Can an out-of-state seller with no New York presence cancel a sales tax registration it took on voluntarily?

Plain-English summary

V. H. Blackington & Co., Inc., a Massachusetts manufacturer and wholesale distributor of uniform insignia, had registered voluntarily as a New York sales tax vendor because of a relationship with two New York customers for whom it collected and remitted tax. That relationship ended February 28, 1985, and Blackington wanted to cancel its registration. It said it does not meet the definition of a "vendor": it makes no New York deliveries except by common carrier or mail, keeps no place of business in New York (20 NYCRR 526.10(c)), and does not solicit business in New York (20 NYCRR 526.10(d)).

The Department agreed — Blackington is not required to remain registered.

• When an out-of-state seller must collect. Under 20 NYCRR 526.10(e), a seller outside New York must collect tax on property delivered here only if it solicits sales in New York or maintains a place of business here.
• Mail-order sellers with no presence need not register. A seller that solicits only by mailing catalogs or advertising and delivers by mail or common carrier, and that neither maintains a place of business nor solicits business as defined, is not required to register. If it registers voluntarily, it is under the same obligations as any other vendor while registered.
• What "place of business" and "soliciting" mean. A place of business includes a store, salesroom, showroom, distribution center, warehouse, service center, factory, or credit/collection, administrative or research office in New York (526.10(c)). Soliciting includes having employees, salesmen, contractors or agents soliciting here; distributing catalogs or advertising in the State; or placing New York newspaper/radio/TV ads that request orders be sent to a New York address or deliver orders in the seller's own vehicles (526.10(d)).
• Result. Because Blackington registered voluntarily and does not otherwise qualify as a person required to collect tax, it is not compelled to remain registered (or to re-register) as long as none of those conditions is met (Spiegel, Inc., TSB-A-81(26)S).

What this means for you

Voluntary registration doesn't trap you forever. If you took on a New York registration to serve a customer and that reason is gone, you can cancel it — provided you don't otherwise have a New York place of business or solicit business here.

While registered, you carry full vendor duties. A voluntary registrant must collect and remit like any vendor for as long as the registration is active. The freedom to cancel doesn't excuse obligations during the registered period.

Know what creates a collection duty — under the law of the time. In 1985, New York's regulation keyed the duty to physical presence: a place of business or in-state solicitation. Note the important caveat below: the constitutional rules for taxing remote sellers have changed dramatically since then.

Important: This 1985 opinion predates the modern law of remote-seller sales tax. The U.S. Supreme Court's later decisions — ending the physical-presence rule — mean an out-of-state seller today may be required to collect New York tax based on its volume of New York sales, even with no physical presence. Do not treat this opinion as current guidance on nexus; consult a professional about today's economic-nexus thresholds.

Common questions

Q: I registered voluntarily for one customer who's now gone. Must I keep the registration?
A: No, if you don't otherwise qualify as a required vendor — no New York place of business and no in-state solicitation. Under this 1985 opinion you may cancel it.

Q: Does delivering only by mail or common carrier create a duty to collect?
A: Under the 1985 regulation, delivery by mail or common carrier alone did not, absent a New York place of business or solicitation. But see the caveat: modern law can require collection based on sales volume alone.

Q: While I'm voluntarily registered, do I still have to collect tax?
A: Yes. A voluntary registrant has the same obligations as any other vendor for as long as it is registered.

Citations and references

Regulation:

• 20 NYCRR 526.10(e) — interstate vendors: an out-of-state seller must collect only if it maintains a place of business or solicits business in New York; a mail-order seller doing neither need not register, but a voluntary registrant carries full vendor duties
• 20 NYCRR 526.10(c) — "maintaining a place of business" (store, warehouse, office, factory, etc.)
• 20 NYCRR 526.10(d) — "soliciting business" (agents, catalogs/advertising, New York media ads)

Prior opinion cited:

• Spiegel, Inc., TSB-A-81(26)S — a voluntary registrant not otherwise required to collect may cancel its registration

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1985.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a85_56s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-85(56)S
Sales Tax
November 7, 1985

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S850221A

On February 21, 1985 a Petition for Advisory Opinion was received from V. H. Blackington
& Co., Inc., P.O. Box 1300, Attleboro Falls, Ma. 02763.
The issue raised is whether Petitioner is required to remain registered as a sales tax vendor
and collect and remit sales and compensating use tax.
Petitioner is a manufacturer and wholesale distributor of uniform insignia. Petitioner states
that it is currently registered as a vendor in New York because of a voluntary relationship with two
customers in New York whereby Petitioner collects and remits the appropriate sales tax. Petitioner
states further that this relationship with its customers terminated as of February 28, 1985 and
Petitioner therefore proposes to cancel its sales tax registration with New York State.
Petitioner maintains that it does not meet the criteria of the term "vendor" for sales and use
tax registration purposes because: it does not make any deliveries into New York State other than
by common carrier or by mail; it does not maintain a place of business in New York State as defined
under 20 NYCRR 526.10(c); and it does not solicit business in New York State as defined in 20
NYCRR 526.10(d).
The Sales and Use Tax Regulations, in clarifying the status of interstate vendors, provide as
follows:
"(e) Interstate vendors. (1) A person outside of this State making sales to persons within
the State, who solicits the sales in New York, as defined in subdivision (d) of this section, or who
maintains a place of business as defined in subdivision (c) of this section, is required to collect the
sales tax on the tangible personal property delivered in New York or the services performed in New
York.
(2) A person making sales to his customers within the State, who has solicited such sales
by the interstate distribution of catalogs or other advertising material by mail and who delivers the
merchandise through the mail or by common carrier, and who neither maintains a place of business
as defined in subdivision (c) of this section, nor solicits business as defined in subdivision (d) of this
section, is not required to register as a vendor. However, if such person registers voluntarily, he is
under the same obligations as any other vendor." (Examples deleted) 20 NYCRR 526.10.

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-85(56)S
Sales Tax
November 7, 1985

Subdivisions "(c)" and "(d)" of the Regulations referred to above state as follows:
"(c) Maintaining a place of business. A vendor shall be considered to maintain a place of
business in the State if he, either directly or through a subsidiary, has a store, salesroom, sample
room, showroom, distribution center, warehouse, service center, factory, credit and collection office,
administrative office or research facility in the State." 20 NYCRR 526.10
"(d) Soliciting business. (1) A person is deemed to be soliciting business if he has
employees, salesmen, independent contractors, promotion men, missionary men, service
representatives or agents soliciting potential customers in the State".
(2) A person is deemed to be soliciting business in New York if he distributes catalogs or
other advertising material, in any manner in the State.
(3) A person is deemed to be soliciting business if he places advertisements in New York
newspapers or over New York radio or television stations, and either requests that orders, payments
or inquiries be sent to a New York address or delivers orders to New York in vehicles that he
controls." (Examples deleted) 20 NYCRR 526.10
Inasmuch as Petitioner registered voluntarily with the Tax Commission as a vendor and does
not otherwise qualify as a person required to collect tax, Petitioner is not compelled to remain
registered as a New York State sales tax vendor or to re-register as a vendor as long as none of the
above conditions are met. Spiegel, Inc., State Tax Commission Advisory Opinion, August 31, 1981,
TSB-A-81(26)S.

DATED: August 28, 1985

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth herein.