Franchisors: if you have franchisees in New York, remember to file your annual Information Return

If you are a franchisor and you have at least one franchisee operating in the state of New York, you probably know that your annual information return is due to the state in about a month. The annual due date for franchisors that have previously filed there is June 20th. If you haven't previously filed the information return in New York, then your return was due on or before March 20th. 

The information return is designed to assist New York’s tax authorities in tracking and verifying state and local income and sales tax payments by in-state franchisees. The information that you are required to provide on the return includes the gross sales of the each New York franchisee as reported to you by them, the total amount of sales by you to each of your New York franchisees, and any income reported to you by the franchisee. You are also required to give each franchisee listed on the report a summary statement showing the information you reported to the state. Be warned: any franchise company with New York franchisees that fails to file the information return may be assessed a fine for each one of its franchisees operating in the state, with a maximum fine of $10,000 per reporting period.

The due date for your return will be contingent upon whether you've filed a return in previous years. For the first two filing years, your return is due on or before March 20th, and should cover the period from March 1 of the previous year to February 28th (or February 29th, if it's a leap year) of the current year. After the first two years that you file, your annual information return is due by June 20 of each year. If you are unable to file the return by the due date, you may be able to seek a 90-day extension.

For more information about the annual report and to file the return or a request for extension electronically, vist the New York State Department of Taxation and Finance's website at: http://www.tax.ny.gov/enforcement/audit/fran.htm.

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