New York State 2019 Budget Brings Major Sales Tax Changes

[May 3, 2019] Last month, New York state passed its 2019 budget which contained some major changes for sales taxes and fees in the state. Most prominent of these changes was the imposition of sales tax liability on online marketplaces beginning June 1, 2019. While the Department of Taxation and Finance had issued an advisory opinion earlier in the year indicating that it would likely hold such marketplaces liable for the sales of remote sellers the budget now makes the requirement explicit in the sales tax law itself.

The budget also increased the sales tax on passenger car rentals. The special supplemental tax on the rental of passenger cars within the Metropolitan Commuter Transportation District (MCTD) was increased from 5% to 6%, and an additional 6% special supplemental tax on areas of the state outside of the MCTD was also imposed. Both taxes are in addition to the existing statewide special tax of 6%. Beginning on June 1, 2019 passenger cars throughout the state will, therefore, be subject to 12% special tax in addition to state and local sales tax.

Other changes contained in the New York state budget include:

  • The creation of a new point of sales tax on the sale of vapor products.
  • Adjustments to the sales tax treatment of sales of food through vending machines.
  • Elimination of reduced sales tax rates on some supplies of electricity.
  • The addition of exemption from sales tax for tangible personal property incorporated into monuments.
  • Extension of expiration date for the waste tire fee until December 31, 2022.
  • A statewide ban on plastic carryout bags beginning March 2020.
  • Authorization for counties and cities to impose a 5-cent fee on paper carryout bags beginning March 2020.
  • The creation of a new excise tax on the sale of opioids.

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Author

Andrew Decker

Andrew Decker is a Junior Regulatory Counsel at Sovos Compliance. Working within Sovos’ Regulatory Analysis Department, Andrew’s work centers on indirect taxes (VAT, GST, Sales Tax), with a particular focus on jurisdictions in Europe and Asia. Andrew is a member of the Massachusetts Bar with a J.D from Northeastern University School of Law and a B.A. from Bates College.
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