Help Out the Sandy Effort Without Creating Nexus
In an effort to assist with Hurricane Sandy recovery efforts, The New York Department of Taxation and Finance has announced that the State will not assess corporate franchise taxes, withholding taxes, or personal income taxes on organizations sending employees into in the State of New York for disaster mitigation purposes.
Specifically, corporations that do not otherwise have nexus with New York will not be considered to have nexus (prior to January 1, 2013) if the corporation (1) sent employees into New York temporarily to work solely as part of the Hurricane Sandy relief efforts, or (2) established a temporary office or other place of business in New York because of the effects of Hurricane Sandy on the corporation's business location outside of New York. After December 31, 2012, if the Corporation has employees, an office, or other nexus-creating activity within New York, then the Corporation has nexus as of January 1, 2013.
Further, employers are not required to withhold New York State income tax from wages paid to employees who are nonresidents of New York and who are (1) temporarily working in New York solely as part of the Hurricane Sandy relief efforts, or (2) working in New York solely because the employer temporarily relocated employees to New York or temporarily established an office in New York because of the effects of Hurricane Sandy on the employer's business location outside of New York. Again, this exemption ended on December 31, 2012. Note that if an employer has already withheld New York state income tax from an employee who would have been covered by this policy, the employer should refund the tax withheld to the employee. Also note that this exemption applies to self-employed individuals, as well.
Unchanged: New York sales tax. Taxpayers should be aware that many products (supplies, hammers, prepared meals) and services (repair and maintenance of property) being sold as part of the recovery are, and remain, subject to New York State sales tax.