Tax Return Filing Date Extended to July 15th

IRS NOTICE 2020-18 - Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic.

The due date for taxpayers to file Federal income tax returns (and make payments) has been extended from April 15, 2020 to July 15th, 2020. 

New York State announced the due date has been extended for filing personal income tax returns from April 15, 2020 to July 15th, 2020.   

New York E-File Mandate

I just received the following email from the New York State Department of Taxation and Finance reminding me that tax preparers are required by law to e-file all New York State personal income tax returns prepared. This e-file mandate is not new but currently, the e-filing system is down for maintenance (since November)  forcing tax preparers to either paper file a tax return or wait until the system is back up sometime in January. 

The NYS Tax Return Preparer E-File Mandate

Tax return preparers who previously prepared 10 or more tax returns in the previous year are now mandated to use tax software and electronically file tax returns. Additionally, tax preparers may not charge a separate fee for e-filing, and clients cannot opt-out of e-filing.

Tax Preparer Penalties for failure to comply with the E-File Mandate 

(1)  A $50 penalty per tax document not e-filed unless the tax preparer can document reasonable cause for not e-filing. 

(2)  A $500 penalty imposed on tax preparers charging clients a separate e-filing fee (first time) and $1,000 penalty for each subsequent charge.

I like e-filing as it makes things easier for both NYS and the tax preparer.  However, there will always be times when it is necessary to paper file specifically past due tax returns. 

National Tax Security Awareness Week

NYSDTF shares security tips during National Tax Security Awareness Week. 

Press Release 12/2/19

The New York State Department of Taxation and Finance today shared a variety of tips and advice to help taxpayers protect themselves and their personal information online. The effort to safeguard sensitive data coincides with National Tax Security Awareness Week, which runs through December 6.

“Taxpayers and tax preparers report incidents of fraud and identity theft throughout the year,” said Commissioner Michael Schmidt. "With a few simple steps, you can better protect your personal information to avoid becoming a victim of fraud and identity theft.”

The tax department created the infographic below to use as a resource to prevent fraud, scams, and identity theft. Enjoy

Sales Tax Guidance for Businesses with No Physical Presence in NY

I received an email from New York State Department of Taxation and Finance. The department has issued new guidance on changes affecting sales tax registration requirements for businesses having no physical presence in New York.

TSB-M-19(4)S requires businesses with no physical presence in New York to register as a vendor and collect and timely remit sales tax if in the preceding four quarters:

• Business made more than $500,000 in sales of tangible personal property delivered to New York. AND --->

• Business conducted more than 100 sales of tangible personal property delivered to New York.  

New York Sales Tax does not follow a calendar year the quarters are:  

• March 1 through May 31,
• June 1 through August 31,
• September 1 through November 30, and
• December 1 through February 28/29.

If you are an out of state business required to register see How to Register for New York State Sales Tax. If you need further assistance contact me.

New Exemptions to Driver License Suspension Program (NYSDTF)

I have previously written about New York State using the DMV and license suspension as a tax collection tool. There has been an update to the statute affecting license suspension for unpaid taxes.

Effective July 11, 2019, the New York State Tax Law was amended to include the following exemptions for taxpayers who: 

• Receive public assistance benefits as defined by the New York State Office of Temporary and Disability Assistance (OTDA);
• Receive Supplemental Security Income (SSI)
• Demonstrate that payment of past due tax liabilities would create a hardship in meeting necessary living expenses. 

Learn more about the New York State Department of Taxation and Finance Driver License Suspension here. For questions regarding driver's license suspension for unpaid taxes, contact the NYSDTF Civil Enforcement Division at 518-862-6000. 

No More Buying Items on Ebay Sales Tax Free

Do you remember NAPSTER? It was a peer-to-peer file sharing service. I was in college at Boston University during the golden age of Napster. I remember connecting speakers to my computer and investing a substantial amount of time building a music library. It was great! However, what was great for me was not great for the music industry that took legal action that would eventually shut down Napster.

As of June 1, 2019, EBAY is now required to collect sales tax on purchases shipped to New York. The benefit of shopping on ebay was the regular ability to find items cheaper online than brick and mortar stores. On top of that, sales tax was rarely collected because the seller did not have a physical presence or nexus with New York.

So what happened?

In a post Wayfair world states may now charge sales tax on purchases made from out-of-state sellers even if the seller does not have a physical presence (nexus) in the taxing state. It did not take long for New York State to enact sales tax legislation mandating "marketplace providers" to collect and remit sales tax on sales of tangible personal property that they facilitate for marketplace sellers. This sales tax legislation went into effect on June 1, 2019.

A marketplace provider is a person who, pursuant to an agreement, facilitates sales of tangible personal property by a marketplace seller or sellers.  A person "facilitates a sale of tangible personal property" when:

• the person provides the forum in which, or by means of which, the sale takes place or the offer of sale is accepted, including an internet web site, catalog, shop, store, booth or similar forum; and 
• the person, or an affiliate, collects the receipts paid by a customer to a marketplace seller for a sale of tangible personal property, or contracts with a third party to collect the receipts.  Persons are affiliated if one person has an ownership interest of more than five percent, whether direct or indirect, in another, or where an ownership interest of more than five percent, whether direct or indirect, is held in each of such persons by another person or by a group of other persons that are affiliated persons with respect to each other. 

To be considered a marketplace provider under the new law, a person or entity must meet both criteria listed above: (1) creating a marketplace connecting buyers & sellers; (2) collecting the proceeds of the sale from the buyer.  

Ebay is a marketplace seller as defined by the new legislation and has already started collecting sales tax on purchases being delivered to addresses in New York.  I believe this is an end of an error - no more buying items on ebay sales tax-free. 

For additional information and guidance see TSB-M-19(2)S 

NY Driver License Suspension for Unpaid Taxes