State Nexus Guide
New York Sales Tax Nexus 2026: AND Test, $500K Rule
New York's economic nexus threshold requires BOTH $500,000 in sales AND 100 transactions under N.Y. Tax Law §1101. Conjunctive test explained — NY Tax Dept registration, audit risk.
New York Sales Tax Nexus — The 2026 Threshold
New York's economic nexus threshold under N.Y. Tax Law §1101(b)(8)(iv) applies to remote sellers who made more than $500,000 in gross receipts from sales of tangible personal property delivered into New York AND made more than 100 separate transactions into New York during the prior four quarterly sales tax periods (approximately the prior year). New York's economic nexus rule became effective June 1, 2019. New York's most distinctive feature is its conjunctive AND test. Both conditions must be met simultaneously: the seller must have more than $500,000 in New York gross receipts AND more than 100 separate transactions into New York. Meeting only one condition is not enough for economic nexus. A seller with $1,000,000 in New York revenue from a single bulk transaction does not have New York economic nexus under this test. A seller with 200 transactions totaling $50,000 likewise does not have New York economic nexus. This AND requirement makes New York meaningfully different from most states. It was originally designed to ensure that only sellers with a genuine, sustained economic presence in New York — both significant revenue and meaningful transaction frequency — are subject to collection obligations. In practice, the 100-transaction threshold is low enough that most sellers with $500,000 in New York revenue will also have more than 100 transactions — but not always, particularly for high-value B2B sellers making large, infrequent transactions. New York's $500,000 threshold (like California and Texas) is five times the standard $100,000 that most states use. Combined with the 100-transaction floor, New York's economic nexus test is designed for high-volume consumer sellers. SaaS providers with a handful of large enterprise New York clients may be below the 100-transaction threshold even with significant gross receipts. This is one New York structural fact that works in the seller's favor — but it requires careful monitoring, because the transaction count and the revenue figure must be tracked independently. One seller in an Amazon Seller Central forum captured the frustration of multi-state compliance broadly: 'collecting for all 50 states is just absurd' — and New York's two-condition test adds a layer of complexity that doesn't exist in most states.
What Triggers Nexus in New York Beyond Sales Volume
New York has one of the longest histories of expansive nexus interpretation among all U.S. states. Before Wayfair, New York was a pioneer in 'click-through' and 'affiliate' nexus rules that imposed collection obligations on sellers with in-state referral partners. Those rules remain on the books alongside the 2019 economic nexus statute. FBA inventory and warehouses: Amazon fulfillment centers in Staten Island, Albany, Schodack, and other New York locations create physical nexus for FBA sellers storing inventory there. Physical nexus in New York has no minimum threshold — a single unit of inventory in a New York Amazon warehouse creates New York nexus regardless of revenue or transaction count. Amazon collects and remits New York sales tax on marketplace sales under New York's marketplace facilitator statute (N.Y. Tax Law §1101(b)(34)), but this does not eliminate the seller's physical nexus registration obligation for direct sales. Click-through nexus: New York Tax Law §1101(b)(8)(i) continues to impose nexus on remote sellers who contract with New York-based website operators or affiliates to refer customers in exchange for commissions, if New York-referred purchases from the seller exceed $10,000 per year. This click-through nexus rule predates Wayfair and remains in force. Post-Wayfair, most sellers who would have click-through nexus also have economic nexus — but sellers below the $500,000/100-transaction economic nexus test who have significant affiliate traffic from New York websites may still owe based on click-through nexus. Sales tax on services: New York taxes a broad range of services, including information services, maintenance and repair services, interior design, and certain software services. New York's tax on information services under N.Y. Tax Law §1105(c)(1) is broad enough to capture certain SaaS products, subscription databases, and data services. Sellers of digital content should consult New York Tax Law §1101(b)(6) for the definition of 'information service' to determine taxability. Nominal in-state presence: New York has historically treated even minimal in-state activities — attending a single trade show, having a company officer visit a New York client — as sufficient to create nexus. Post-Wayfair, the economic nexus test is the dominant framework, but New York's pre-Wayfair physical nexus rules remain relevant for sellers with any recurring New York activity.
