A business that is authorized to collect sales tax in New York State must report and remit any sales tax collected during each sales tax period in which it has a valid Certificate of Authority. A business is required to file annually, quarterly, or part quarterly, depending on the amount of taxable sales or sales tax collected. Whenever a business closes or makes certain other changes, the business must surrender its Certificate of Authority and file a final sales tax return.
This bulletin explains:
- when to file a final return,
- information on a final return,
- Web Filing your final return, and
- filing a paper final return.
It is very important to continue to file your sales tax returns until you have surrendered (turned in) your Certificate of Authority. This is true even if you owe no tax. If you discontinue business and do not file a final tax return, or do not turn in your Certificate of Authority, we may bill you for penalties for failing to file tax returns, which could lead to other collection activities. Following the rules set out in this bulletin will help you avoid this. For information about turning in your Certificate of Authority, see Tax Bulletin Amending or Surrendering a Certificate of Authority (TB-ST-25).
When to file a final return
You must file a final return and surrender your Certificate of Authority if you:
- cease business operations;
- sell, transfer, or assign your business; or
- change the form of your business (for example, from a sole proprietorship to a corporation). This requires registration of the new entity.
A final return must be filed within 20 days after you cease business operations or the sale, transfer, or change occurs. The back of the sales tax Certificate of Authority must be completed, and the certificate must be surrendered with the final return.
Information on a final return
Your final return must include the same information that you would include on a regular return. Report your sales, sales tax collected, and any use tax owed in the normal manner, and any special taxes or fees collected. Be sure to include any schedules that you would normally file with your return.
You must complete and sign your final sales tax return, and check the box on the return indicating that this is your final return. If you are filing a paper return and using a prior-period return, be sure that the sales tax rates and reporting codes are correct for the current period. See Tax Bulletin Sales Tax Rate Publications (TB-ST-820). Be sure to pay all sales and use taxes owed and turn in your Certificate of Authority as described in Tax Bulletin Amending or Surrendering a Certificate of Authority (TB-ST-25).
Web Filing the final return
If you have not already done so, you must register with Online Services to Web File your return. If the Web File return for the correct filing period is available at the time your final return is due, use the Web File return. When you Web File your final return, check the box indicating that it is a final return. Once you’ve completed the final return on the Web, you’ll be given an address to send your Certificate of Authority. You must surrender the certificate to the Tax Department; complete the questions on the back of the certificate, and mail it to the address provided. For more information about surrendering your Certificate of Authority, see Tax Bulletin Amending or Surrendering a Certificate of Authority (TB-ST-25).
There are certain instances when you will need to file a paper final return instead of Web Filing. If you are required to file Schedule N-ATT, Taxes on Parking Services in New York City, or Schedule FR, Sales and Use Tax on Qualified Motor Fuel and Diesel Motor Fuel, with your part-quarterly, quarterly, or annual sales tax return, you cannot Web File. You must file a paper final return.
If you normally Web File and the return for the final sales tax period of your business is not yet available, you must file a paper final return 20 days after you stop doing business or are otherwise required to surrender your Certificate of Authority. You will need to make the changes to the paper final return described below under the heading Changing a paper sales tax return for use as a final return.
Filing a paper final return
The Tax Department doesn’t produce a separate paper form for use as a final return. If you file a final paper return, you’ll need to modify the return appropriate for your filing status (annual, quarterly, or monthly (part-quarterly)):
- Annual filers: use Form ST-101, New York State and Local Annual Sales and Use Tax Return.
- Quarterly filers: use Form ST-100, New York State and Local Quarterly Sales and Use Tax Return.
- Part-quarterly (monthly) filers:
- for any monthly period in which the business was still operating, use Form ST-809, New York State and Local Sales and Use Tax Part-Quarterly Return, and
- use Form ST-810, New York State and Local Quarterly Sales and Use Tax Return for Part-Quarterly Filers.
Annual filers. If you close your business on January 5, 2010:
- file a final Form ST-101 covering the period March 1, 2009 (the beginning of the annual sales tax period), through January 5, 2010 (due January 25, 2010).
Quarterly filers. If you close your business on January 5, 2010:
- file a final Form ST-100 covering the period December 1, 2009 (the beginning of the fourth sales tax quarter), through January 5, 2010 (due January 25, 2010).
Part-quarterly (monthly) filers. If you close your business on January 5, 2010, file all of the following:
- file Form ST-809 for the period December 1, 2009, through December 31, 2009, (due January 20, 2010); and
- file Form ST-809 for the period January 1, 2010, through January 5, 2010, (due January 25, 2010); and
- file Form ST-810 for the period December 1, 2009, through January 5, 2010 (due January 25, 2010).
Changing a paper sales tax return for use as a final return
You may need to correct or alter two areas when filing a final return (see illustration below for location):
- tax period dates
- filing period indicator
For example, a quarterly filer that ceased business on January 5, 2010, would need to alter Form ST-100 as follows:
1. Cross out the tax period dates (in this case, September 1, 2009 – November 30, 2009).
2. Completely black out the filing period indicator.
3. Write in the correct filing period indicator (see Tax Bulletin Filing Period Indicators on Final Sales Tax Returns (TB-ST-270) for assistance).
4. Write FINAL RETURN across the top of the return form.
5. Check the box that says Final return.
The top of your final return should look something like this:
Note: A Tax Bulletin is an informational document designed to provide general guidance in simplified language on a topic of interest to taxpayers. It is accurate as of the date issued. However, taxpayers should be aware that subsequent changes in the Tax Law or its interpretation may affect the accuracy of a Tax Bulletin. The information provided in this document does not cover every situation and is not intended to replace the law or change its meaning.