Summary of 2021 sales and other tax type changes

The sales and use tax exemption for specific sales of property or services between certain financial institutions and their subsidiaries is extended to June 30, 2024, or to June 20, 2027 if such sales are made pursuant to a binding contract entered into on or before June 30, 2024.

[Part M of Chapter 59 of the Laws of 2021; Tax Law §1115(jj)]

Exemption for breast pump parts and supplies (Article 28)

Beginning September 1, 2021, sales of breast pump replacement parts and breast pump collection and storage supplies are exempt from sales tax when purchased by an individual for home use.

Breast pump replacement parts means items used in conjunction with a breast pump to collect milk expressed from human breasts, including but not limited to the following:

breast shields and breast shield connectors,
breast pump tubes and tubing adapters,
breast pump valves and membranes,
backflow protectors and backflow protector adapters, and
bottles and bottle caps that are specific to the operation of a breast pump.

Breast pump replacement parts do not include storage bags and infant feeding bottles that are not specifically designed for, or a component part of, a breast pump.

Breast pump collection and storage supplies mean breast milk storage bags used to collect and store collected breast milk until it is ready for consumption.

[Part MM of Chapter 59 of the Laws of 2021; Tax Law §1115(a)(46)]

Extension of the vending machine exemption for candy, fruit drinks, soft drinks and bottled water (Article 28)

The exemption for certain candy, fruit drinks, soft drinks and bottled water sold from vending machines is extended to May 31, 2022.

Currently, candy, fruit drinks, soft drinks and bottled water are exempt if:

sold for $1.50 or less from vending machines that accept cash and/or coins only, or
sold for $2.00 or less from vending machines that accept forms of payment other than cash and/or coins, whether or not it also accepts cash and/or coins.

For more information, see Tax Bulletin Food Sold from Vending Machines (TB-ST-280).

[Part SS of Chapter 59 of the Laws of 2021; Tax Law §§ 1105(a), 1105(d)(i)(3), and 1115(a)(1)]

Eligibility for annual filing status expanded for certain alcoholic beverages distributors (Article 18)

For tax periods beginning on and after January 1, 2022, more distributors of alcoholic beverages may be eligible to file alcoholic beverages tax returns annually.

For more information, including how to apply for annual filing status, see Alcoholic beverages tax: Monthly or annual tax return filing status.

[Part Q of Chapter 59 of the Laws of 2021; Tax Law §429]

Racing admissions tax (Racing, Pari-Mutuel Wagering and Breeding Law Articles 2, 3, 4, and 10; Tax Law Article 28)

The tax on racing admissions is changing. Charges for admissions to racetracks and simulcast facilities for meets held on or after November 1, 2021:

are subject to the 4% New York State sales tax,
are no longer subject to the state racing admissions tax, and
are not subject to the 3/8% Metropolitan Commuter Transportation District (MCTD) tax and local sales taxes.

If your organization charges for admissions to racetracks and simulcast facilities, you must report these charges using the New York State only 4% line on your main New York State sales and use tax return. For filing periods and due dates, see Filing Requirements for Sales and Use Tax Returns. If you’re not currently registered for sales tax, you must register as a sales tax vendor at least 20 days before you begin selling taxable admissions.

[Part J of Chapter 59 of the Laws of 2021; Tax Law §§1105(f), 1109(a), 1210(a)(1), and 1210(b)(1); Racing, Pari-Mutuel Wagering and Breeding Law §§ 227, 306, 406, 1008(4)(b)(ii), and 1009(5)(b)]

Extension of tax exemptions for alternative fuels (Articles 12-A, 13-A and 28)

The current tax exemptions for the following are extended through August 31, 2026. These exemptions were due to expire September 1, 2021:

alternative fuels:
- E85
- compressed natural gas (CNG)
- hydrogen
- B20
natural gas that will be converted into CNG for use or consumption in motor vehicles

Liquefied natural gas (LNG) is considered CNG and the same exemptions apply.

For more information, see TSB-M-16(3)M, (4)S, Extension of Tax Exemptions for Alternative Fuels and Natural Gas that will be Converted into Compressed Natural Gas.

[Part EE of Chapter 59 of the Laws of 2021; Tax Law §§ 282 (22-25), 289-c (1-a)(d), 301-b(a)(6-8), 1102(a), 1111 (n), 1115(a)(42) and 1115(j)]

Sales tax rate changes

Beginning December 1, 2021, the sales tax prepayment rates on motor fuel and diesel motor fuel increased. Use the new rates when computing the amount of prepaid sales tax due. Motor fuel distributors must use the new rates to compute the additional prepaid sales tax due on any motor fuel held in inventory as of November 30, 2021. No prepaid sales tax adjustment is necessary for diesel motor fuel held in inventory as of November 30, 2021. For more information, see Important Notice N-21-6, Prepaid Sales Tax Rate Changes for Diesel Motor Fuel and Motor Fuel.

