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NY State Tax Department backs away from ‘retroactive’ sales tax enforcement

22 November 2010 10.00 GMT

(USA) - The New York State Department of Taxation and Finance has officially committed not to seek payment of sales or use taxes on lighting design services for periods prior to 1 December 2009.

The news came from IALD following a letter received by IALD President Katherine Abernathy dated 3 November 2010 from Robert D. Plattner, Deputy Commissioner.
On 23 August 2010, IALD members Stephen Lees, FIALD, and Ken Douglas, IALD, along with IALD Public Policy Advisor John Martin, met with Mr. Plattner and other key executives of the New York State Department of Taxation and Finance. The purpose of the meeting was to discuss the Advisory Opinion issued by the Department on 15 October 2009 requiring lighting designers to collect sales taxes on lighting design services for interior spaces in the State of New York.  The meeting focused on two primary issues:
1.The importance of not enforcing the new requirement for periods prior to the issuance of the Advisory Opinion in October 2009. Lighting designers had not been aware of the State's position and could have been subject to back taxes, penalties and interest for several years into the past. The prospect of such "retroactive" enforcement thus presented a serious potential liability for lighting designers based in New York. Mr. Plattner's letter removes that threat.
2.The need for clarity in the Department's ruling, so that lighting designers would be able to comply. The IALD representatives presented the Department executives with the IALD's complete FAQ list, developed with input from IALD members and consultants. The Department representatives promised to develop a written response to the FAQ list and send it to the IALD as soon as it is available. The most recent information from the Department is that they expect to deliver a completed response in the form of a "Bulletin" before the US Thanksgiving holiday on 25 November 2010.
Lighting designers working in New York should continue to collect sales tax from their clients for work on building interiors, per the 15 October 2009 Advisory Opinion, for all work billed after 1 December 2009. The IALD suggest members contact John Martin ( ) with any questions they may have.


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