxpayer's position, and provide "fair notice of the matters in controversy." The petition must be signed and include the taxpayer's address.

Penalty and interest continue to accrue Filing a protest does not stop the accrual of interest or penalties on the assessed amount. Interest continues to run during the entire appeals process. A taxpayer may pay the assessment in full at any time to stop further accrual and still continue the protest; payment is not considered an admission of liability and does not waive appeal rights.

Source: NY Tax Law § 170(3-a), Form CMS-1, Request for Conciliation Conference, Protest a department notice

New York's administrative appeals process for sales and use tax disputes is governed by Tax Law Article 40, which establishes a two-tier independent adjudication system separate from the Department of Taxation and Finance. The process begins at the Division of Tax Appeals (DTA) and may proceed to the Tax Appeals Tribunal; judicial review follows only after exhausting these administrative remedies.

Division of Tax Appeals (DTA) — first tier The Division of Tax Appeals is an independent state agency that conducts formal administrative hearings on tax controversies. It is governed by Tax Law §§ 2000–2022. When a taxpayer files a petition challenging a Notice of Determination (either directly or after an unsuccessful conciliation conference), the matter is assigned to an Administrative Law Judge (ALJ) within the DTA. The ALJ conducts a hearing in which both the taxpayer and the Department's Division of Taxation present evidence, examine witnesses, and submit legal arguments. The proceeding resembles a bench trial: discovery is available under 20 NYCRR Part 3000, testimony is under oath, and the New York rules of evidence apply in modified form.

After the hearing, the ALJ issues a written Determination analyzing the facts, applying the law, and sustaining, modifying, or canceling the Department's assessment. The Determination is mailed to both parties by certified or registered mail. Either party may then file an Exception to the ALJ's Determination with the Tax Appeals Tribunal within 30 days of the mailing date; if no Exception is filed, the ALJ's Determination becomes the final administrative determination.

Tax Appeals Tribunal — second tier The Tax Appeals Tribunal is the final administrative appellate body for New York State tax matters. It is established under Tax Law §§ 2000–2006 and consists of three members appointed by the Governor with the advice and consent of the Senate. The Tribunal reviews the ALJ's Determination de novo on the law but defers to the ALJ's factual findings unless they are not supported by substantial evidence in the record.

When an Exception is filed, the Tribunal may affirm, reverse, or modify the ALJ's Determination, or remand the matter for further proceedings. The Tribunal issues a written Decision explaining its reasoning. The Tribunal's Decision is the final determination of the administrative process and is binding on both the taxpayer and the Department unless appealed to the courts.

Judicial review — Appellate Division A taxpayer (or the Department) dissatisfied with the Tribunal's Decision may seek judicial review by filing a proceeding under CPLR Article 78 in the Appellate Division of the New York Supreme Court, Third Judicial Department, which has exclusive subject-matter jurisdiction over appeals from the Tax Appeals Tribunal. The Article 78 proceeding must be filed within four months of the date the Tribunal's Decision is mailed. Judicial review is limited to whether the Tribunal's determination was affected by an error of law, was arbitrary and capricious, or was not supported by substantial evidence.

If the Appellate Division's decision is adverse, further review may be sought in the New York Court of Appeals (the state's highest court), but only by leave of the Appellate Division or the Court of Appeals itself.

Burden of proof Under Tax Law § 689(e), the burden of proof in a proceeding before the DTA or the Tribunal rests on the petitioner (typically the taxpayer) on all issues except fraud, transferee liability, and certain penalty assertions. The taxpayer must prove by a preponderance of the evidence that the Department's determination is erroneous.

Small claims alternative For disputes involving $400,000 or less in tax (exclusive of penalties and interest), a taxpayer may elect to proceed in the DTA's Small Claims unit under Tax Law § 2010. Small Claims proceedings are more informal and faster, but the determination is not appealable; it becomes final 30 days after issuance and may not be reviewed by the Tribunal or the courts except in cases of fraud or jurisdictional defect.

