New York State Tax Law Update and Changes

Recently, franchisEssentials Guest Author, Kathryn Rookes, submitted an article New York State Tax Law, which was posted on this site on July 23, 2009. The article was about a tax law passed by New York State that establishes specific reporting requirements for franchisors in the State of New York. Subsequently, Kathryn submitted a follow up article regarding updates to the state law. The update was posted on this site on August 6, 2009.

In her continuing efforts to keep the franchise community updated with additional changes to the New York State Law, Kathryn has detailed the recent changes accordingly.

New York Tax Law Changes
as submitted by Kathryn Rookes, Attorney, FSB Legal

The New York State Department of Taxation and Finance has made some changes to its new reporting requirements for franchisors.

First, the NYSDTF has implemented an extension procedure for franchisors that are unable to meet the deadline. The extension must be filed before the due date (first due date is September 20, 2009) and once filed, is automatic. The extension is for 90 days.

Next, the NYSDTF has waived some of the information that it previously required, including audited gross sales of a franchise if the franchisor has audited and found gross sales to be different from what the franchisee reported and the amount of sales that a designated supplier has made to a franchisee.

The NYSDTF also has made changes to reporting requirements if the royalties are not paid as a percentage of gross sales.

Finally, the NYSDTF will waive penalties in some situations, when the information filed is incorrect because the franchisee supplied incorrect information to the franchisor without the franchisor’s knowledge.

Kathryn is an experienced franchise attorney and a member of FSB Legal, a virtual law firm. She is one of the very few franchise attorneys in the United States with experience in a government regulatory practice (Maryland Division of Securities), private practice, and as in-house counsel. With this diversity of experience, Kathryn understands the issues that franchisors face on a daily basis.