New York Sales Tax License Revocation / Business
Shutdown Checklist
Introduction
The Department of Taxation and Finance may suspend or revoke your Certificate of Authority under Tax Law Section 1134, which is your authorization to collect sales tax in New York.
Suspension is temporary pending compliance; revocation permanently cancels the certificate.
These administrative actions occur after repeated non-compliance with sales tax filing or payment requirements.
Understanding what triggered this action and what steps follow is critical, because making taxable retail sales without a valid certificate violates Tax Law Section 1817 and may result in civil penalties up to $10,000 and criminal prosecution as a misdemeanor punishable by up to 1 year in prison.
What This Issue Means
Certificate of Authority revocation under Tax Law Section 1134 prohibits you from making retail sales of tangible personal property or taxable services in New York. You may not collect sales tax without a valid certificate. Revocation differs from a penalty notice or payment demand—it is an enforcement action that terminates your sales tax registration status entirely.
Revocation is permanent and requires reapplication, not reinstatement. The revocation permits business operations, except those requiring sales tax collection under Tax Law Article 28.
Why the State Issued This or Requires This
New York revokes Certificates of Authority when a business owner demonstrates a pattern of non-compliance. Common triggers include failure to file sales tax returns for multiple quarters or years, consistent non-payment of sales tax owed, substantial underreporting of sales or tax liability, failure to respond to prior notices or payment demands, and making retail sales of tangible personal property or taxable services. At the same time, your Certificate of Authority was suspended or revoked.
Making taxable retail sales without a valid certificate violates Tax Law Section 1817 and is a misdemeanor. The Department issues revocation notices to enforce compliance and protect the tax system. Once issued, revocation remains in effect until you resolve underlying violations and apply for a new Certificate of Authority.
What Happens If This Is Ignored
Certificate of Authority revocation is separate from tax debt collection. If you owe unpaid sales tax, the Department may file a tax warrant under Tax Law Section 1141 regardless of certificate status. A filed warrant creates a lien on real and personal property and enables collection through income executions up to 10 percent of gross wages, bank levies, and property seizure.
Making retail sales of tangible personal property or taxable services without a valid Certificate of
Authority is a misdemeanor punishable by up to 1 year in prison and fines up to $10,000. Civil penalties may also apply under Tax Law Section 1145. The longer the revocation remains unaddressed, the more complicated and costly it becomes to resolve.
What This Does NOT Mean
A revocation notice does not automatically mean criminal charges are filed against you.
Revocation does not mean your business assets will be seized immediately without further legal process. Certificate of Authority revocation terminates your authorization to make taxable retail sales and does not cancel underlying tax debt. You must resolve all outstanding liabilities and apply for a new Certificate of Authority to resume taxable sales.
Checklist: What to Do After Receiving a Revocation
Notice or Identifying This Issue
Step 1: Locate and Review the Revocation Notice
Find the official revocation notice from the New York Department of Taxation and Finance. Look for the date of the notice, the specific reasons for revocation, your sales tax account number, the effective date of the revocation, contact information for the department office handling your case, and any deadline for response or appeal. Keep the original notice in a safe place. Contact the department directly to confirm your revocation status if you cannot locate the notice.
Step 2: Verify Your Current Compliance Status
Determine what taxes and returns are outstanding. Contact the Sales Tax Information Center at
(518) 485-2889, Monday through Friday, 8:30 AM to 4:30 PM Eastern Time. Visit the NY DTF
website at tax.ny.gov or access your online account through Online Services to view account status, filed returns, and payment history.
Request a record of all outstanding sales tax returns, the total amount of unpaid sales tax with penalties and interest, dates of any prior notices sent to you, and confirmation of whether your account is under collection proceedings. Request this information in writing, and keep copies of all correspondence.
Step 3: Gather Required Financial and Business Records
Collect all business bank statements for the period covered by unfiled returns. Gather sales records, invoices, or point-of-sale reports. Locate prior sales tax returns, whether filed or unfiled.