For local sales tax rate changes, see Locality rate change notices.

For the most up-to-date state and local sales and use tax rates see Find sales tax rates.

Filing and paying the taxicab and hail vehicle trip tax (Article 29-A) and congestion surcharge (Article 29-C)

Beginning with trips on or after July 1, 2021, Technology Service Providers (TSPs) are responsible for withholding and remitting payment and for filing returns for the taxicab and hail vehicle trip tax and congestion surcharge. Owners and agents of yellow and green cabs do not need to file returns if their TSP has taken over collection and filing responsibilities for these taxes.

For more information, see:

[Part R of Chapter 59 of the Laws of 2021; Tax Law §§ 1280, 1283, and 1299-B]

Change in filing frequency of highway use tax return

Effective for tax periods beginning on and after January 1, 2022, how often a carrier must file a Highway use tax (HUT) return is changing.

If the amount of the previous calendar year’s total HUT liability is:

greater than $12,000, file monthly;
greater than $1,200 but less than or equal to $12,000, file quarterly;
$1,200 or less, file annually (applies only if a carrier was subject to HUT during the entire preceding calendar year).

If a carrier was not subject to HUT in the preceding calendar year, it must file quarterly.

Returns continue to be due by the last day of the month following the end of the reporting period.

For more information, see Highway Use Tax.

[Part Q of Chapter 59 of the Laws of 2021; Tax Law § 505]

Excise tax on medical cannabis (Article 20-B)

The Tax Law was amended to rename the excise tax on medical marijuana to excise tax on medical cannabis. In addition, the term medical marijuana was changed to medical cannabis throughout the Law.

Similarly, the medical marijuana program was renamed the medical cannabis program.

For more information, see Excise tax on medical cannabis.

[Chapter 92 of the Laws of 2021; Tax Law §§ 490, 491]

Tax on adult-use cannabis products (Article 20-C)

Beginning April 1, 2022, an excise tax is imposed on the sale or transfer of adult-use cannabis products by a distributor to a retail dispensary at the following rates:

cannabis flower - $.005 per mg of total THC
concentrated cannabis -$.008 per mg of total THC
cannabis edible product - $.030 per mg of total THC.

In addition, there is a retail tax of 13% (9% state excise tax + 4% local excise tax) on the sale or transfer of adult-use cannabis products to an adult-use customer. This tax is imposed on the retailer at the time of sale or transfer.

All distributors and retailers of adult-use cannabis products in New York State must electronically apply for a certificate of registration (CoR) with the Tax Department before engaging in business. There is a $600 application fee.

To stay up to date, see Office of Cannabis Management and subscribe to Adult-Use Cannabis to receive updates by email when new information is available on the Tax Department’s website.

[Chapter 92 of the Laws of 2021; Tax Law §§ 471, 492, 493, 494, 495, 496, 496-a, 496-b, 496-c, 1115, 1181]

Cigarette tax enforcement and licensing (Articles 20 and 28)

The cigarette tax enforcement provisions are enhanced as follows:

A retail dealer may not possess cigarettes or tobacco products in any place of business, cart, stand, truck, or other merchandising device in New York State without a valid retail dealer certificate of registration (C of R).
Any retail dealer, whose C of R has been cancelled, suspended or revoked or who is otherwise forbidden to continue selling cigarettes or tobacco products under the Cigarette and Tobacco Tax Law:
- cannot possess any cigarettes or tobacco products beginning on the tenth day after, and continuing for, the period of such cancellation, suspension, revocation, or forbiddance, however
- prior to the tenth day from the date of their cancellation, suspension, revocation, or forbiddance, the retail dealer may sell or transfer their existing inventory of lawfully stamped cigarettes or tobacco products where the tax has been assumed or paid, to another registered retail dealer, provided such retail dealer has a valid CoR.
  Retail dealers whose registration was cancelled, suspended or revoked prior to April 19, 2021, and the cancellation, suspension or revocation was still in effect as of April 19, 2021, were allowed until April 29, 2021, to sell or transfer existing inventory.
The possession of cigarettes or tobacco products by an unlicensed retail dealer or by a retail dealer whose license has been cancelled, suspended or revoked or who was forbidden from continuing to sell cigarettes or tobacco products is subject to the penalties under §480-a (3) of the Tax Law.
The Commissioner may refuse to issue a Certificate of Authority (COA) to any person, and is authorized to revoke or suspend a COA for a period of five years for any person, who:
- has not obtained a valid retail dealer’s C of R, and
- possesses or sells unstamped or unlawfully stamped packages of cigarettes three or more times within five years.

