The New York Law Blog: New York Franchisors: Start Thinking About Filing Your NYS Tax Documents
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Friday, November 18, 2016

New York Franchisors: Start Thinking About Filing Your NYS Tax Documents

NY Franchise Law, NY Tax Law
With the new year fast approaching, franchisors in New York should beginning focusing on updating their franchise disclosure documents, renewing their franchise registrations. However, NY franchisors should not forget that it is required to file certain tax documents.

The reporting requirement applies where the franchisor-franchisee relationship falls within the broad franchise definition under the New York franchise statute. The statute was created so that New York tax authorities can verify state tax filings submitted by New York franchisees so that the franchisor's filing matches what the franchisee disclosed.

Franchisors in New York that have at least one franchisee doing business in New York are required to register as a sales tax vendor and must file information returns with the New York State Department of Taxation and Finance. The reporting period is from March 1 to February 28 of the subsequent year. The returns are due on March 20. You must file even if the franchisee made no sales in New York during the filing period.

New York franchisors must report specific information, including the identity of, and payments made to, each of your franchisees doing business in New York and certain sales and payment related information. For example, New York franchisors must include the name of each franchisee and the gross sales in New York State for each franchise location as reported to you.

The New York State Department of Taxation provides online filing capability to New York franchisors through its website. Franchisors need only create an online filing account to access the system and follow the instructions provided on the website.

Penalties of up to $10,000 may be imposed for failure to comply with the reporting and information requirements.

If you are unsure of the requirements inposed by the NYS Department of Taxation and Finance onto franchisors in New York, we strongly suggest contacting our attorneys who can help you navigate the process.
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*Sean Hayes may be contacted at: SeanHayes@ipglegal.com. Sean Hayes is co-chair of the Korea Practice Team and Chair of International Practice Group at IPG Legal.  He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.  Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.  He has, also, received the highest rating by AVVO and other legal rating services.

*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.