How to Register in New York
New York sales tax registration is administered by the New York State Department of Taxation and Finance. Registration is done online through the New York Business Express portal at businessexpress.ny.gov. Navigate to 'Register for Taxes' and select 'Sales Tax' from the list of tax types. What you need: your EIN (or SSN for sole proprietors and single-member LLCs), legal business name and DBA if applicable, primary business address, New York address if any, NAICS code, date of first New York taxable sale, expected New York sales volume, and banking information for electronic payments. New York requires sellers to indicate whether they are registering as a result of economic nexus, which triggers the out-of-state seller registration path. New York registration is free — no application fee. There is no general security deposit requirement, though New York may require a bond or deposit for certain business types with prior compliance issues. Processing time for online applications is typically 3 to 5 business days; New York issues a Certificate of Authority (not a 'seller's permit') as the registration credential. Filing frequency in New York: annual if annual New York sales tax liability is under $300; quarterly if under $300 per quarter; monthly if over $300 per month. High-volume sellers are required to file monthly and prepay estimated tax for the first two months of each quarter, with a final quarterly settlement return. This prepayment-plus-quarterly structure is more complex than most other states' monthly filing systems and is a common source of confusion for out-of-state sellers new to New York. New York sales tax returns are filed electronically through the Tax Department's Online Services portal at tax.ny.gov. Late filing triggers an automatic penalty regardless of whether any tax is due.
What New York Audits Look Like
The New York State Department of Taxation and Finance runs a sophisticated audit selection system that uses multiple data sources including IRS 1099-K information, marketplace facilitator sales reports, real estate tax records, and business intelligence databases. New York is aggressive about pursuing non-registered sellers, particularly those selling high-value goods or services. Audit triggers specific to New York: large-volume Shopify stores shipping to New York addresses without a New York Certificate of Authority; businesses registered in the other high-threshold states (California, Texas) but not New York despite similar revenue levels; Amazon FBA sellers with known New York warehouse inventory and no New York registration; and click-through nexus from substantial New York affiliate arrangements. New York's statute of limitations is three years from the due date of the return for registered sellers who filed. For non-filers, New York takes the position that the limitations period does not begin to run — meaning New York can theoretically assess back to the date nexus was established (June 1, 2019 for economic nexus, or earlier for click-through or physical nexus). In practice, New York auditors typically look back three to five years for non-filers as a matter of resource allocation, but the legal authority extends further. Penalty structure: New York imposes a 10% failure-to-file penalty, a 10% failure-to-pay penalty, and a 10% failure-to-collect penalty — separately assessed, meaning a seller who failed to register, file, and collect faces up to 30% in penalties on the underlying tax, before interest. Interest accrues at New York's annual rate, which floats based on federal rates plus 7 percentage points — currently running approximately 12 to 14% annually. New York also has a 'fraud and intentional evasion' penalty of 50% in cases of deliberate non-compliance. New York's Voluntary Disclosure and Compliance Program (VDCP) at tax.ny.gov limits look-back to three years and waives most penalties for qualifying applicants who come forward before being contacted. The VDCP application is formal and requires full disclosure of all New York tax types for which the applicant may have liability.
Common New York-Specific Mistakes
New York's AND test, broad information-services tax, and unique filing structure produce failures that are specific to this state. Misreading the AND test as an OR test: This is the most costly New York-specific mistake. Most states use an 'or' test — either revenue or transactions alone triggers nexus. New York uses an 'and' test — both must be exceeded. Sellers who flag New York nexus when revenue alone crosses $500,000 may be wrong (no transactions problem). Sellers who dismiss New York nexus because transaction count is below 100 while revenue is $700,000 may be correct in rejecting economic nexus — but they must check physical nexus separately. The AND test is the first thing to confirm when analyzing New York exposure. Confusing 100 transactions (NY) with 200 transactions (most states): New York's transaction threshold is 100, not 200. This is a lower bar. Sellers who have template-based monitoring systems that apply the 200-transaction standard across all states will over-count what is needed to trigger New York economic nexus — but, combined with the AND test and the $500,000 revenue floor, the 100-transaction bar is rarely the binding constraint. Missing information-services taxability: New York's information services tax covers subscription databases, data aggregation services, certain content subscription services, and some SaaS products that deliver 'information' to users. Sellers who register for New York sales tax assuming their product is exempt may discover mid-audit that the Tax Department considers their product taxable as an information service under N.Y. Tax Law §1105(c)(1). This requires a product-specific taxability analysis, not a generic software-is-exempt assumption. Missing the prepayment-quarterly filing structure: New York's monthly filers must prepay estimated tax for the first two months of each quarter and then file a quarterly settlement return (Form ST-809 for out-of-state vendors). First-time New York filers often assume the process is identical to other states' monthly returns. Missing a prepayment deadline triggers penalties even when the annual tax amount is correctly reported. Click-through nexus for below-threshold sellers: sellers with significant New York affiliate revenue who are below the $500,000/100-transaction economic nexus threshold may still have New York nexus through the click-through nexus rule. Sellers operating affiliate programs should check whether their New York affiliate referral volume triggers N.Y. Tax Law §1101(b)(8)(i) even when economic nexus does not apply.