Source: N.Y. Tax Law §§ 2000–2022, Division of Tax Appeals, Tax Appeals Tribunal

New York imposes strict time limits on the Department of Taxation and Finance's authority to assess additional sales and use tax, and on a taxpayer's right to claim a refund of overpaid tax. Both limitations are codified in Tax Law Article 28 (sales and use tax) and incorporate rules from Tax Law Article 27 (general administrative provisions).

Three-year general rule for assessments Under Tax Law § 1147(b), the Department may not assess additional sales or use tax more than three years after the date a return was filed. If a taxpayer files a return before the statutory due date, the return is deemed filed on the due date, so early filing does not shorten the limitations period. For example, if a quarterly sales tax return for the period ending March 31, 2023, was due on April 20, 2023, but the taxpayer filed it on April 1, 2023, the three-year limitations period begins on April 20, 2023, and expires on April 20, 2026.

Exceptions extending or eliminating the assessment period The three-year rule does not apply—and the Department may assess tax at any time—in the following circumstances:

• No return filed: If the taxpayer fails to file a required return, there is no statute of limitations; the Department may assess at any time.
• False or fraudulent return with intent to evade tax: If the Department establishes that the taxpayer filed a false or fraudulent return with the specific intent to evade tax, the limitations period does not apply. The Department bears the burden of proving fraud.
• Consent to extend: The taxpayer and the Department may agree in writing to extend the limitations period before it expires. Extensions are common when an audit is ongoing and the statute is about to expire. The extension must be in writing and signed by both parties; the extended period may be further extended by subsequent written agreements.

The Department frequently requests consent extensions during audits. A taxpayer is not obligated to consent and may instead allow the statute to expire, but refusal may result in the Department issuing a protective assessment based on incomplete information.

Refund claims: three-year lookback A taxpayer seeking a refund or credit of overpaid sales or use tax must file an application for refund under Tax Law § 1139 within three years from the time the return was filed, or two years from the time the tax was paid, whichever expires later. If a taxpayer files a protective refund claim while an assessment period is still open (e.g., during an audit), the refund statute is suspended until six months after the Department issues a final assessment or determination.

The three-year/two-year refund limitation is strictly enforced. A refund claim filed even one day late is barred. The Department has no discretion to waive this deadline.

20-year collection statute Once an assessment becomes final (either because the taxpayer did not protest, or because all appeals have been exhausted), New York imposes a separate 20-year limitation on collection. Under Tax Law § 174-b, a tax liability is extinguished 20 years from the first date a warrant could have been filed by the Commissioner, regardless of whether a warrant is actually filed. This collection statute runs independently of the assessment statute and cannot be extended by consent.

Coordination with voluntary disclosure When a taxpayer enters into a voluntary disclosure agreement (VDA) with the Department, the agreement typically limits the lookback period for unpaid tax to a negotiated number of years (commonly three years), even if the underlying assessment statute would permit a longer lookback. VDAs are discussed in detail in the voluntary-disclosure section of this guide.

Source: N.Y. Tax Law § 1147, N.Y. Tax Law § 1139, N.Y. Tax Law § 174-b

New York offers two mechanisms for taxpayers to clarify or resolve tax obligations prospectively or retrospectively: the Voluntary Disclosure and Compliance Program for past-due liabilities, and the advisory opinion process for guidance on future transactions.

Voluntary Disclosure and Compliance Program (VDA) The New York State Department of Taxation and Finance administers an ongoing voluntary disclosure program that allows taxpayers with unfiled returns or underreported tax to come forward, register, pay back tax, and obtain penalty relief. The program is governed by Tax Law § 171-a and TSB-M-10(4)S (and successor memoranda).

Eligibility To qualify, the taxpayer must:

• Not currently be under audit or investigation by the Department for the tax type and periods being disclosed.
• Not have been contacted by the Department regarding the liability (no pending notice, inquiry letter, or subpoena).
• Have a legitimate, good-faith basis for non-filing or underreporting (the Department reviews the facts and may deny applicants it believes were willfully non-compliant).
• Agree to register (if not already registered) and file returns going forward.

