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An overview of the sales and use tax

| Nov 14, 2019 | Federal And State Tax Collections |

Like other states, New York imposes a tax on the sale of certain retail goods and services. Also like other states, the law allows cities and other local governments within New York to impose their own additional sales taxes.

Although consumers may think otherwise, it is actually the merchant that bears the responsibility to the state or local government to pay whatever sales tax is owed. When the merchant charges a sales tax over and above the cost of the item or service, it is on a practical level just recouping the money that it will owe to the state regardless. The merchant should be careful to set aside this money and pay it in a timely fashion to the state.

Likewise, although perhaps less of an issue than sales tax, some businesses may owe what is called use tax. This type of tax serves as a backstop to New York’s sales tax laws since, without the use tax, a company could avoid paying sales tax simply by buying goods in another state or online.

Like other taxes, state and local authorities take the payment of use tax and sales tax seriously. Particularly when a business is under some financial stress, it can be easy for it to fall behind in remitting sales tax. Likewise, for this or for other reasons, a business may discover that it owes thousands of dollars in use tax.

Should a business in the White Plains area find itself behind in paying these taxes, it may be subject to state collection efforts. These efforts can force a business into closure. It therefore may be important for a business which is behind in paying these taxes to seek out legal assistance.