Find any correspondence with the Department of Taxation and Finance.
Compile proof of any payments made toward sales tax obligations and current federal tax documentation, including your EIN and business formation documents. These records will be needed to resolve the underlying compliance issue.
Step 4: Determine If You Need Professional Representation
Decide whether to handle this directly or work with a tax professional. Hire a certified public accountant, tax attorney, or enrolled agent licensed to practice before New York’s tax department if you choose professional representation.
Provide them with all documents gathered in Step 3. Authorize them to communicate with the state on your behalf using Form TA-100, Power of Attorney. A professional can help identify missing returns, calculate accurate tax amounts, and negotiate options with the state.
Step 5: Calculate or Obtain an Accurate Tax Bill
Determine the total amount owed, including unpaid sales tax, for each quarter or period. Sales tax penalties under Tax Law Section 1145 include failure to file at 5 percent per month up to 25 percent, failure to pay at 0.5 percent per month up to 25 percent, and substantial understatement at 10 percent if the error exceeds the greater of 10 percent of the tax due or
$2,000.
The minimum penalty for returns over 60 days late is the lesser of $100 or 100 percent of the tax due. Interest on unpaid sales tax accrues daily at rates set quarterly by the Tax
Commissioner, equaling the federal short-term rate plus 5.5 percentage points, with a minimum of 7.5 percent. Interest is calculated on a simple daily basis for the unpaid balance. Current rates are published at tax.ny.gov/pay/interest. Contact the Department of Taxation and Finance to request a detailed bill if one was not included with the revocation notice.
Step 6: Explore Payment or Settlement Options
Contact the Department of Taxation and Finance Collections Unit to discuss available options.
Full payment of the entire amount owed resolves the debt immediately. The Department may approve an Installment Payment Agreement that allows you to pay outstanding tax debt in monthly installments; you must submit Form DTF-4, Application for Installment Payment
Agreement, along with financial documentation.
Interest continues to accrue on unpaid balances during the IPA. The Department may accept an
Offer in Compromise under Tax Law Section 171 based on doubt as to collectibility when you cannot pay the full amount and have no assets to satisfy the debt, or based on effective tax administration when collection would create economic hardship or be inequitable.
The Department may abate penalties for reasonable cause under Tax Law Section 1145 when you exercised ordinary business care and prudence but were nevertheless unable to comply; you must submit a written request explaining the circumstances and providing supporting documentation. Request all available options in writing.
Step 7: Respond to the Revocation Notice Within the Deadline
Meet the response deadline if the notice included one. Your response should consist of acknowledgment that you received the notice, a factual and honest explanation of what caused the non-compliance, documentation of any hardship or business disruption that contributed, and a clear statement of your intended action, such as payment, payment plan, settlement request, or appeal. Include copies of supporting documents. Send your response via certified mail with a return receipt to the address listed on the notice.
Step 8: Request Reapplication After Compliance Is Achieved
Contact the Department of Taxation and Finance in writing to apply for a new Certificate of
Authority once all outstanding returns are filed and all taxes, penalties, and interest are paid in full, or an Installment Payment Agreement is approved and being followed. Reference your sales tax account and the original revocation notice.
Confirm that all outstanding compliance issues have been resolved and provide proof of payment if applicable. The Department will review your application and notify you when your new certificate is issued.
- Missing the response deadline deprives you of the opportunity to present your case
- Ignoring the notice entirely leads to continued enforcement, including tax warrants,
- Providing incomplete or inaccurate information results in the denial of your request and
- Filing missing returns prevents additional penalties from accruing and demonstrates
- Not documenting communication leads to disagreements about what was discussed or
- Making taxable retail sales without a valid Certificate of Authority violates Tax Law
- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
- Representation before state tax agencies
Step 9: Maintain Ongoing Compliance Going Forward
Filing frequency is based on your sales tax liability: vendors collecting $300,000 or more annually file monthly; those collecting $3,000 to $299,999 file quarterly; those collecting under
$3,000 may file yearly. Part-quarterly filers may be required to make advance payments.
