By Dov Klein  |  November 23, 2016

The facts…

A recent advisory opinion (TSB-A-16(28)S) issued by the New York State Department of Taxation and Finance (the “Department”) has concluded that a vendor required to collect sales tax may not “absorb” collected sales tax into its hourly rate.

Tax Law also provides that the person required to collect tax is required to separately state the tax on any invoice, or other statement of the transaction provided to the customer. The Department has stated that, “The words tax included or words of similar import, on a sales slip or other document, do not constitute a separate statement of the tax, and the entire amount charged is deemed the sales price of the property sold or services rendered.”

Read the entire advisory opinion here.

What this means for you…

Vendors are cautioned to separately state the sales tax on all taxable transactions – and thus avoid underpayment of tax, related interest and penalties.

For more information

If you have questions about this brief, please contact Dov Klein, Partner, Real Estate Group, by phone at 212.324.7073 or by email at or any of our tax professionals.

About Dov Klein

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Dov Klein, CPA, is a Partner in the Real Estate Group at Marks Paneth LLP.  He brings more than 30 years of experience including conducting audits, reviews and compilations of financial statements for clients in various industries including importing and distribution, diamond and jewelry, hospitality, health care and manufacturing.  His practice is concentrated in the following industries: construction (general contractors, construction management and trade contractors), real estate development, rental real estate operations, hotels and wholesale... READ MORE +

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