Sales Tax Articles
Sales Tax State Activity Update - September 2008
New York Boggled by "Bling, Bling" Nexus
The New York State Department of Taxation and Finance has received and thus issued an advisory opinion on the sales of jewelry through a television program from Gems TV USA Limited.
Gems TV USA Limited, a Delaware corporation, sells jewelry directly to customers through television and the Internet. They do not have any physical locations nor have any agents soliciting sales in the state of New York.
Per the New York Department of Taxation and Finance, the fact that Gem TV USA merely advertises via television stations in New York does not create nexus in and of itself. However, New York states, "It is beyond the scope of this Opinion to conclusively determine whether Petitioner has nexus with New York.", meaning it needs more clarifications to determine Gem TV's nexus eligibility.
The fact that the purchases are shipped to residents in New York is deemed to be taxable, despite where the orders may be taken. The sales tax may be collected through Gem TV and remitted to the New York Tax department, or the New York resident has the obligation of remitting what's called the "compensating use tax." This compensating use tax imposes a tax equal to what the sales tax would be on any goods or services used or received in New York that would normally have been subject to sales tax.
The full text of the New York Tax Department's advisory opinion may be accessed at the New York State Department of Taxation and Finance Web site.
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