What Do You Use For Tax Records A Register A Log Or A Journal

Recordkeeping Requirements for Sales Taxation Vendors

Tax Bulletin ST-770 (TB-ST-770)

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Upshot Appointment: Updated June two, 2011

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Introduction

If you are registered for purposes of New York State'due south sales revenue enhancement you are a trustee of New York Land and you lot have a responsibility to collect the proper amount of sales revenue enhancement from your customers and to remit the taxation you have collected with your timely filed sales tax return.

Equally a registered sales tax vendor, you are required to go along accurate records of all sales and purchases that you make. Keeping detailed records of your business functioning will help you gear up accurate and complete sales revenue enhancement returns. Detailed records will also serve as documentation of the accuracy of your returns if you are audited.

While this message does non provide an exhaustive list of the records you must keep, information technology does give an overview of those records and references to more resource on recordkeeping requirements.

Sales Tax Record Keeping Requirements

Video: Sales Tax Record
Keeping Requirements

Recordkeeping rules

When you file a sales tax render, it must bear witness:

full sales,
taxable sales,
purchases by the business organization subject to tax on which no revenue enhancement was paid to the seller,
credits (if any),
sales and apply taxes due for each locality, and
whatever other special taxes due.

All of your records must be dated and kept in good order. Your records must provide sufficient detail to independently determine the taxable status of each sale and the amount of tax due and collected. Y'all must be able, through your records, to connect an exempt auction to a item purchaser to the exemption document you lot have on file for that sale or purchaser. If you upshot an exemption certificate when you make a purchase, you must maintain a record of the buy and be able to prove the exempt use.

What records to keep

Sales records

You must continue records of every sale, the amount of the sale, and the sales tax on the sale. Your must retain a true copy of each:

sales slip, invoice, receipt, contract, statement, or other memorandum of auction;
guest check, hotel guest bank check, receipt from admissions such every bit ticket stubs, receipt from dues; and
cash register tape and any other original sales document.

If no written certificate is given to the purchaser, you must continue a detailed daily record of all cash and credit sales in a daybook or similar journal. Ask your accountant for assistance if y'all aren't sure how to do this.

If yous sell both taxable and nontaxable appurtenances or services, you must identify which of the items y'all sell are subject area to sales taxation and which are not on the invoice or receipt. For example, a cash register tape must list each particular sold with enough item to determine whether that item is subject to sales taxation. Yous must ever separately state the corporeality of sales taxation due on the invoice or receipt that y'all give your customer. For more data, come across Tax Bulletin Taxable Receipt (TB-ST-860).

If you deliver the production or service to a identify other than your place of business, y'all must maintain records that prove where delivery took place. A special rule applies to motor vehicles, trailers, and certain boats. For more information, run across Publication 750, A Guide to Sales Tax in New York State.

Buy records

Records must exist maintained to plant the taxable status of all purchases of belongings or services. Buy records should include records related to:

purchases subject to state and/or local taxes,
purchases for resale (due east.yard., inventory and raw materials), and
purchases exempt from state and/or local taxes for reasons other than for resale.

Buy records must substantiate all your expenses and your cost of goods sold. These records should also testify that your business's purchases bear a reasonable human relationship to your business's sales.

You should likewise keep any other record or document that, given the nature of your business, would be necessary to prove that y'all have collected and paid the proper amount of sales or use tax due.

Point-of-Sale (POS) systems

POS systems are utilized to record sales to a business concern'due south customers. In many ways, POS systems take the place of a traditional cash register. If your business organisation uses a POS system, you must comply with the rules and requirements outlined in this department.

When using POS systems, all sales and transactions are fabricated through a estimator system. The organization records what you're selling, the selling price, and the quantity sold. Then it calculates the full due, including revenue enhancement, and tells you how much change is due. The system should record every auction and track all transactions.

POS system sales records to be kept

Each POS transaction tape must provide enough detail to independently make up one's mind the taxability of each sale and the amount of tax due and collected. Detailed data required for each sales transaction includes, merely is not express to the:

individual particular(s) sold,
selling toll,
tax due,
invoice number,
date of sale,
method of payment, and
POS terminal number and POS transaction number.

Summary documents should exist designed then that the details underlying the documents, such equally invoices and vouchers, may be identified and made available upon request.

Any boosted reports and schedules relating to the preparation of the tax render must be maintained and made available upon request.

POS system purchase records to be kept

Detailed information required for each purchase transaction includes, just is not express to the:

individual item(s) purchased,
date of buy,
purchase price,
vendor name,
invoice number,
total invoice amount,
purchase order number, and
method of payment.

Any related inventory organization must as well exist maintained and made available upon asking.

Any additional purchase reports, schedules or documentation that reconcile to other books and records, such as buy journals or a general ledger, must be maintained and made available upon request.

