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Software Marketplace Jointly Liable for NY Sales Tax Collection

Taxes
TaxesSoftware Marketplace Jointly Liable for NY Sales Tax Collection

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.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

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Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

One thought on “Software Marketplace Jointly Liable for NY Sales Tax Collection”

  1. New York going bankrupt and grasping for anyone they can squeeze. thanks supreme court for siding with insane states about tax collection.

    May New York and other states start learning how to run their economies correctly and they won’t be in such dire situations.

    I have no sympathy for a state the sky rockets it taxes and unfairly impedes its own economy.

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