NY TSB-A-24(14)S Sales Tax 2024-07-30

How does the sales tax refund statute of limitations apply to a PrompTax filer — does filing the quarterly return within three years protect monthly PrompTax payments made earlier?

Short answer: Time-barred. The Department concluded that a refund claim for overpaid sales tax cannot exceed the tax paid in the three years immediately before the claim was filed (Tax Law § 1139(c)). A PrompTax participant made monthly payments in June–August 2013, filed its quarterly Form ST-810 on September 20, 2013, and filed a refund claim exactly three years later on September 20, 2016. Because the PrompTax payments were made more than three years before the claim, a refund of those payments was barred — filing the quarterly return within three years did not revive them.

Disclaimer: This is an official New York State Department of Taxation and Finance Advisory Opinion (TSB-A), issued by the Office of Counsel at a taxpayer's request. It is limited to the facts set forth in it and binds the Department only with respect to the petitioner to whom it was issued, and only if that petitioner fully and accurately described all relevant facts; another taxpayer cannot rely on it. It reflects the law, regulations, and Department policy in effect when issued and may since have changed. Taxpayer-identifying details are redacted. New York State and local sales taxes are administered centrally by the Department. This summary is informational only and is not legal or tax advice. Consult a licensed New York tax professional about your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

A business that participates in New York's PrompTax program (accelerated electronic sales-tax payments) asked how the refund statute of limitations works for it. Specifically: if it makes monthly PrompTax payments and then files its quarterly return, does filing a refund claim within three years of the return protect the earlier monthly payments? The Department concluded the answer is no — the earlier payments can be time-barred.

Tax Law § 1139(c) gives two windows for a sales tax refund/credit claim: three years from when the return was filed, or two years from when the tax was paid, whichever is later. But there is a crucial cap: if you rely on the three-year-from-return window, the refund cannot exceed the tax paid in the three years immediately before you file the claim (plus any filing extension).

The facts: the taxpayer made PrompTax payments on June 24, July 26, and August 24, 2013, then filed its quarterly Form ST-810 for June–August 2013 on September 20, 2013. It filed its refund claim on September 20, 2016 — within three years of the return, but more than three years after each monthly payment. Because the cap limits the refund to tax paid within the three years before the claim, and these payments fell just outside that window, the refund of those PrompTax payments was barred.

The lesson: under PrompTax, tax is often paid well before the quarterly return is filed. Counting only from the return date can be a costly mistake — the three-year payment cap can still bar a refund of money paid earlier.

What this means for you

PrompTax participants and large monthly filers

PrompTax accelerates payment, so your money usually goes in before the quarterly Form ST-810 is filed. When you compute a refund deadline, don't anchor only on the return date: the refund is capped at tax paid within the three years before the claim. Payments made earlier than that three-year window can be lost even if the return was filed more recently.

Anyone filing a sales tax refund claim

File early. The safest reading of § 1139(c) is to get your claim in within three years of each payment you want refunded, not just within three years of the return. The later of the two statutory windows opens the door, but the three-year payment cap limits how much actually comes back.

Accountants and tax professionals

Map each client's payment dates against the claim date, not just the return date. Under § 1139(c), a timely-as-to-the-return claim still only reaches tax paid in the trailing three years (plus extensions). For PrompTax clients, the gap between payment and return dates is exactly where refunds get lost.

Common questions

Q: How long do I have to claim a New York sales tax refund?
A: Under Tax Law § 1139(c), the later of three years from when the return was filed or two years from when the tax was paid. But a claim filed on the three-year-from-return basis cannot refund more than the tax paid in the three years immediately before the claim.

Q: I filed my refund claim within three years of my quarterly return — am I safe?
A: Not necessarily. If you paid the tax (for example, via monthly PrompTax payments) more than three years before the claim, the three-year payment cap can still bar a refund of those payments.

Q: Why did the taxpayer here lose the refund?
A: The PrompTax payments were made in June–August 2013, but the refund claim wasn't filed until September 20, 2016 — more than three years after each payment — so the cap on tax paid within the prior three years barred them.

Q: Can my business rely on this opinion?
A: Not as binding. A TSB-A advisory opinion binds the Department only as to the petitioner and the exact facts described. Use it to understand the reasoning, then check your own facts and dates.

