When a business reaches certain revenue, employee or tax liability thresholds its obligations in regards to filing and paying various taxes changes. Business owners must be aware of these changes to their tax reporting and payment requirements to remain in compliance with the tax code. CPAs, professional tax preparers and business advisors should be consulted to determine a business’ specific tax reporting and payment obligations to avoid problems with the state’s Tax Department.

A number of key requirements that change with a business’ growth are outlined below.

Sales Tax Returns

When a business is required to file an Annual Sales Tax Return and will owe more than $3,000 in sales taxes for the annual filing period that business must begin to file Quarterly Sales Tax Returns. Detailed information on these filing requirements is contained in the Department of Taxation and Finance’s “New York State and Local Annual Sales and Use Tax Return” form (Form ST-101) and pertinent instructions.

Should a business that files Quarterly or Annual Sales tax Returns have a combined total of taxable receipts, purchases subject to tax, rents, and amusement charges of $300,000 or more in a quarter, the business must begin to file Monthly Sales Tax Returns in the first month of the next sales tax quarter. The Tax Department’s “New York State and Local Quarterly Sales and Use Tax Return” (Form ST-100) and “New York State and Local Annual Sales and Use Tax Return” (Form ST-101) forms, with their relevant instructions, contain the information a business needs to properly file its returns and remain in compliance with the tax code.

Employee Reporting & Withholding

A business that hires more employees must report basic information on each new hire to the Department of Taxation, including name, address and Social Security Number.

In addition, businesses must withhold payroll taxes from their employees in accordance with the tax code. When the amount of this withholding is $700 or more in a calendar quarter, the firm must remit the withheld amount to the Tax Department after each payroll period.

Information on employee information reporting and withholding issues can be found in the Tax Department’s “Employer’s Guide to Unemployment Insurance, Wage Reporting and Withholding Tax” (Publication NYS-50).

Changes in Business Structures and Acquisitions

If a business changes its legal structure in any way, such as changing from a partnership to a corporation, it must file a “Notification of Sale, Transfer or Assignment in Bulk” (Form AU-196.10) with the Tax Department. In addition, the change in structure may trigger the need to change the business’ Sales Tax registration status and its tax filing period (i.e. from annually to quarterly or even monthly).

A Notification of Sale, Transfer or Assignment in Bulk form must also be filed if the business partly or fully acquires another existing business.

Businesses with employees may be required to change their Unemployment Insurance and Withholding Tax registration when changing their legal structure, which also could have an effect on their Workers’ Compensation and Unemployment Insurance coverage. Therefore, a business changing their structure should contact their insurance providers to determine the potential impact of the registration change. Additional information can be found in the Tax Department’s “Employer’s Guide to Unemployment Insurance, Wage Reporting and Withholding Tax” (Publication NYS-50), which may require the filing of a “New York State Employer Registration for Unemployment Insurance, Withholding and Wage Reporting” form (Form NYS-100).

Specific Businesses

Microbrewery
A microbrewery must change the filing period of their “Beer Tax Return (and Similar Fermented Malt Beverage)” (Form MT-50) from annually to quarterly or monthly if either of the following conditions occur:

a) the brewery’s annual beer production increases to exceed 60,000 barrels (1,860,000 gallons)

b) the brewery imports beer

Producing, Possessing or Selling Cigarettes or Other Tobacco Products
Firms that produce, possess or sell cigarettes or other tobacco products are required to file certain forms with the Tax Department when they change or add retail or vending machine locations and/or transfer their licenses. For example:

a) Firms changing locations or registering more retail or vending locations must file the “Application for Retail Dealers and Vending Machines for Sales of Cigarettes and Tobacco Products” (Form DTF-716)

b) An Agent or Agent/Wholesale Dealer transferring a license must file the “Application for License as a Cigarette Agent or Agent/Wholesaler” (Form CG-100-A)

c) A Wholesale Dealer transferring a license or adding locations must file the “Application for License as a Wholesale Cigarette Dealer Other Those Who Only Operate Vending Machines” (Form CG-100-W)

d) A Vending Machine Operator transferring a license must file the “Application for License as a Wholesale Cigarette Dealer Who Only Operate Vending Machines” (Form CG-100-V)

e) A retailer increasing to more than 15 outlets may qualify as a ‘chain store,’ possibly providing the ability to buy product at lower prices, so must file the “Application for Registration as a Chain Store” (Form CG-80)

“Waste Tire Returns”
Any firms filing “Waste Tire Returns” must file a “Waste Tire Management Fee Quarterly Return” (Form MT-170-MN) for each outlet that files a “Sales Tax Return.” However, if only a single Sales Tax Return is filed for all outlets, then only a single Waste Tire Management Fee Quarterly Return needs to be filed.

Conclusion
Businesses that reach or exceed specific levels of revenue, staffing or tax payments often must meet new tax reporting and payment requirements. Therefore, business owners should consult with CPAs, professional tax preparers and business advisors familiar with the New York State tax code to ensure compliance with the code and protect their business success.

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