Bronx, NY asked in Tax Law for New York

Q: Do I charge a New York State Sales Tax on a 50% Deposit Payment

I will be selling a product as a Pre-Order, buyers will need to make a deposit payment of 50% of the retail price. Do I add the New York State Sales Tax on the deposit invoice or is this done at the end when the final remaining 50% is paid? Buyer will receive a Deposit Payment Invoice and the Final Invoice at the end when the product ships. Any help would be appreciated, thank you!

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1 Lawyer Answer

Matthew Frank Medaglia

Answered
  • Tax Law Lawyer
  • Staten Island, NY
  • Licensed in New York

A: if you are on the accrual method, you will generally record the sale when it is made. In that case you should collect sales tax at that time.

If you are on the cash method, you should collect sales tax as you receive payments.

Generally, NY wants sales tax when the customer takes possession.

You should speak to an accountant for best practices on this issue.

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