Key Facts and Figures
These figures are drawn directly from New York statutes and tax authority guidance.
New York's economic nexus threshold requires BOTH more than $500,000 in gross receipts from sales into New York AND more than 100 separate transactions into New York during the prior four quarterly periods — New York is one of the only states using a conjunctive AND test, not an OR test (N.Y. Tax Law §1101(b)(8)(iv), effective June 1, 2019).
A seller making $1,000,000 in New York revenue from a single transaction does not have New York economic nexus under N.Y. Tax Law §1101(b)(8)(iv) — the AND test requires more than 100 separate transactions in addition to the $500,000 revenue threshold.
New York sales tax penalties for non-registered sellers include separate 10% penalties for failure to file, failure to pay, and failure to collect — potentially 30% in combined penalties on the underlying tax before interest, which runs at approximately 12 to 14% annually under current New York rates.
New York enacted click-through nexus under N.Y. Tax Law §1101(b)(8)(i) years before the Wayfair decision — sellers with New York-based affiliates generating more than $10,000 in New York referral sales may have click-through nexus even if they are below the $500,000/100-transaction economic nexus threshold.
Frequently Asked Questions
Does New York use an OR test or an AND test for economic nexus?
New York uses an AND test — both conditions must be satisfied simultaneously. Under N.Y. Tax Law §1101(b)(8)(iv), a remote seller has New York economic nexus only if it has (1) more than $500,000 in gross receipts from New York sales AND (2) more than 100 separate New York transactions, both during the prior four quarterly periods. If you have $600,000 in New York revenue but only 80 transactions, you do not have New York economic nexus under this test. If you have 150 transactions but only $200,000 in revenue, you also do not have New York economic nexus. Both conditions must be exceeded. This AND structure is one of the things that makes New York's test distinct from virtually every other state, which use an OR structure where exceeding either threshold alone creates nexus.
Do New York sales through Amazon count toward the $500,000 and 100 transactions?
Yes. New York counts marketplace-facilitated sales toward both the $500,000 revenue threshold and the 100-transaction count for determining whether a seller has economic nexus for their non-marketplace sales. Amazon collects and remits New York tax on Amazon.com sales under New York's marketplace facilitator law, but those sales still count in the threshold calculation. A seller with $400,000 in Shopify sales and $120,000 in Amazon sales, plus 90 Shopify transactions and 15 Amazon transactions into New York, has crossed both the $500,000 revenue threshold and the 100-transaction threshold — and must register for Shopify sales. The marketplace collection covers the Amazon side; the seller must cover the Shopify side.
I sell a SaaS product — is my subscription revenue taxable in New York?
Possibly. New York taxes 'information services' under N.Y. Tax Law §1105(c)(1), which is defined broadly enough to cover subscription databases, data aggregation platforms, and certain SaaS products that deliver information, reports, or analyzed data to users. Pure software-as-a-service that gives users access to software functionality (not information) occupies grayer territory in New York — the Tax Department's guidance distinguishes between 'information services' (taxable) and 'data processing services' (taxable in some forms) versus pure software licenses (taxable under different provisions). A product-specific analysis is required. The safest approach: submit a request for advisory opinion from the New York Tax Department at tax.ny.gov, which provides binding guidance on your specific product's taxability before you file.
How do I register for New York sales tax as an out-of-state seller?
Register through the New York State Department of Taxation and Finance at businessexpress.ny.gov. Navigate to 'Register for Taxes' and select 'Sales Tax.' For out-of-state sellers registering due to economic nexus, use the out-of-state seller registration path and indicate the date your nexus was established. You will need your EIN, business name, primary address, NAICS code, and expected New York sales volume. Registration is free. New York issues a Certificate of Authority (not a 'sales tax permit') within approximately 3 to 5 business days. Note that New York's filing structure for high-volume sellers involves monthly prepayments plus a quarterly settlement return — this is more complex than the simple monthly returns most other states use.
Can I apply for New York's Voluntary Disclosure Program before getting audited?
Yes. New York's Voluntary Disclosure and Compliance Program (VDCP) is available to sellers who have unpaid New York tax obligations and who apply before the Tax Department contacts them. Under the VDCP, New York typically limits the look-back period to three years and waives failure-to-file, failure-to-pay, and failure-to-collect penalties. You still owe the underlying tax and interest. The VDCP application requires disclosure of all New York tax types for which you may have liability — not just sales tax. Apply at tax.ny.gov under 'Voluntary Disclosure.' Critical rule: the VDCP window closes the moment the Tax Department contacts you, whether by audit notice, compliance letter, or phone. If you have received any communication from the New York Tax Department about your sales tax obligations, consult a New York tax attorney before responding.
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