SN 95(1)

1994 New York State Legislation Affecting the Connecticut/New York Reciprocal Tax Program

PURPOSE: This Special Notice describes 1994 New York State legislation as it affects Connecticut based vendors participating in the Connecticut/New York Reciprocal Tax Program.

EFFECTIVE DATE: Effective for monthly or quarterly periods commencing October 1, 1994.

STATUTORY AUTHORITY: Conn. Gen. Stat. §12-34c and 1994 New York Laws 170, §298

VENDOR CREDIT: A recent change in New York State tax law, effective September 1, 1994, provides New York sales tax vendors a collection allowance in the form of a credit against taxes due. The allowance also applies to Connecticut based vendors participating in the Connecticut/New York Reciprocal Tax Program. Participating vendors may take a 1 1/2 % credit on their Schedule K returns (Schedule for Connecticut Vendors to Report New York State and Local Sales and Use Tax) against the New York sales tax collected from their customers. The credit is to be computed on the amount of New York State sales tax that is required to be collected on taxable sales made during the filing period. The credit is not allowed against the Connecticut sales and use taxes.

The credit is likewise not allowed against any New York tax imposed on vendors attributable to the following sources:

• sales or use taxes imposed by localities (counties, cities and school districts), or the 1/4 % tax imposed in the Metropolitan Commuter Transportation District;
• the prepaid tax on motor fuel or diesel motor fuel;
• the 5% special tax on passenger car rentals;
• the additional 5% tax imposed on sales of information and entertainment services offered by means of telephone or telegraph; or
• the New York State use tax.

CLAIMING THE CREDIT: The credit is equal to 1 1/2 % of the amount of New York State sales tax required to be collected on eligible New York sales, up to a maximum credit of $100 per quarter, per vendor. Connecticut vendors may claim the credit quarterly on the Schedule K required to be filed for monthly or quarterly periods beginning on or after October 1, 1994.

QUARTERLY FILERS: Vendors filing quarterly returns may take the credit on the OP-284Q, Quarterly Schedule K.

MONTHLY FILERS: Vendors filing monthly returns may take the credit for the three months of each quarter on the new OP-284MVC, Monthly Schedule K (VC). This new schedule will be filed for the third month of each quarter in place of the OP-284M, Monthly Schedule K. Monthly filers will continue to file the OP-284M, Monthly Schedule K, for the first and second months of each quarter. The credit may only be taken quarterly, not monthly.

Example: A monthly filer sends in standard Monthly Schedule K returns for January and February and a Monthly Schedule K (VC) for the month of March. Credit for this first quarter of the year may only be taken on the March Monthly Schedule K (VC) for January, February and March.

A return must be timely filed and the amount of tax shown due on the return, after allowance for the credit, must be paid in full to be eligible for the credit allowance (1137(f) of the New York State Tax Law).

EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in state or federal laws, regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers and tax practitioners. 

SN 95(1)
Sales and Use Taxes
Issued: 1/3/95