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.
Thursday, August 20, 2009
Thursday, August 6, 2009
New York Tax Law Update!
The IFA has received a response from the New York State Department of Taxation and Finance to its July 20 letter.
Reporting Deadlines: The Department is creating an automatic 90-day extension process for the initial as well as all future reporting deadlines. Prior to the initial deadline (set by the Legislature for September 20) the Department will post on its website instructions to request an automatic 90-day extension to December 20, 2009. All future annual deadlines, which were to be due March 20, will be given similar treatment, meaning that if a franchisor requests the extension all annual reports will be due June 20. Permanently moving these deadlines, rather than creating an extension process, would have required an act of the New York State Legislature.
Forms: In the coming days, the Department will post on its website the standardized form franchisors must use to report the required information.
Supplier Sales: The Department has dropped the requirement that franchisors report to the state sales made by “designated” or approved suppliers to New York franchisees. However, sales of supplies from a franchisor or its affiliates directly to a New York franchisee must still be reported.
Franchisee Gross Sales: If the franchisee currently reports gross sales to the franchisor, this information must be supplied to the state in the required reports. If a different performance measure is used (such as room-nights in lodging or cents-per-gallon of product in food service) that calculation must be explained and, where possible, the quantitative data for the relevant reporting period supplied to the state.
Franchisee Identifying Information: The requirement that franchisors report to the state the name, address and New York certificate of authority or federal tax identification number of the franchise remains in effect.
Reporting Deadlines: The Department is creating an automatic 90-day extension process for the initial as well as all future reporting deadlines. Prior to the initial deadline (set by the Legislature for September 20) the Department will post on its website instructions to request an automatic 90-day extension to December 20, 2009. All future annual deadlines, which were to be due March 20, will be given similar treatment, meaning that if a franchisor requests the extension all annual reports will be due June 20. Permanently moving these deadlines, rather than creating an extension process, would have required an act of the New York State Legislature.
Forms: In the coming days, the Department will post on its website the standardized form franchisors must use to report the required information.
Supplier Sales: The Department has dropped the requirement that franchisors report to the state sales made by “designated” or approved suppliers to New York franchisees. However, sales of supplies from a franchisor or its affiliates directly to a New York franchisee must still be reported.
Franchisee Gross Sales: If the franchisee currently reports gross sales to the franchisor, this information must be supplied to the state in the required reports. If a different performance measure is used (such as room-nights in lodging or cents-per-gallon of product in food service) that calculation must be explained and, where possible, the quantitative data for the relevant reporting period supplied to the state.
Franchisee Identifying Information: The requirement that franchisors report to the state the name, address and New York certificate of authority or federal tax identification number of the franchise remains in effect.
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