Started DBA in NY in 2002 to do document prep and freelance writing. Filed no quarterly sales taxes. Illegal?

Question

Did receive 1099-MISC statements from for- and non-profit clients for whom I wrote/designed/took photos. Filed the DBA properly, but never applied for NY Certificate of Authority. Have since filed Federal income taxes (including sole proprietor income and expenses) without incident. Have not yet been contacted by the NYS Department of Taxation and Finance ...

Answer 1

It appears that document preparation would not be subject to NYS Sales Tax. However, you do not give enough information to give an accurate answer.

If you are collecting sales tax on your invoices, then you are committing tax fraud. There have been many recent press releases concerning individuals collecting NYS sales tax without remitting it to the State.

Answer 2

I gotta say that understand completely. I've got a friend who was entering a convenience store minding his own business when an uninsured, unlicensed illegal motorist drove into him and the store he was entering. Now he must to go to the Dr. once a month to have fluid drained from his spinal cord. No one will hire him even though he's willing to sign a workman's comp waiver in order to work. Insurance companies won't insure him. He's forced to be on social security and not even getting enough to support his family much less pay his mortgage. He would much rather be working. This state is a 'no fault' state and the person who hit him and the store got a $45 fine from a judge who said there was nothing else he could do.

Answer 3

If your services are taxable under NY law, and they probably are, you need to apply to NY to authorize you to collect taxes. If they realize you've been doing this all along but not collecting tax, they could charge YOU for the tax you should have collected so far but didn't.

If you've been charging your clients tax but not remitting it to the state, DEFINITELY illegal.