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How does Avalara Calculate NY PrompTax payments?

Overview

NY requires us to participate in their PrompTax program and I am confused about what is due to them. I don't see the payments on the Liability worksheet and want to know how the payments are calculated.

Environment

Avatax Returns

Resolution

  • Avalara uses the Estimated method to calculate NY Promptax, which requires an extra payment on the quarterly return.

    • The Estimated method is calculates the payment from at least 75% of one-third of your liability for the comparable quarter of the preceding year.

    • Example: Company B uses the estimated method to calculate the PrompTax payment due January 2014. The tax liability for the comparable quarter of the previous year (December 2012 through February 2013) was $3 million. The calculation would be as follows: ($3,000,000 ÷ 3) x .75 = $750,000.

  • The first two months of every quarter Avalara will pay the exact Sales Tax liability reported by the customer.

  • On the Quarterly return there will be an additional amount prepaid for the next Quarter.

    • This additional pull will only occur on Quarterly cycles.

  • For more information, please review form TR-682-N.