Returns and fees are due on or before the 20th of the month following the reporting period. Pay sales tax owed by the due date.
Keep detailed sales and transaction records. Monitor your account status with the state regularly and respond immediately to any future notices from the Department of Taxation and
Finance. Set calendar reminders for return filing and payment deadlines to prevent future lapses.
What Happens After This Is Completed
The Department of Taxation and Finance reviews your response and documentation after you submit them. The Department does not publish standard processing timeframes for Certificate of Authority revocation responses or reapplication processing; processing time varies based on case complexity, outstanding liabilities, and current workload.
You will receive written notification of the outcome, which may include approval of a payment plan, a demand for full payment, an Offer in Compromise decision, or a request for additional information. Contact the Department directly for status updates on your case.
Common Mistakes to Avoid before further enforcement action is taken. income executions, bank levies, and property seizures. continued enforcement action. good-faith compliance. promised; keep copies of every letter, email, and phone call.
Section 1817 and may result in criminal prosecution and civil penalties.
Frequently Asked Questions
Can I appeal a sales tax Certificate of Authority revocation?
New York allows you to request a hearing before the Department of Taxation and Finance in some cases. The notice should explain whether an appeal or hearing is available. Time limits apply, so request this information immediately if you believe the revocation was issued in error.
How long does reapplication take after I pay everything owed?
After revocation, you must apply for a new Certificate of Authority; revocation is permanent and does not involve reinstatement. The Department does not publish standard timeframes for new
Certificate applications after revocation. After resolving all outstanding liabilities, submit a new application. Contact the Department for case-specific information.
Can I operate my business without a Certificate of Authority while resolving this?
You may not make retail sales of tangible personal property or taxable services without a valid
Certificate of Authority. Making such sales during revocation violates Tax Law Section 1817 and exposes you to criminal prosecution as a misdemeanor and civil penalties up to $10,000.
Consult a tax professional about whether your business type requires sales tax collection.
What if I cannot afford to pay the full amount owed?
The Department may approve an Installment Payment Agreement that allows you to pay in monthly installments; you must submit Form DTF-4 with financial documentation. The
Department administers an Offer in Compromise program with eligibility based on your financial circumstances and ability to pay under Tax Law Section 171.
Will a revocation show up on my credit report?
Certificate of Authority revocation is an administrative action and is not reported to credit bureaus. Tax warrants filed under Tax Law Section 1141 are public records and may appear in public record searches, potentially affecting business financing. Following policy changes in
2017 through 2018, current credit reporting practices generally exclude tax liens from consumer credit reports.
Can I transfer my business to a new legal entity to get a new Certificate of
Authority?
The Department evaluates whether a new entity is a continuation of a prior business under Tax
Law Section 1134. Responsible individuals from the previous entity—including officers, partners,
LLC members, or employees with authority over tax collection and payment—may be held personally liable under Tax Law Sections 1131 and 1133 for willful failure to collect or pay sales tax. Entity restructuring does not eliminate personal liability. Consult a tax professional before considering this option.
What happens if I file the missing returns but still cannot pay?
Filing the returns is essential even if payment cannot be made immediately. Filing stops additional penalties for non-filing and demonstrates intent to comply. You can then work with the
Department to establish an Installment Payment Agreement for the taxes owed using Form
DTF-4.
Closing
The revocation of a Certificate of Authority is a serious enforcement action that requires a prompt response. Respond promptly, collect precise information about the outstanding balance, and actively collaborate with the Department of Taxation and Finance to address any underlying violations.
You can address most revocations and issue new certificates through full payment, an
Installment Payment Agreement, or an Offer in Compromise. Taking immediate action and maintaining clear communication with the Department significantly improves the outcome.
Facing State Tax Enforcement Action?
If you’ve received a notice related to sales tax or payroll tax enforcement and aren’t sure how to respond, our team can help you understand your options and next steps.
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