[Part P of Chapter 59 of the Laws of 2021; Tax Law §480-a, §1134, effective April 19, 2021]

Definition of person expanded under the real estate transfer tax (Article 31)

The term person is expanded to include:

an individual,
a corporation,
a partnership or limited liability company (LLC), and
an officer or employee of any corporation, (including a dissolved corporation), or a member or employee of any partnership, or a member, manager or employee of a limited liability company, who as such officer, employee, manager or member is under a duty to act for such corporation, partnership, limited liability company or individual proprietorship in complying with any requirement of the transfer tax.

[Part O of Chapter 59 of the Laws of 2021; Tax Law § 1401(a), effective July 1, 2021]

Responsibility for the payment of the real estate transfer tax (Article 31)

Unless pursuant to a binding contract between the grantor (buyer) and grantee (seller) entered into on or before April 1, 2021, the buyer may not directly or indirectly pay the base tax and additional base tax. However, if the buyer pays those taxes because the seller failed to pay them, the buyer has a cause of action against the seller to recover payment of those taxes.

[Part O of Chapter 59 of the Laws of 2021; Tax Law § 1404(a), effective July 1, 2021]

Calculation of transfer tax no longer grossed-up under certain circumstances (Article 31)

For a conveyance of residential real property, if the buyer pays the transfer tax pursuant to a contract between the buyer and seller, the amount of tax is excluded from the calculation of consideration (the price actually paid, or required to be paid, for the real property or interest therein) subject to tax.

[Part O of Chapter 59 of the Laws of 2021; Tax Law § 1404(a), effective July 1, 2021]

Limited liability company (LLC) reporting changes (Article 31)

Deed transfer of a building used as residential real property containing up to four family dwellings

When filing Form TP‑584, Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax, or Form TP-584-NYC, Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax for the Conveyance of Real Property Located in New York City, the following members of an LLC no longer need to provide the names and addresses of their shareholders, directors, officers, members, managers and partners:

publicly traded companies,
real estate investment trusts (REITs),
umbrella partnership real estate investment trusts (UPREITs), or
mutual funds.

[Part O of Chapter 59 of the Laws of 2021; Tax Law §§ 1409(a) and 1418(h), effective April 19, 2021]

Modernization of real property transfer reporting (Tax Law Articles 22 and 31; Real Property Law Article 9)

The Commissioner is authorized to develop and implement a system to electronically file information related to real property transfers, including information reported on:

Form TP‑584, Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax,
Form RP-5217, Real Property Transfer Report,
Form IT-2663, Nonresident Real Property Estimated Income Tax Payment Form, and
Form IT-2664, Nonresident Cooperative Unit Estimated Income Tax Payment Form.

To stay up to date, subscribe to Real Estate Transfer Tax and Mortgage Recording Tax to receive updates by email when new information is available on the Tax Department’s website.

[Part U of Chapter 59 of the Laws of 2021; Tax Law §§ 663, 1407, 1409, and 1423; Real Property Law § 333, effective April 19, 2021]

Tax preparer regulation and enforcement (Article 1)

As of April 19, 2021, the department is authorized to send a notice electronically to the online services account of a tax return preparer or facilitator that fails to register or re-register with the department or a commercial tax return preparer that fails to pay the required fee.

The tax return preparer, facilitator, or commercial tax return preparer will have 15 days to cure the failure or will be assessed the following penalties:

$250 for tax return preparers or facilitators for failure to register or re-register, and
$50 for each return filed with the Department in that calendar year (not to exceed $5,000) for commercial tax return preparers that fail to pay the required fee.

The penalties can only be waived for good cause shown by the tax return preparer, facilitator, or commercial tax return preparer.

For tax years beginning on or after January 1, 2022, tax return preparers and facilitators are required to prominently display the following information at their place of business and at any location where they provide tax return preparation and/or facilitation services:

a copy of their registration certificate for the current registration period;
a current price list, in at least 14 point type, that includes, but is not limited to:

a list of all services offered,
the minimum fee charged for each service, including the fee charged for each type of federal or New York State tax return to be prepared and facilitation service to be provided, and
a list of each factor that may increase a stated fee and the specific additional fees or range of possible additional fess when each factor applies; and

a copy of the most recent Consumer Bill of Rights Regarding Tax Preparers published by the Department.

A tax return preparer or facilitator who fails to comply with these requirements must pay a penalty of $500 for the first month of noncompliance and $500 for each subsequent month of noncompliance, not to exceed $10,000 per calendar year. The penalty can only be waived for good cause shown by the tax return preparer or facilitator.

[Part S of Chapter 59 of the Laws of 2021; Tax Law §§ 32(g)(1), 32(g)(2), and 32(h)]

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Updated: December 15, 2023