Assisting a Client with Sales Tax Compliance and Voluntary Disclosure Agreement in New York City

A client who had been renting out electronic scooters in New York City since 2017 reached out to us through our website seeking guidance on sales tax compliance. They had previously believed that their business was exempt from sales tax as they considered themselves to be in the service industry. After conducting research and contacting the relevant department, we informed them that they need to comply with sales tax requirements in New York, California, Colorado, Florida & Massachusetts.

Upon calculating their sales tax liability, we found that they owed over $100K including interest and penalties. Rather than paying the outstanding liability outright, we recommended that they participate in the Voluntary Disclosure Agreement (VDA) program. We assisted them with all the necessary paperwork and liaised with the department multiple times to ensure a smooth process. Through the VDA program, our client was able to save approximately $15,000 in penalties and have a portion of their interest waived. By taking this proactive approach, our client was able to avoid legal complications that could have arisen from noncompliance with sales tax regulations.