New York requires you to pay sales tax on out of state purchases on your state tax return.
I always pay the maximum; I expect it is actually a bit unstated for the purchases I made.
Although I specifically told my accountant to include it when he prepared my tax return, he didn't; and I didn't notice until now.
I suppose I can pay it when they audit me... does leaving it out make an audit more likely? (ie., did he do me a favor or screw me?)
My accountant told me that it is her understanding that if you put in zero, they are very likely to come back and ask you to prove it.
I went through my credit card statements the first year to figure out how much I'd mail ordered from out of state and was surprised to find that the state's default number was considerably less my actual amount.
Regards, John Levine, snipped-for-privacy@iecc.com, Primary Perpetrator of "The Internet for Dummies", Information Superhighwayman wanna-be,
You could file an amended return & put in the use tax.
I don't have any experience with NYS auditing tax returns on this issue. However, my expectation is that the state could subpeona mail order & internet sites for their customer lists & then send out assessments. The tax returns that match the list & report ZERO will likely be assessed first.
That option is not available in NY. A NY amended income tax return (IT-150X or IT-201X) cannot be used to change the sales tax originally reported. You must file a separate use tax form. (ST-140 to pay more; AU-11 to pay less) See the instructions on the IT-201X.
IIRC, only about 6% of New Yorkers are reporting sales tax on their returns. The state is looking at ways to increase this number, but wholesale audits of 94% of all filers doesn't seem feasible.
"Don Priebe" wrote
The probability exists that a good portion of these folks purchase everything from local retailers, paying the state sales tax at that time to the retailer. But that would leave a better chunk of the 94% that probably bought something over the internet or through a catalog and bypassed the state sales tax.
Costs to audit someone -v- the expected return of tax may be a good reason to avoid wholesale audits for what might amount to a few bucks per taxpayer.
I looked up ST-140. The value for line 1 is the same as the safe harbor amount on IT201. But on ST-140 it only covers purchases under $1000; larger items have to be declared on line 2.
So if I purchased an outofstate item for $1,500, I will end up paying $120 more on ST-140 than on IT201. Do I have it right?
My accountant says he will refile my returns if I want (I also have a corrected 1099INT and a K1 that came in after the taxes were filed) and I can fix the sales tax on the amended return. You are telling me he is incorrect and the sales tax cannot be fixed on a IT201X? Just want to be sure I have it right.
How are you supposed to prove a negative?
Seth
If the mail order site doesn't have enough nexus to collect NYS sales tax, why would it have to comply with a NYS subpoena?
Seth
Nexus for legal purposes is typically different than nexus for income tax purposes which is typically different than sales tax nexus. Do they have nexus for a subpoena? Sorry ask a lawyer.
-- Drew Edmundson, CPA Cary, NC
See the instructions for line 59 on page 7 of the IT-201X at
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