- All sales of tangible personal property delivered into New York, both taxable and exempt
- No deduction for expenses
- Marketplace sales are included in both the dollar and transaction count
- Sales of services are not included in the economic nexus threshold calculation
Affiliate nexus
New York enacted affiliate nexus effective June 1, 2009, under Tax Law §1101(b). A remote seller is treated as having nexus in New York when an affiliated person, defined as an entity with 5% or more common ownership, whether directly or through common 5% ownership, either uses the same trademarks, trade names, or service marks as the remote seller in New York, or performs activities in New York that help the remote seller develop or maintain its New York market.
An exception applies when an affiliated entity provides only accounting, legal, strategic planning, or cash management services — those activities alone do not create affiliate nexus. Non-affiliated fulfillment centers do not create affiliate nexus; only affiliated fulfillment centers trigger this provision.
New York also maintains click-through nexus, enacted in 2008 as the first such law in the nation, under Tax Law §1101(b)(8)(vi) of nexus arises when a New York resident receives a commission for referring customers to the remote seller and cumulative gross receipts from all such New York referrals exceed $10,000 in the preceding four quarterly periods. The presumption can be rebutted by demonstrating that the New York resident did nothing more than post a passive static web link.
Physical nexus
Physical nexus in New York is governed by Tax Law §1101(b)(8)(i)(B)-(D). Nexus is established by maintaining any office, store, warehouse, or other place of business in New York. The presence of employees, independent contractors, agents, or representatives who operate in or enter New York to solicit business also establishes nexus. Making regular deliveries into New York using company-owned vehicles, defined as at least 12 times per calendar year, constitutes physical presence as well.
Shipping exclusively via USPS or a common carrier such as UPS or FedEx does not create physical nexus under this provision.
Trailing nexus
New York has no formally stated trailing nexus duration for physical presence departures. For economic nexus, the collection obligation continues until the immediately preceding four sales tax quarters show gross receipts below $500,000 AND transactions below 100 with no other New York connections, creating an implicit trailing period of up to four rolling quarters. New York's four sales tax quarters run March 1 through May 31, June 1 through August 31, September 1 through November 30, and December 1 through February 28 or 29.
