New York State Sales Tax Extension, Handling Past Due Taxes & More

When the sales tax filing date came around in March, many businesses, who are struggling due to COVID19, may have been scrambling to scrape a few dollars together to remit sales tax returns and pay taxes due on time.

Luckily for those of you who missed the deadline, Governor Cuomo’s Executive Order 202.32 has extended the filing and payment date for quarterly and annual sales tax until June 22, 2020. However, taxpayers must apply for relief.

N-20-6 -Extension to June 22, 2020 for Quarterly and Annual Sales Tax

Originally, the extension to file sales tax and remit payment was set for May 19th, but Governor Cuomo extended this deadline to June 22nd. Please visit the New York State Department of Taxation website to request relief. For general information about the extension see N-20-6.

With this extension, many of you can pause with a sigh of relief. However, if you have past due quarters, now is the time to come forward with a fresh start.

Voluntary Disclosure

If you have past due back sales taxes (or taxes of any kind), have not filed sales tax returns to New York State, and are not being audited, you can make an agreement with New York State to pay past due taxes. The benefits of a voluntary disclosure are penalty abatement and avoiding prosecution for fraudulent conduct related to the sales taxes in question. Visit the New York State Department of Taxation and Finance website for details.

Planning for Sales Tax

Sales taxes are known as trust fund taxes because you collect the tax from your customer and hold it in trust for the state. So technically, your customer pays the tax to New York at the time of sale and you as a business owner simply hold the taxes to be paid to New York State at a later date. So when you collect these taxes, the money belongs to the State, not you. Set up a separate bank account to keep the collected sales taxes and then when the due date for taxes comes, the money will always be in the account. Starting in 2011, New York State suggests that businesses establish a separate bank account for sales taxes and may even require it for some businesses. For additional details, visit the New York State Department of Taxation and Finance website.

This information is provided for general informational purposes only. No information contained in this article should be construed as legal advice and does not establish an attorney-client relationship.