Citations and references

New York Tax Law:
- Tax Law § 1139(c) — statute of limitations and three-year cap for sales tax refund/credit claims

Forms and guidance referenced:
- Form ST-810 — quarterly sales and use tax return for part-quarterly (monthly) filers
- Form ST-809 — monthly return replaced by the PrompTax electronic submission
- TR-682-N — PrompTax electronic filing and payment program overview

Source

Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao.htm
Opinion: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales/24-14s.htm
Printer-friendly PDF: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a24-14s.pdf

Original ruling text

Sales Tax
July 30, 2024
Office of Counsel

The Department of Taxation and Finance received a Petition for an Advisory Opinion from [ redacted ] (“Petitioner”). Petitioner seeks clarification on the statute of limitations on refund claims of sales tax filers that participate in the PrompTax program. We conclude that Petitioner’s refund claim filed within 3 years of the date it filed Form ST-810, New York State and Local Quarterly Sales and Use Tax Return for Part-Quarterly (Monthly) Filers, for an overpayment of sales tax is barred by the statute of limitations with respect to PrompTax payments made prior to the filing of that return.

Facts

Petitioner is a participant in the PrompTax program. Under this program, sales tax must be paid no later than 3 business days after the 22nd day of each month. The payment is accompanied by a two-part electronic submission; one part reports the amount due for days 1-22 of the current month, and the other part reports the amount due for day 23 through the end of the previous month. Participants may choose to calculate their sales tax due for days 1-22 of the current month using the “actual” method by remitting at least 90% of the actual sales tax due, or the “estimated” method by remitting at least 75% of 1/3 of their liability for the comparable sales tax quarter of the preceding year. The payment amount must equal the total of the two reported amounts. This electronic submission for PrompTax filers replaces the requirement to submit Form ST-809, New York State and Local Sales and Use Tax Return for Part-Quarterly (Monthly) Filers. See TR-682-N, Program Overview – Electronic Filing and Payment Program (PrompTax). However, in addition to the monthly payments, PrompTax participants must file Form ST-810, New York State and Local Quarterly Sales and Use Tax Return for Part-Quarterly (Monthly) Filers, using their online services account, no later than 20 days after the end of the sales tax quarterly period. When filing that return, taxpayers are required to pay the balance of tax due for that quarter/period.

Petitioner made electronic PrompTax payments using the estimated method on June 24, 2013, July 26, 2013 and August 24, 2013. In addition, it timely filed Form ST-810 for the period of June 1, 2013 through August 31, 2013 on September 20, 2013. Petitioner asks whether a refund claim filed on September 20, 2016, for an overpayment of tax that occurred in June, July or August of 2013, was beyond the statute of limitations.

Analysis

Tax Law § 1139(c) states, in relevant part:

Claim for credit or refund for overpayment of sales tax shall be filed within three years from the time the return was filed or two years from the time the tax was paid, whichever of such periods expires the later.... If the claim is filed within the three year period, the amount of the credit or refund shall not exceed the portion of the tax paid within the three years immediately preceding the filing of the claim plus the period of any extension of time for filing the return.

Here, Petitioner made PrompTax payments on June 24, 2013, July 26, 2013 and August 24, 2013. In addition, it filed Form ST-810 for the period of June 1, 2013 through August 31, 2013 on September 20, 2013. Because Petitioner filed its refund claim on September 20, 2016, any refund cannot exceed the portion of the tax paid within the three-year period immediately preceding that date. Because Petitioner’s PrompTax payments made in June, July and August of 2013 were made more than three years prior to the filing of its refund claim in September 2016, we conclude a refund of those payments is barred by the statute of limitations.

DATED: July 30, 2024

Mary Ellen Ladouceur
Principal Attorney

Note: An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts set forth therein and is binding on the Department only with respect to the person or entity to whom it is issued and only if the person or entity fully and accurately describes all relevant facts. An Advisory Opinion is based on the law, regulations, and Department policies in effect as of the date the Opinion is issued or for the specific time period at issue in the Opinion. The information provided in this document does not cover every situation and is not intended to replace the law or change its meaning.