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Introduction 

If you are registered for sales tax purposes, you can claim a credit for sales tax you overpaid, paid by mistake, or collected but then repaid to your customers. You can then apply the credit to reduce the tax you owe on your sales tax return. This bulletin explains what you need to know when applying for a sales tax credit.

If you prefer, you may apply for a refund of the sales tax instead. Information for applying for a sales tax refund can be found in Tax Bulletin How to Apply for a Refund of Sales and Use Tax (TB-ST-350).

The following credits are not discussed in this bulletin.  Use the links provided for additional information about these credits.

• Vendor collection credit. See Tax Bulletin Vendor Collection Credit (TB-ST-925).
• Reciprocal tax credits. See Publication 39, A Guide to New York State Reciprocal Credits for Sales Taxes Paid to Other States.
• QEZE credits. See TSB-M-09(12)S, Changes to Qualified Empire Zone Enterprise (QEZE) Program (Articles 28 and 29) - Effective September 1, 2009, Form AU-12, Application for Credit or Refund of Sales or Use Tax—Qualified Empire Zone Enterprise (QEZE), and Schedule W, Report of Purchases Eligible for Credit by a Qualified Empire Zone Enterprise (QEZE).
• Empire Zone credits. See Publication 30, A Guide to Sales and Use Tax Incentives Within Empire Zones. 

How to apply for a sales tax credit

In general, you must send in a properly completed Form AU-11, Application for Credit or Refund of Sales or Use Tax, to apply for sales tax credits. You may then use these credits when you calculate the tax due on your sales tax return.

When you file Form AU-11, you must explain the reason for the credit claim. Some examples of when you may claim a credit are:

• You gave a customer a credit or refund of sales tax collected on an item or service because the customer returned the item or did not use the service, and the tax was sent to the Tax Department with a prior return.
• You gave a customer a credit or refund for sales tax collected because the customer gave you an exemption certificate after you sent in the tax with your return.
• You are a contractor or repairman and paid sales tax on materials used on a taxable repair and maintenance job.
• You made an overpayment on a prior return.

All credits will be reviewed by the Tax Department when you mail in both the AU-11 and the sales tax return where you use the credit. We cannot review and approve the credit until both the AU-11 and the sales tax return are sent in.

Documentation required

In general you should send copies of all of the documents needed to prove your claim (for example, invoices, receipts, exemption certificates, proof of payment of tax, etc.) You should send in photocopies and keep the originals for your own records. These should be sent in with your application for credit (Form AU-11). If there are too many copies to mail, you can make a summary table or schedule. However, we may later ask for copies of the documents to prove the summary. Some examples of the documentation that may be required include:

• copies of the receipts or invoices showing the credit issued with the amount of sales tax that was returned to the customer, or copies of canceled checks;
• copies of any exemption certificates received;
• copies of the original invoices showing the amount of the sale, the sales tax collected, the customer name and address; and,
• copies of the return with proof of the amount of tax paid.

If more information is needed, we will contact you and tell you what specific information we need.

If the person signing Form AU-11 is not the owner, partner, or an officer of the business listed as the claimant, you must also file Form POA-1, Power of Attorney. The Power of Attorney authorizes the person to act on the claimant’s behalf and to receive information about the credit application. You may also use a different Power of Attorney form that gives all the same information required on Form POA-1, if you prefer.

Where to file a claim for credit

You should claim your sales tax credit on your return and file your return as you normally would, either online or by mail. 
Form AU-11 (and if required, your Power of Attorney form) cannot be filed online. These forms, along with required documentation, should be mailed to:

 NYS TAX DEPARTMENT
 TDAB−SALES TAX REFUNDS
 W A HARRIMAN CAMPUS
 ALBANY, NY 12227

Note that the mailing address for Form AU-11 and the Power of Attorney form is different from the mailing address for your sales tax return. You must send these forms to the correct address for your credit to be processed in a timely manner.

Deadline for filing

You must claim your credit within three years from the date the sales tax return was due, or two years from the date the tax was paid to the Tax Department, whichever is later. For sales tax, the quarterly reporting periods end the last day of February, May, August, and November, and the annual reporting period ends the last day of February.

Field audit

If you apply for a credit and the Tax Department is currently conducting a sales tax field audit review of your business's books and records, the review of your application for credit may be included in the field audit.

Avoid delays

Applications for credits that are sent in without a signature or without proper documentation will be returned with a letter explaining why the claim was not accepted and what is needed to correct the application. If the claim was sent in with a Power of Attorney form, we will send copies of the letter to the person or entity named on the application for credit (the claimant) and the representative listed on the Power of Attorney.

Adjustments and denials

If, after review, the amount of credit is either reduced or denied in full, we will send you a letter of explanation followed by a formal bill. Your bill will give you instructions on how you may pay the amount due or file a formal protest.

Who to contact

If it has been more than ten weeks since you filed Form AU-11 to claim a credit and you would like to check on the status of your application, you may call us weekdays from 8:00 am to 5:00 pm at (518) 591-3100.