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What You Need to Know About New York’s Deadlines for Appealing a Sales Tax Assessment or Refund Claim

New York sales tax
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What You Need to Know About New York’s Deadlines for Appealing a Sales Tax Assessment or Refund Claim

When disputes arise over you or your client’s New York sales and use tax, knowing the protest options available is essential for proper resolution of your claim. Equally important, is awareness for how these appeal processes work and the rules in place that sometimes work against unsuspecting taxpayers. New York law imposes various deadlines against businesses when appealing their sales tax assessments or claiming a sales tax refund. In this article, we’ll cover the following:

  1. Explain what New York’s filing deadlines are for appeals,
  2. Discuss recent cases involving deadline issues, and
  3. Provide some guidance for taxpayers looking to avoid a lapse of their appeal rights.

1. New York’s Deadlines for Appealing a Sales Tax Assessment or a Denied Refund Claim

The New York Department of Taxation and Finance (NYDTF) is the state agency responsible for administering your sales and use tax compliance. When issues arise with your payments of sales and use tax, the NYDTF is who will contact you or vice versa when claiming a sales tax refund. Businesses that want to appeal an assessment after an audit or another event will need to consider the following appeal methods available after receiving a Notice of Determination (NOD) for their assessment amount or denied refund claim:

  • Request for Conciliation Conference: This is an informal appeal process with an NYDTF agent and arbiter that you or your sales tax helper can request using Form CMS-1-MN. You generally have 90 days to make this filing after receiving notice.
  • Petition to Division of Tax Appeals (DTA): A more formal appeal that businesses can make by filing a petition through Form TA-100, usually within 90 days of receiving a NOD or a Conciliation Order.
  • Court Review: After exhausting appeal options with the NYDTF and DTA, your next appeal stage is through New York’s traditional court system. Depending on the issues, your case could reach the state’s highest court, The Court of Appeals. You generally have four (4) months to file an appeal after receiving an order from the DTA.

Check out our New York Sales & Use Tax Audit Guide and the New York Taxpayer Bill of Rights for more information on these processes.

A Note on the Statute of Limitations for Sales Tax Refund Claims in New York: When you have overpaid the amount of sales and use tax owed to the NYDTF, you can file a claim for a refund or credit using Form AU-11. You generally have the later of the following dates to file a refund claim—two years from the date you paid the tax or three years from the date the tax was due. See TB-ST-350 for more information.

How to Find the New York Sales Tax Appeal Deadline on NYDTF Notice

All notices from the NYDTF should contain a statement explaining when the 90-day period to file an appeal begins. Carefully read the notice in its entirety and confirm with your CPA or sales tax professional on the filing deadline. Keep all materials related to the notice, including the envelope, which contains important information like the postmark date.

What Happens When You Don’t Timely File a New York Sales Tax Appeal or Refund Claim?

The consequence of failing to timely respond to a notice from the NYDTF or file an appeal can be devastating. New York law generally bars untimely appeals, which means you could be stuck with an unfair assessment, interest, or penalties. This is true even if you have otherwise valid reasons for the appeal. In some cases, you may have recourse through state court or beyond but being timely with NYDTF appeals is a crucial first step in protecting your rights as a taxpayer.

2. Tax Appeals Tribunal Denies Recent Taxpayers Appeals for Untimeliness

Two recent cases demonstrated the state’s unwillingness to accept late appeal petitions regarding sales tax assessments. First, In the Matter Carmen R. Altamirano, the Tribunal upheld the NYDTF’s Conciliation Order denying the taxpayer’s request for a Conciliation Conference. The NYDTF had sent 10 notices on February 17, 2021, but the taxpayer did not file a request for a Conciliation Conference until June 14, 2021. The NYDTF dismissed the request and the taxpayer appealed to the Tribunal. The Tribunal accepted the dismissal because of the taxpayer’s untimeliness despite her claiming no involvement with the business responsible for generating the sales tax liability. The Tribunal also disregarded the taxpayer’s statements that she attempted to request a conference through phone communications.

In another responsible person case, the Tribunal also upheld dismissal of a request for a Conciliation Conference because the taxpayer’s appeal was untimely. The taxpayer in In the Matter of Soo Young received a series of NODs from the NYDTF with the latest dated May 22, 2020. The taxpayer did not file an appeal until September 10, 2020. In her appeal, the taxpayer claimed she was the victim of identity theft from her former boyfriend and claimed he had stolen her mail before she could see the NODs. She also claimed to have sent the NYDTF copies of police reports and communications showing no involvement with the business that generated sales and use tax liability. Despite these facts, the Tribunal accepted the dismissal of a Conciliation Conference request because the taxpayer’s appeal was late.

3. How to Prevent Time-Barring Your Sales Tax Appeals or Refund Claims

The receipt of NODs and other communications from the NYDTF is a serious matter and is usually the trigger for your appeal rights. Taxpayers that receive notices should take proactive measures to preserve their appeal rights, no matter the nature of the underlying issues for refuting the assessment. Consider the following steps when handling communications from the NYDTF:

  • Involve a sales tax professional as soon as you receive an NYDTF assessment or notice you believe to be incorrect. You can schedule a free consultation with Sales Tax Helper here.
  • Keep records of all written notices (including the postmarked envelopes) and take notes of other communications with the NYDTF (e.g., phone calls, in-person meetings, etc.).
  • Do not mistake verbal or informal communications as sufficient requests or petitions for an appeal with the NYDTF.
  • Perform regular reviews with our sales tax professionals to identify opportunities to appeal assessments or claim a refund for taxes already paid.

If you have questions about New York sales tax audits, assessment appeals, or refund claims, our team of experienced professionals is here to help. We manage all aspects of these challenges with state tax agencies so your team can focus on what matters most—the business. Schedule a free consultation today.