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All About Sales Tax

About This Blog

Sales tax is one of the most interesting, and challenging, taxes. It’s interesting because it involves clients in every possible industry. Every active business has potential sales tax exposure, no exceptions!  And unfortunately sales tax compliance is particularly difficult for two, specific reasons.  First, the tax is perhaps the most fact-dependent – seemingly inconsequential changes in the underlying facts can transform a nontaxable sale into a taxable one.  Second, these rules are constantly changing.  It’s tough enough to keep up with these changes in just one state.  But many vendors, especially those selling over the internet, have to keep abreast of these changes in multiple states.  So it’s easy to fall behind on sales tax compliance. 

With this blog, we hope to keep you up to date on impactful changes in the sales tax compliance, especially in New York State.  We’ll review legislative and administrative changes in the sales tax; we’ll discuss new sales tax case law; and we’ll highlight the enforcement initiatives and tactics we’re seeing while defending businesses in sales tax audits.  We hope you find this content as interesting as we do.  Please contact us with any questions. 

Showing 2 posts from October 2020.

Contractors, Leasehold Improvements and Tax Exempt Entities

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The NYS Department of Taxation and Finance issued a new advisory opinion today concluding that a contractor installing a new floor for a tenant at JFK Airport can purchase glue tax free because the glue becomes an “integral component part” of real property owned by an exempt entity. JFK Airport is owned by the Port Authority of New York and New Jersey. 

The Master Has (Re)appeared!

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In a blogpost published earlier this year, we noted the fact that the number of sales tax advisory opinions published by the New York State Tax Department had diminished precipitously over the past few years, to the point that, in 2019, the Department published only one advisory opinion.  Just four years earlier, it had published 53.  Because sales tax is such a fact-specific tax (a subtle change in underlying facts can cause a transaction to go from being nontaxable to taxable[1]), and because the stakes are so high (possible personal liability for those running the business), we pleaded with the Department to return to its previous level of activity and to start churning out advisory opinions.  We indicated that the “[t]the students are here. We’re waiting for the master to (re)appear.”

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Hodgson Russ attorneys facilitate the U.S. legal aspects of transactions around the world. We practice in every major area of law and use multidisciplinary work teams to serve the specific, often complex, needs of our clients, which include public and privately held businesses, governmental entities, nonprofit institutions, and individuals.