NYS Certificate of Authority [ 6 Must Know ] FAQs & Tips

By Charles Rosselli, Tax Attorney


Below are 6  things that you must know about a NYS Certificate of Authority, also know as a New York sales tax license and your sales tax obligation  to avoid tax headaches with the NY Tax Department.

If you require assistance with your New York Certificate of Authority of other sales tax related issue, please reach out to us. We can assist you regardless of location.

You Must Be Registered

If you have a business that is required to collect and remit sales tax in New York State, the NY Department of Taxation will require you to have a valid NYS Certificate of Authority [aka New York sales tax license].

Before you begin selling tangible items or services that are subject to sales tax in  New York State, the State of New York requires that you must be registered with the NYS Tax Department of Taxation and Finance  to collect sales tax.


The New York State Department of Taxation and Finance is the governmental agency that governs the collection and remittance of sales tax

If you have a business that is required to collect and remit sales tax in New York State, the NY Department of Taxation will require you to have a valid NYS Certificate of Authority [aka New York sales tax license].

Before you begin selling tangible items or services that are subject to sales tax in  New York State, the State of New York requires that you must be registered with the NYS Tax Department of Taxation and Finance  to collect sales tax.

The New York State Department of Taxation and Finance is the governmental agency that governs the collection and remittance of sales tax.

You cannot legally make taxable sales in the State of NY, collect sales tax, or issue exemption certificates until you receive your Certificate of Authority.

You must apply for a NYS Certificate of Authority at least 20 days prior to begin operating your business.

An exemption certificate is a form that a buyer will give to the seller so that there is a record as to why you did not collect the sales tax on a particular transaction.

To request a Certificate of Authority, you can apply online at the NYS Tax Department website

If accepted, NYS will mail you a Certificate of Authority. 

The Certificate of Authority must be displayed at your business.

If you have more than one location, each location requires its own Certificate of Authority. 


You MUST File Sales Tax Returns

Let’s say you start a business and obtain  a Certificate of Authority from NYS.  However, the business does not make any sales in the first few months.

Are you still required to file sales tax returns? 

Yes. You are still required to file NYS sales tax returns once you obtain a Certificate of Authority even if you do not collect sales tax. 

Failure to do so may result in failure to file penalties.

Surrender Your NYS Certificate of Authority

If your business stops operating, you are required to surrender your Certificate of Authority within 20 days of ending the business and file a final sales tax return. 

Failure to properly close your business with NYS will likely result in the business being assessed  failure to file penalties as NYS will assume that you are still operating the business.

You Cannot Transfer a New York Sales Tax License

If you decide to sell or transfer your business, the new business owner cannot use the Certificate of Authority that you initially acquired. 

The new business owner must apply for his or her own Certificate of Authority.

When a business that is obligated to collect sales tax is either sold or transferred, it is important that you notify the NYS Tax Department at least 10 days prior to the sale and comply with the bulk sale transaction laws. 

Otherwise, you, the new owner, may be held liable for any sales tax that was due to the New York Tax Department prior to you taking ownership of the business.

Also, if you change the organizational structure of your business, you must destroy the old Certificate of Authority and the new business must obtain a new Certificate of Authority. 

For example, let’s say you own a restaurant as a sole proprietorship. 

However, you decide to incorporate the restaurant but still remain the sole shareholder of the corporation. 

In that circumstance, you will be required to obtain a new Certificate of Authority as you changed the organizational structure of your business.

Denial of a Certificate of Authority

One of the most common reasons for the denial of a Certificate of Authority is that you may have outstanding New York State back tax obligations. 

In order to obtain a New York sales tax license, you’ll likely have to resolve your tax obligations as a prerequisite to approval.

Failure to Properly Collect & Remit Sales Tax

Failure to maintain a valid NYS Certificate of Authority will result in legal and financial penalties.  

For example, the monetary penalty for conducting business without having obtained a valid NYS Certificate of Authority is $500 for the first day plus $200 per day for each thereafter, up to a maximum penalty of $10,000.

Sales tax is a “trust fund’ tax and NYS takes the responsibility of collecting remitting sales very seriously. 

NYS is “trusting you” to collect the sales tax ; file the necessary paperwork (sales tax returns ) on a timely basis; and remit the sales tax to the New York State Department of Taxation and Finance.

When you collect sales tax for NYS, the tax belongs to the State of New York.

 It does not belong either to you or your business.

Failure to comply with the NYS tax laws may result in civil penalties as in certain circumstances, criminal ramifications.

Help with NYS Sales Tax Problems

If you are having problems with the NYS Tax Department pertinent to a sales tax matter, experienced tax attorney Charles Rosselli of the Tax Problem Law Center may be able to assist you.

Every Day You Wait To Resolve Your Tax Problems...

  • Your interest and penalties will increase every single day.
  • Your chances of having your wages garnished go up.
  • Your chances of having your bank account levied goes up.
  • You run the risk of the IRS or NYS seizing  your cars, house, or other property.
  • Your run the risk of an IRS Revenue Officer showing up at your home.
  • Your run the risk of a New York Tax Agent showing up at your home

Permanently Resolve Your IRS or NY Tax Problem Today