DMV-DIRECT Newsletter November 2016
N o v e m b e r | 1 6
Fo r you r dea l e r s h i p’s b i l l i ng c l e r k s , t i t l e p ro c e s s o r s and o f f i c e manage r
NEW YORK STATE SALES TAX: HOW TO DETERMINE RESIDENCY
Exemption for Out-of-State Commuters Customers who commute to New York from another state (New Jersey, Connecticut, Massachusetts, etc.) and purchase a vehicle here are exempt from New York State sales tax, if they meet specific criteria set by the NYSDTF. On their DTF-820 form, they must certify that they: - Are not carrying on any employment, trade, business, or profession in New York State in which the vehicle will be used. (Commuting to and from work does not qualify, on its own.) - Do not intend to register the vehicle in New York State. The dealer must accept the form in good faith. Though if any of the above are found to be false, the dealer is obligated to collect New York State sales tax in the transaction. Civil and criminal penalties may be imposed for misuse of this exemption. - Are not a resident of New York State. - Do not have a place of abode here.
New York dealerships are legally obligated to collect and remit New York State sales tax for any transaction where the customer is a New York resident. Failure to do so can incur drastic financial penalties. Unfortunately, the question of residency is not always clear cut. The State Department of Taxation and Finance’s (NYSDTF) Publication 838 — A Guide for Sales Tax for Automobile Dealers — states that “for Sales tax purposes, an individual is a resident of the state and of any locality in which he/ she maintains a permanent place of abode.” That “place of adobe” can be established in a number of ways: • If a customer wants to register their vehicle in another state, but still holds a NY driver’s license, it’s fair to assume they maintain an abode here. • Vacation homes in NYS also qualify; this includes mobile in-state residences, such as trailers or houseboats. • Students attending college out-of-state are still NY residents, as are military servicepersons stationed out-of- state. NYS sales tax must also be collected when a vehicle is being registered to a business in New York. If a corporation is incorporated under the laws of New York, it qualifies as a New York business. Purchasers who state that they do not reside — even partially — in New York State must confirm this by completing a DTF-820 form (Certificate of Non-Residency of New York State and/or Local Taxing Jurisdiction). If a customer does not complete this form and feels they were taxed in error, they can go online to tax.ny.gov and apply for a refund of overpaid sales tax.
18-10 Whitestone Expressway, Whitestone, NY 11357 • 718.747.0400
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