Policy for employees, employers, and businesses temporarily in New York State because of Hurricane Sandy
The Tax Department has adopted an audit/compliance policy with respect to businesses and individuals present in New York State on a temporary basis as a result of Hurricane Sandy. Under this policy, the Department will not assess corporate franchise taxes, withholding taxes, personal income taxes, or any penalty or interest related to those taxes, in the situations described below. Note: The policy does not apply to sales tax requirements or to any other taxes not specifically discussed below.
Corporations that otherwise do not have nexus with New York State will not be considered to have nexus for corporation tax purposes prior to January 1, 2013, if the corporation:
- sends employees into New York State temporarily to work solely as part of the Hurricane Sandy relief efforts; or
- establishes a temporary office or other place of business in New York State because of the effects of Hurricane Sandy on the corporation's business location outside of New York State.
If the corporation has employees or an office or other place of business in New York State after December 31, 2012, then the corporation will have nexus as of January 1, 2013.
An employer will not be required to withhold New York State income tax (or Yonkers nonresident earnings tax, if otherwise applicable) from wages paid prior to January 1, 2013 to employees who are nonresidents of New York State, and who are:
- temporarily working in New York State solely as part of the Hurricane Sandy relief efforts; or
- working in New York State solely because the employer temporarily relocated employees to New York State or temporarily established an office in New York State because of the effects of Hurricane Sandy on the employer's business location outside of New York State.
If the employee will be working in New York State after December 31, 2012, then the employer will be required to withhold tax beginning January 1, 2013.
If an employer has already withheld New York State income tax from an employee covered by this policy, then it should refund the tax withheld to the employee. See Overcollections in Publication NYS-50, Employer's Guide to Unemployment Insurance, Wage Reporting, and Withholding Tax.
Self-employed individuals and employees who are nonresidents of New York State who do business or work in the state will not be held liable for New York State personal income tax (or Yonkers nonresident earnings tax, if otherwise applicable) for income earned in New York State prior to January 1, 2013, if they:
- are temporarily doing business or working in the state solely as part of the Hurricane Sandy relief efforts; or
- are temporarily doing business or working in the state solely because they were relocated to New York State due to the effects of Hurricane Sandy on their own or their employer's business location outside of New York State.
If an individual described above works or does business in New York State after December 31, 2012, then he or she will be subject to New York State income tax on all of their income earned in New York State on or after January 1, 2013.
Sales tax requirements
Any business that sells taxable tangible personal property or provides taxable services in New York State must register as a sales tax vendor and collect and remit sales tax. This requirement applies regardless of how long the company is doing business in New York State.
For information on registration requirements and procedures:
Products and services subject to tax
Many products and services sold by businesses as a result of the storm are subject to New York State sales tax. For detailed information about what sales are subject to tax, see Tax Bulletin Quick Reference Guide for Taxable and Exempt Property and Services (TB-ST-740).
Services subject to sales tax include the services of repairing, maintaining, and installing tangible personal property, and repair and maintenance of real property. Examples of taxable maintenance services include:
- trash/debris removal;
- tree removal;
- repairing damaged windows, roofing, siding, drywall, electrical wiring; and
- appliance repair.
If you are a contractor or repair person, you must also be aware of the sales tax rules regarding exempt capital improvements and taxable repair/maintenance services. See Sales tax guidance - Contractors/repair persons.
Sales tax returns
Once you're registered for sales tax purposes in New York State, you must file sales and use tax returns with the department. Tax Bulletin Filing Requirements for Sales and Use Tax Returns (TB-ST-275) explains the filing requirements.
Sales Tax Web File, one of our Online Services, allows you to file your sales tax return quickly and for free. It's secure, saves paper, and you'll receive online confirmation of your filing. We offer a number of instructional presentations to help you get started. View demos and videos.
Once your out-of-state company is no longer conducting business in New York State, you must file a final sales tax return. See Filing a Final Sales Tax Return (TB-ST-265) for more information.
Income tax treatment of certain disaster relief payments
If an individual receives a disaster relief payment that is excluded from the federal taxable income under section 139 of the Internal Revenue Code, then the payment is also excluded from New York State taxable income. This exclusion applies to payments from employer to employees or payments from any other party.
For more information on the federal treatment see, IRS Announces Qualified Disaster Treatment of Payments to Victims of Hurricane Sandy.