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Taxes / State tax rules / New York

Selling on eBay, Poshmark or Etsy from New York: sales tax and 1099-K rules

On a marketplace sale delivered to a New York address, the marketplace provider collects New York State and local sales tax, but the Tax Department says a New York home-based business selling solely through marketplaces still needs a Certificate of Authority, while an out-of-state seller registers only past $500,000 and more than 100 sales, marketplace sales included. The Tax Department pages we checked say nothing about a separate New York 1099-K rule.

General information, not tax advice. Check with a tax professional about your own situation.

Checked against the official pages listed below on .

New York in short

General sales tax:
Yes, 4% state rate
Marketplace facilitator law:
Yes: N.Y. Tax Law §§ 1101(e) and 1132(l), since Jun 1, 2019
When a marketplace must collect:
for a provider with no physical presence in New York, more than $500,000 in sales of tangible personal property delivered in the state and more than 100 such sales
Form 1099-K:
No state rule stated on the pages checked

Who collects the tax on a marketplace sale

The marketplace provider collects New York State and local sales tax on taxable sales of tangible personal property it facilitates that take place in New York or are delivered to a New York address, regardless of where the seller is located or whether the seller must register. It must give sellers Form ST-150 within 90 days or post approved agreement language.

If you sell only through marketplaces

The Tax Department's FAQ says a New York home-based business selling solely through a marketplace that collects for it still needs a Certificate of Authority and files periodic returns, reporting marketplace sales as gross and nontaxable sales. An out-of-state seller counts marketplace sales toward the $500,000 and more-than-100-sales test; in advisory opinion TSB-A-24(52)S the Department said an out-of-state marketplace seller with no other New York sales did not need to register.

Registration, resale certificates and what changes when you also sell direct have their own page: New York: seller's permit and resale certificate rules.

The law: N.Y. Tax Law §§ 1101(e) and 1132(l), effective .

"You still need to apply for a Certificate of Authority to be a sales tax vendor and file periodic returns even if the tax was collected for you."
New York State Department of Taxation and Finance, Sales tax requirements for marketplace providers, FAQ: My home-based business in New York State sells handmade items solely through a marketplace provider
"Should I include sales I make through an online marketplace into New York when determining if we meet the requirements? Yes, those sales should be included in the calculation."
New York State Department of Taxation and Finance, Registration requirement for businesses with no physical presence in New York State, FAQ
"These amendments apply to sales made on or after June 1, 2019."
New York State Department of Taxation and Finance, TSB-M-19(2.1)S, Sales Tax Collection Requirement for Marketplace Providers, page 1
"the marketplace seller would not be required to register for sales tax if it makes no sales to New York customers other than those facilitated by the marketplace provider."
New York State Department of Taxation and Finance, Advisory Opinion TSB-A-24(52)S, Discussion

Sources: Sales tax requirements for marketplace providers; Registration requirement for businesses with no physical presence in New York State; Advisory Opinion TSB-A-24(52)S; TSB-M-19(2.1)S, Sales Tax Collection Requirement for Marketplace Providers.

New York's sales tax

The New York State rate is 4%, and counties, cities and school districts add local tax; Publication 718 lists the combined rate and reporting code for each jurisdiction.

Sources: Publication 718, New York State Sales and Use Tax Rates by Jurisdiction (2/25).

Form 1099-K: New York and the federal test

The Tax Department's marketplace, registration and advisory pages read for this page say nothing about a New York Form 1099-K requirement.

The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." (Understanding your Form 1099-K, reviewed ). The Instructions for Form 1099-K count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in Form 1099-K for resellers.

Sources: Sales tax requirements for marketplace providers; Registration requirement for businesses with no physical presence in New York State.

Worked examples

State tax on a $40 marketplace sale to Albany

At the 4% state rate alone, a $40.00 taxable item carries $1.60 of New York State sales tax; the local rate for the delivery address is added on top. The marketplace collects both.

Out-of-state seller: both tests have to be met

An out-of-state seller ships $520,000 of goods into New York over the last four sales tax quarters in 90 large orders, some through marketplaces. Marketplace sales count, so the dollar test is met, but 90 is not more than 100 sales, so the Department's presumption does not require registration. At $520,000 and 140 sales, both tests would be met.

In-state hobby seller, marketplace only

A seller in Buffalo sells $3,000 of crafts a year, all through one marketplace that collects New York tax. The Department's FAQ says this home-based business still applies for a Certificate of Authority and reports the $3,000 as gross sales and as nontaxable sales on each return.

Edge cases and details

  • New York measures the out-of-state test over the immediately preceding four sales tax quarters, not a calendar year; December 1 through February 28 or 29, for example, is one sales tax quarter.
  • The Department's FAQ says consignment shops, auctioneers, flea markets and vendors with leased departments can also be marketplace providers.
  • A registered seller is still responsible for tax on taxable transactions a marketplace facilitates that are not sales of tangible personal property, the Department says.
  • TSB-A-24(52)S notes that keeping inventory at an unaffiliated New York fulfillment center does not by itself create nexus if the center only accepts orders, answers customers, bills and ships; an advisory opinion binds the Department only for the person it was issued to.
  • On June 24, 2019 the out-of-state provider threshold was raised from $300,000 to $500,000, retroactive to June 1, 2019, TSB-M-19(2.1)S says.

What to do

  1. If you are based in New York, read the Department's marketplace FAQ on Certificates of Authority before assuming marketplace-only sales mean no registration, and check with a tax professional.
  2. If you are outside New York, total New York-delivered sales from every channel over the last four sales tax quarters and count the sales; both the $500,000 and the more-than-100 tests must be met.
  3. Keep each marketplace's Form ST-150 or its public statement that it collects New York tax, and its New York sales reports.

Common questions

Do I need a New York Certificate of Authority if I only sell on marketplaces?

If your business is in New York, the Tax Department's FAQ says yes: a home-based business selling solely through a marketplace that collects for it still applies for a Certificate of Authority and files periodic returns. For an out-of-state seller, advisory opinion TSB-A-24(52)S, issued to one seller, concluded it did not need to register while it made no New York sales outside the marketplace.

Do marketplace sales count toward New York's $500,000 test?

Yes. The Department's registration FAQ says sales made through an online marketplace into New York are included in the calculation, and the seller must also have more than 100 sales.

When did New York marketplace providers start collecting?

For sales made on or after June 1, 2019, according to TSB-M-19(2.1)S.

What is Form ST-150?

The Marketplace Provider Certificate of Collection. A provider gives it to sellers within 90 days of sales it facilitates, or posts agreement language saying it collects New York tax, so the seller can show why it did not collect.

Related

General information, not tax advice

This page summarizes New York's own published pages and statutes as read on , and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department.

Sources

Official pages this page is built from, with the day each was read.

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