In case you missed it, sliced bagel tax is not the only new tax hitting New York this fall. Odds are that most real estate attorneys are more familiar with the bizarre bagel tax than a new tax on title services that they will now have to explain to their clients. The New York State Department of Taxation and Finance (the department) will now require title companies and their vendors to collect sales tax on abstracts of title, tax searches and municipal searches. The department’s new imposition of sales tax, which took effect Sept. 1, 2010, will force title companies to collect sales tax upon the delivery of the abstract or search to the purchaser. This recent change in policy has launched the New York title community into a frenzy as they aim to comply with this new requirement with very little guidance from the department.
A discussion of all of the technical aspects of the application of the sales tax is not possible here, but the following will provide a general summary of the new requirements imposed by the department.
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