New York State and Local Tax Updates July 2019

Sales tax rate in New York’s Westchester County increases

July 10, 2019

The state’s Department of Taxation and Finance has announced that the sales and use tax rate in the county is rising from 3% to 4%. This doesn’t include the cities of Mount Vernon, New Rochelle, White Plains and Yonkers. Taxpayers are advised that the sales tax return covering the quarter June 1, 2019, through August 31, 2019, will contain a double set of entry lines for each of the rates affected by the hike. One line is to report sales and uses occurring from June 1 through July 31. The other line is to report sales and uses occurring from August 1 through August 31.

New York Court of Appeals reverses lower court’s ruling that a taxpayer’s information services weren’t subject to tax

July 10, 2019

The New York Court of Appeals has reversed a lower court’s ruling that a taxpayer’s information services weren’t subject to tax. The taxpayer bought competitive-price audit reports from a price-checking service for grocery and retail outlets. The reports relied on information obtained from products on supermarket shelves. The NY Tax Appeals Tribunal ruled that the taxpayer’s purchases were taxable receipts and not exempt information services, because they weren’t “personal and individual in nature.” NY’s appellate division disagreed, ruling that, when there’s an ambiguity in the law about an exclusion from tax and not an exemption, the law strictly favors the taxpayer.

New York ALJ rules a large entertainment company not entitled to exclude royalties from its foreign affiliates

July 3, 2019

A New York administrative law judge (ALJ) ruled on whether a large entertainment company was entitled to exclude royalties from its foreign affiliates. The ALJ rejected the claim that the payments wouldn’t have to be added back to entire net income. It ruled that NY law’s addback and exclusion provisions work to ensure that royalty payments between related members are taxed once and don’t escape taxation altogether. The ALJ also rejected the claim that there was a violation of the third prong of the dormant commerce clause. The law’s provisions are only triggered if the royalty payments involve related parties, whether or not the payer is a NY taxpayer, it stated. (Dkt. No. 828304)

New York raises its sales tax nexus threshold

July 3, 2019

The NY legislature has upped the amount of gross receipts from the sale of items delivered into the state that trigger sales and use tax collection. As of June 23, 2019, a marketplace provider isn’t required to collect the tax if the cumulative total of the provider’s gross receipts from taxable sales of tangible personal property delivered into the state doesn’t exceed $500,000. (The threshold was previously $300,000.) This also is true if the number of sales doesn’t exceed 100. The requirement applies to all tangible personal property, including the sale of prewritten computer software that’s downloaded or remotely accessed by customers.


© 2019

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