Lookback period The standard lookback period for sales and use tax VDAs in New York is three years from the date the VDA application is submitted. This is significantly shorter than the unlimited lookback the Department could assert if it discovers the non-compliance on its own (since no return was filed). The three-year lookback is not a statutory guarantee; it is a matter of Department policy and may be extended if the Department identifies fraud or intentional evasion.

Anonymous filing option New York permits anonymous initial filings through a representative (attorney or CPA). The taxpayer's identity is disclosed only after the Department agrees in principle to accept the disclosure and specifies the terms. This protects the taxpayer from creating an audit trail if the Department ultimately rejects the VDA or imposes terms the taxpayer cannot accept.

Penalty waiver The Department waives all penalties on the disclosed liability if the VDA is approved and the taxpayer complies with its terms (timely payment of back tax and interest, registration, and future filing). Interest is not waived; it accrues from the original due date of each period and must be paid in full. The penalty waiver applies to late-filing penalties, late-payment penalties, and substantial-understatement penalties, but not to fraud penalties (VDAs are not accepted from taxpayers the Department believes committed fraud).

Payment terms The Department typically requires payment of the back tax and interest in full upon acceptance of the VDA. In cases of demonstrated financial hardship, the Department may approve an installment payment agreement, but the taxpayer must formally request it and provide financial documentation. Installment terms are not automatic and are granted at the Department's discretion.

No statute-of-limitations defense waived Entering a VDA does not waive any statute-of-limitations defense the taxpayer may have. If the Department later asserts liability for periods outside the agreed lookback, the taxpayer may raise the statute as a defense in protest. However, the Department expects the taxpayer to have disclosed all material facts during the VDA process; concealment of a known liability may void the agreement.

How to apply VDA applications are submitted to the Department's Voluntary Disclosure Unit by mail or through a representative. The application must describe the tax type, the nature of the business, the approximate periods and amounts involved, and the reason for non-compliance. The Department reviews the application and, if accepted, issues a VDA letter specifying the lookback period, the filing and payment deadlines, and the penalty waiver terms.

Advisory opinions — prospective guidance A taxpayer may request a formal advisory opinion from the Department regarding the application of New York sales and use tax to a specific transaction or set of facts. Advisory opinions are issued under Tax Law § 171(28) and provide written guidance signed by the Department's Office of Counsel. An advisory opinion is binding on the Department with respect to the taxpayer who requested it and the specific facts presented, but it is not binding on other taxpayers and may be modified or revoked by later regulation or statute.

What an advisory opinion covers Advisory opinions address questions of law and tax classification, such as:

• Whether a particular product or service is subject to sales tax.
• Whether a specific exemption applies to a transaction.
• Proper sourcing of a multistate sale.
• Whether a seller is a "vendor" required to collect use tax.
• Application of the marketplace provider rules to a platform.

The Department will not issue an advisory opinion on factual questions, hypothetical scenarios, or matters already under audit or litigation. The request must describe the actual transaction with specificity and identify the statutory or regulatory provisions at issue.

How to request Advisory opinion requests are submitted in writing to the Department's Office of Counsel, Technical Services Bureau. The request must include:

• A complete description of the facts.
• Identification of the taxpayer (name, address, Tax ID).
• The specific question(s) presented.
• The taxpayer's analysis and proposed answer (optional but recommended).
• Any relevant contracts, product specifications, or other supporting documents.

The Department typically responds within 60–90 days, though complex requests may take longer. The opinion is publicly released (with taxpayer-identifying information redacted) and published in the Department's TSB-A series.

No fee New York does not charge a fee for advisory opinion requests.

Source: N.Y. Tax Law § 171-a, N.Y. Tax Law § 171(28), TSB-M-10(4)S, Voluntary Disclosure and Compliance Program, Request an advisory opinion