If you’re selling digital services and products to customers in New York, then you might be liable for the state’s sales tax. This guide covers two very important parts of the system:
- Registering for the tax, and then
- Filing tax returns on time.
We’ve scoured New York’s Department of Taxation and Finance website to provide you with all the necessary information about sales tax for out-of-state businesses in one place.
How to register for sales tax in New York
New York allows remote and foreign sellers to register for sales tax online.
The goal is to register with the tax department to receive a Certificate of Authority, which is basically a permit to collect sales tax. Legally you must do this 20 days before you make your first sale in New York, and you must wait until you receive your certificate to make any taxable sales.
But first you must register with New York Business Express and create a NY.gov business account.
Create NY.gov account
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Before you begin, gather all the necessary information you’ll need to fill out the application. It’s mainly basic information about you, your business, and your bank. The website provides a full checklist.
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Then head to this site and, where it says “I Need a NY.GOV ID”, click the registration button below.
- You’ll be taken to a new page and asked to enter some basic account information:
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You’ll receive a confirmation email, which you must check to activate your account. The link in the email is valid for 48 hours.
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Once you click it, you’ll be asked to set 3 security questions and answers. Then you’ll be asked to set a new high-security password for your account.
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Finally, you should see a confirmation page that your account has been activated! Click “Go to MyNy” to log in.
- Once logged in, you’ll see your home portal with just one service option: NY Business Express. Click that button and then click “Start Application” on the next page.
Create New York Business Express profile and submit sales tax application
- First you set up your business information, then you fill out the application. The interface is clean and smooth -- it will lead you through every piece of information!
- You will be asked about a Federal Employer Identification Number (FEIN or EIN). If you aren’t familiar with this, take a moment to read about what an EIN number is and how to get one.
If you don’t have an EIN or a social security number, then you must provide your business tax ID from your home country.
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Provide physical addresses of your business, even if that’s overseas. All correspondence, including your license/permit, will be sent to the physical address listed.
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You need to identify which industry you’re working in by providing its North American Industry Classification System number. Each number is a 2-6 digit code. You can find yours in the NAICS directory. New York’s portal also offers help with this!
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After a bit more data entry about owners of the business, you’ll head straight into the application. There will be a few questions about what your business sells and when it started/will start operating in New York. If you have everything from the checklist, then you’ll be fine!
Once your application is approved, your Certificate of Authority will be mailed to you within five days. If you live abroad, obviously this will take longer. Along with the certificate, you'll receive a sales tax ID number from the NYS Department of Taxation and Finance.
If you have any questions, you can contact the Department of Taxation and Finance.
How to file sales tax returns in New York
Sales and taxes should be reported and filed using US dollars. If you’ve made any transactions in New York in a different currency, be sure to convert those to USD using official currency exchange rates.
When to file and pay
You must file a sales tax return every quarter, and the deadline is the 20th day of the month after the reporting period.
BUT... New York doesn’t use the standard quarters! Instead, the state uses the following three-month periods and deadlines:
- March 1 - May 31: due on June 20
- June 1 - August 31: due on September 20
- September 1 - November 30: due on December 20
- December 1 - February 28 (29): due on March 20
This includes the date of your registration! For example, if you indicate that you plan on beginning business on July 15, you must file your first sales tax return for the period of June 1 - August 31 by September 20.
Note: You also must file every quarter, even if you made no sales in New York! This is called a “No-tax-due return” and it follows a similar process as a normal return. (Just a little less data entry 😉 )
How to file
To file online, you need to create one more account. This is called the Business Online Services account through Web File.
The great thing is that you can use the very same login information that you used for the NY.gov account above.
Simply log in to your existing NY.gov account and follow the prompts to verify your business's tax information!
Then you should take the following steps to file your return:
- Head to Sales Tax Web File and click “Log In to Web File.”
- You’ll arrive at your Account Summary page. As the screenshot states above, select the Services menu in the upper left corner.
- Select “Sales tax - file and pay,” then “Sales tax web file.”
- From there, simply fill out the required fields and submit.
Before you get started, you should collect all the information about your taxable sales in New York during the previous quarter. The tax website suggests having these pieces ready:
- total sales and income
- total purchases and expenses
How to pay
Tax payments can be made directly in your Business Online Services account and must be made in US dollars.
Pay directly from your bank checking or savings account at the time you file for free. You can schedule your electronic payment in advance, up to the return due date. You may also save your bank account information for future payments.
It’s also possible to pay by credit card, but a fee will be added.
What to do in between registering and filing?
Well, you must comply with all the rules for New York sales tax! That means charging at least 4% sales tax and watching out for local level taxes, among other things.
For further reading that will help you stay compliant and successful as a remote seller, check out our Business Guide to Sales Tax in New York.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the tax authorities.