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State adds fee to tax certificates Businesses required to pay $50 for ability to collect sales tax

Companies across New York State are opening their mailboxes to find an unpleasant surprise.

The New York State Department of Taxation and Finance is sending out letters ordering businesses to renew their sales tax certificates -- the piece of paper that allows them to collect sales tax on behalf of the state -- and pay a renewal fee of $50 apiece.

The renewal requirement is an effort to update New York State's registry of businesses that collect sales tax and remove inactive companies from the list. Letters are being sent out to about 5,000 businesses each week, with the goal of notifying every business by March 2012.

Business owners are not happy to learn of the new fee.

"It's outrageous," said Pat Potts.

Potts is president of Harbison Brothers, a 116-year-old Buffalo company that reconditions containers for the oil and chemical industries. She has 15 employees and remits sales tax quarterly.

"We collect the tax for the state, we fill out the paperwork for the state, keep records for the state, send the paperwork and the money to the state correctly and on time," she said. "And now the state wants to charge us $50 for the 'privilege' of doing it?"

The fees collected are expected to raise about $34 million for the state over three years.

But many business owners resent what they perceive as the government raiding their tills to close its own budgeting mistakes.

"We're not trying to pull the wool over anybody's eyes. There is a a big deficit and it's fair to say some of those fees will help shrink it, but there are some administrative costs involved in running the project," said Tom Bergin, a spokesman for the state tax department.

Businesses in New York State have never before been asked to renew sales tax certificate registration and they're skeptical the fee won't reappear.

"The tax department has a legitimate project on their hands and they really do need to get the job done," said Ted Potrikus, executive vice president of the Retail Council of New York State. "But they're asking the retail community to pay for something we thought we were already paying for out of our taxes."

Companies that do less than $37,000 in taxable sales annually and file once a year are exempt from the fee, but must renew registration.

Companies who are required to pay and fail to do so will be unable to collect taxes and be prevented from legally conducting business in New York State. They may also be subject to a $10,000 fine and misdemeanor charges.

Potrikus said that what may seem like a small fee to some makes a big impact for small business owners, such as barbers and landscapers.

"We're no longer being nickel and dimed to death, we're being twentied and fiftied to death," said Potrikus.


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