In society to exist considered consummate, the electronic records must let the directly reconciliation of the receipts, invoices, and other source documents with the entries in the books and records and on the returns of a taxpayer. If this reconciliation is not possible, the records may be deemed inadequate to permit a detailed inspect and another audit methodology (such every bit a sampling) may be used.

POS organisation internal controls

Users of POS systems must maintain auditable internal controls to ensure the accurateness and abyss of the transactions recorded in the POS system.

The records must provide the opportunity to trace any transaction dorsum to the original source or forrad to a last total.

Audit trail details include, but are not limited to:

internal sequential transaction numbers;
records of all POS terminal activity; and
procedures to account for voids, cancellations, or other discrepancies in sequential numbering.

The POS audit trail or logging functionality must exist activated and operational at all times, and it must tape:

any and all activeness related to other operating modes bachelor in the system, such every bit a training fashion; and
any and all changes in the setup of the organisation.

Failure to have the POS audit trail or logging functionality activated and performing these functions is evidence of a lack of POS organization internal controls.

Any and all documentation describing the automatic data processing of the POS organization must exist made bachelor upon request.

How long must I keep these records?

You must proceed all of your records for a minimum of iii years from the due date of the return to which those records relate, or the date the return is filed, if afterward. You lot must make the records available to the Tax Section upon request. The Tax Department may require you to go along records for a longer menstruum of time, such as when the records are the discipline of an audit, court case, or other proceeding.

If you use a POS system and your organisation lacks the storage capacity to comply with the iii-year retention menstruation, yous must transfer, maintain, and have available in a car-sensible and auditable grade¹ any data that has been removed from the POS system. If you modify POS systems, y'all must ensure that the data from the old system is transferred, maintained, and available in a motorcar-sensible and auditable form.

Maintaining records electronically

If yous maintain records in an electronic format, all the requirements for paper records too apply to records created and stored electronically. Records that are maintained in an electronic format must be made available to the Taxation Section in an electronically readable form. See Publication 132, Computer-Assisted Audits - Guidelines and Procedures for Sales Tax Audits.

When your records are considered inadequate

Your records may be considered inadequate if:

they don't verify sales receipts,
they don't verify whether those receipts are subject to sales tax,
they don't provide details of each individual transaction (summary reports and daily summary or "Z" tapes are non sufficient),
they don't verify the taxable status of your purchases,
they don't testify that your concern's purchases correlate to your business's sales,
it's not possible to bear a consummate audit using those records,
you fail to make your records available to the auditor,
they are non in a form that can be audited by the Taxation Department, or
an evaluation of your bookkeeping organization discloses that the system does not provide adequate internal control procedures which assure the accurateness and completeness of the transactions recorded in the books and records (due east.g., the lack of sequentially numbered invoices or guest checks, or the lack of dates on receipts).

Consequences of inadequate records

If your records are considered inadequate, you may:

exist discipline to an estimated audit methodology to determine any boosted taxes due,
be subject to penalties and interest if boosted revenue enhancement is plant to be due,
exist subject to criminal penalties if you lot willfully failed to maintain proper records, and
have your Document of Dominance suspended or revoked.

See Publication 131, Your Rights and Obligations Under the Tax Constabulary, and Tax Bulletin Sales and Utilize Tax Penalties (TB-ST-805).

Additional recordkeeping requirements for certain vendors

Boosted recordkeeping requirements apply for vendors in the post-obit businesses:

Retail nutrient stores and other establishments that accept food stamps. Meet TSB-M-87(12)South, Exemption from Sales Tax on Purchases of Eligible Nutrient with Food Stamps.
Show and amusement promoters. See information beginning on folio 40 of Publication 750, A Guide to Sales Tax in New York State.
Materialmen. See TSB-M-99(two)S, Materialmen - Pay When Paid, and Grade ST-112, Annual Application for a Materialman to Remit Sales Tax Under the Pay-When-Paid Selection.
Parking garage operators in Manhattan. Meet Form TP-832, Special Requirements for Parking Facility Operators Located in Manhattan.

¹ Automobile-sensible and auditable course ways that the data should be stored in a ordinarily used format and not stored or presented to the department in a format readable merely by proprietary software. (dorsum)

Note: A Tax Bulletin is an informational document designed to provide full general guidance in simplified linguistic communication on a topic of interest to taxpayers. It is authentic as of the engagement issued. However, taxpayers should be aware that subsequent changes in the Revenue enhancement Law or its interpretation may affect the accuracy of a Taxation Bulletin. The information provided in this certificate does not encompass every situation and is not intended to replace the police force or modify its meaning.

Updated: March 15, 2022

Source: https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/record-keeping_requirements_for_sales_tax_vendors.htm

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