A reader forwarded us an Advisory Opinion from the New York State Department of Taxation and Finance on an issue of sales tax collection.
The operator of an online marketplace for asked the state about its responsibilities when it comes to sales tax collection. In summary:
“The Department of Taxation and Finance received a Petition for Advisory Opinion from REDACTED (Petitioner). Petitioner asks whether, as a result of operating an online marketplace in which it facilitates taxable sales by independent software vendors (ISVs), it qualifies as a vendor for sales tax purposes and what the consequences of such status would be.
“We conclude that, assuming that Petitioner has sufficient nexus with the State and the ISV qualifies as a vendor for sales tax purposes, it is within the discretion of the Commissioner of Taxation and Finance to treat Petitioner as a vendor based on such activities, in which case Petitioner would be jointly liable with the ISV to collect sales tax and must assume all the responsibilities of a vendor.”
It would help if we the identity of the petitioner to know which other companies might be similarly impacted. A cynic might say if you ask a tax collector if you are responsible for paying taxes, the answer will always be yes.
Here’s a link to New York’s advisory opinion, if you’re a tax wonk, let us know what you think this means and which companies might be impacted.