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Thread: Getting New Sales Tax Certificate when Selling Assets Soon? (New York State)

  1. #1

    Question Getting New Sales Tax Certificate when Selling Assets Soon? (New York State)

    Hi,
    I run a couple websites that sell products online. I got a sales tax 'certificate of authority' from New York State when I first started as a sole proprietor.

    3 months ago (end of Oct 2018) I converted to a Single Member LLC. The sales tax 'certificate of authority' certificate from New York State says that you when you change business formation you need to surrender your current certificate and apply for a new one.

    I'm looking to sell these 2 websites (which are the only reason I collect sales tax in the first place) towards the end of the year.

    My questions are:

    1. Is it worth getting a new certificate of authority for this new formation, even if I'm selling these assets this year? I don't plan on collecting sales tax after they are sold.

    2. If I continue to collect sales tax under the current certificate (before turning into a SMLLC) is that a problem/illegal?

    3. The certificate says to file a final sales tax return within 20 days of change of business status. I'm clearly passed that 20 day mark from the time that the SMLLC was created, but I'm still waiting on the newspaper circulation from New York state to make it 'complete'. When would be it be determined that my formation actually 'changed' and is this a problem? (The attorney who did my LLC said it was ok to wait for the New Year)

    If there are any NY tax attorneys in here who do hourly consulting I may also be interested in a call.

    I appreciate any insights you may have!

    Thanks in advance,

    Mike

  2. #2
    Mr. Tax Man
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    You're asking a very specific question to NYS, which is not my expertise. You can call the state to ask a general question and they may be able to answer. The short answer is yes, you're probably supposed to get a new certificate of authority. From the state's perspective, an LLC is a separate legal entity from a proprietor, it doesn't matter you're disregarded for income tax purposes. No such status exists for sales tax purposes. In fact, often sales tax is location-based so if you had two separate offices, you often have to have two separate licenses.
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

  3. #3

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    Quote Originally Posted by Evan View Post
    You're asking a very specific question to NYS, which is not my expertise. You can call the state to ask a general question and they may be able to answer. The short answer is yes, you're probably supposed to get a new certificate of authority. From the state's perspective, an LLC is a separate legal entity from a proprietor, it doesn't matter you're disregarded for income tax purposes. No such status exists for sales tax purposes. In fact, often sales tax is location-based so if you had two separate offices, you often have to have two separate licenses.
    Thanks for the note

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