Tax News

CCH (cch.taxgroup.com) reports:

  The New York Department of Taxation and Finance has reversed its previous policy that excluded alcoholic beverage wholesalers from the statutory requirement of collecting and maintaining sales tax Resale Certificates (ST-120) for sales made to retailers. Starting February 15, 2010, alcoholic beverage wholesalers must get a properly completed Resale Certificate when they sell otherwise taxable products for resale (e.g., beer, wine, liquor) to an alcoholic beverage retailer.

  Previously enacted legislation required wholesalers of alcoholic beverages licensed by the New York State Liquor Authority to annually report certain information to the Department of Taxation and Finance, including:

  -- identifying information about their customers, including sales tax Certificate of Authority (COA) number or federal identification number, and

  -- information regarding sales to such customers.

  Some wholesalers have reported difficulty obtaining COA numbers or federal identification numbers. To address this concern, the department has changed its policy. Thus, for every sale made on or after February 15, 2010, without the collection of sales or use tax, wholesalers must obtain and maintain a properly completed ST-120 Resale Certificate or other appropriate exemption document.

  Because a Resale Certificate includes the retailer's COA number, wholesalers who obtain and maintain Resale Certificates will be able to satisfy the new legislation's reporting requirements. In addition, reporting the COA number will make it unnecessary for wholesalers to get federal identification numbers from customers.

  Penalties for noncompliance: Wholesalers may be held liable for the sales tax due, along with penalties and interest, on all transactions that are not supported by proper exemption documentation.

  The notice and alert can be found on the department's Web site at
http://www.tax.state.ny.us/enforcement/audit/alcbev.htm.

Notice, Alcoholic Beverage Wholesaler Annual Reporting Requirements, New York Department of Taxation and Finance, December 7, 2009; Audit Division Alert, New York Department of Taxation and Finance, December 3, 2009