Society Tackles State Sales Tax Form

By Simon Eskow

The New York State Society of CPAs has formed a group to review the implications of new sales tax reporting requirements for New York state taxpayers.

The group, a subcommittee of the New York, Multistate and Local Taxation Committee, is looking at the reporting requirements on line 56 of state tax form IT-201. Practitioners have called these new sales and use tax liability requirements—enacted by legislation and new for the 2003 tax year—unduly complicated.

“There are seven pages of instructions and all kinds of obligations that a preparer now has vis-à-vis sales tax,” subcommittee Chairman Stewart Buxbaum said. “You almost have to be an expert for line 56.”

Calculation of tax and use liability has become more complex with requirements specific to each county, is contingent on the price or type of purchase, and hinges on other instructions that take seven pages to explain, all told. The Society launched the subcommittee to communicate members’ concerns to state officials and to make CPAs aware of the changes they face this tax season.

“I don’t even know if practitioners are sensitive to the issue,” Buxbaum said. “They may be in a ‘forget about it’ mode.”
The demands of line 56 include three worksheets: one for nonbusiness items costing less than $1,000 each; a second for nonbusiness items costing $1,000 or more each; and a third for Schedules C, C-EZ and E. Calculation includes multiplying the combined state and local tax rate (with charts for tax rates by municipality) by the price of the item, minus any tax paid to another jurisdiction.

Members of the group include Steve Valenti, Steve Eller, Michael Buxbaum and Mark Levin. The group, which hasn’t been formally named yet, was scheduled to meet with New York State Taxation and Finance Commissioner Andrew Eristoff this month.