With Valentine’s Day and International Women’s Day now behind us, florists across New York have just experienced one of the busiest seasons of the year. New York flower shops see a surge in orders for roses, bouquets, and custom arrangements delivered to homes, offices, hospitals, and restaurants.
While the focus during these holidays is typically on fulfilling orders to the New York masses, these peak periods can also heighten New York sales tax audit and compliance risks. In New York, flower sales may appear straightforward, but the sales tax treatment becomes complex when deliveries cross state lines or when orders are processed through florist wire services.
The New York Department of Taxation and Finance provides specific guidance on the taxation of floral sales in Tax Bulletin ST-170 (Florists).
https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/florists.htm
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Flowers Are Taxable Tangible Personal Property
Under New York Tax Law §1105(a), sales tax applies to retail sales of tangible personal property unless a specific exemption applies. Further, flowers and floral arrangements fall within the definition of tangible personal property, as flowers are something that be touched, weighed, measured and perceptible to the human senses. As a result, when a florist sells flowers directly to a customer, the transaction is generally subject to New York sales tax.
Importantly, the New York sales tax rate is determined by the delivery location, not necessarily where the florist’s shop is located.
For example:
- A customer purchases flowers in Albany and takes them home — the Albany County tax rate applies.
- A customer orders flowers from Albany to be delivered in New York City — the New York City tax rate applies.
Additionally, the Department explains that delivery charges, service charges, and similar fees are part of the taxable base when they are associated with the sale of flowers.
The Department’s guidance on these rules can be found in Tax Bulletin ST-170:
https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/florists.htm
Sales Tax Sourcing Rules for Wire Service Follow a Different Rule
Flower sales often occur through florist wire services, where a florist receives the order, but another florist fulfills the delivery in a different jurisdiction.
New York applies a different sourcing rule in this situation.
When a florist receives an order through a wire service and transmits the request to another florist for fulfillment, sales tax is calculated based on the location where the order is first received, not where the flowers are delivered.
For example:
- A customer orders flowers through a Buffalo, Erie County, florist.
- The flowers are delivered by a New York City florist.
- The tax is based on the Erie County rate because that is where the order was accepted.
These transactions frequently cause confusion during audits, particularly if the florist’s books and records do not clearly show where the order originated.
Flowers Purchased by Caterers May Qualify for Resale
Another common issue involves floral purchases for weddings, corporate events, and other catered functions.
In some cases, flowers purchased by a caterer may qualify as purchases for resale if the florist receives a properly completed Resale Certificate (Form ST-120).
How New York Auditors Examine Florists During a Sales Tax Audit
Florists are often audited because their transactions involve multiple jurisdictions, delivery charges, and third-party order systems. During a New York sales tax audit, the Department commonly reviews several categories of records.
First, auditors examine point-of-sale reports and daily sales summaries to determine whether taxable receipts were properly reported. These reports are frequently compared against bank deposits and merchant processor statements to identify unreported sales and evaluate completeness of records. Many times, the Department identifies cash sales as the related discrepancy.
Second, auditors evaluate whether the correct tax rate was applied to deliveries made outside the florist’s home county. Because New York sourcing rules require tax to be based on the delivery location for direct sales, errors can occur when florists regularly deliver to multiple counties. The errors affect the applicable local sales tax rate.
Third, auditors review wire service transactions to determine whether the florist properly sourced the sale based on where the order was received. In many cases, insufficient documentation regarding the origin of the order can lead auditors to reclassify the transaction.
Fourth, the Department often examines delivery fees, service charges, and related charges to ensure they are included in the taxable receipt when they are part of the sale of the flowers.
Finally, auditors review resale and other exemption certificates for flowers sold to caterers or event planners. If a florist cannot produce a valid resale certificate, the Department may treat the transaction as a taxable retail sale.
Because New York floral businesses frequently experience seasonal spikes in sales around holidays such as Valentine’s Day, Mother’s Day, and International Women’s Day, even minor reporting errors during these periods can produce significant audit adjustments and assessments.
Why Florists Often Face Sales Tax Exposure
Florists may appear to be simple retail businesses, but several factors create compliance risks.
Common issues include:
- Incorrect sourcing of sales tax when deliveries cross county lines
- Improper treatment of wire service transactions
- Failure to include delivery or service charges in taxable receipts
- Missing or incomplete resale certificates
- Inadequate documentation showing where orders were received
These issues often arise because floral businesses rely on multiple ordering channels, including online systems, phone orders, and wire service networks.
Final Thoughts
Flowers are meant to celebrate occasions. However, florists in New York also involve specific sales tax rules that can easily be misunderstood.
After busy holidays like Valentine’s Day and International Women’s Day, it may be the perfect time for floral businesses to review their procedures for delivery-based tax sourcing, wire service documentation, resale certificate management, and sales tax reporting accuracy. Taking a proactive approach can help reduce the risk of significant exposure during a future sales tax audit.
Contact Sales Tax Helper
If your business is facing a New York sales tax audit or needs assistance reviewing sales tax procedures, the professionals at Sales Tax Helper LLC can help. Sales Tax Helper focuses exclusively on sales and use tax audits, controversy, advisory services, and multi-state compliance matters. Contact https://www.salestaxhelper.com to discuss your situation with a sales tax professional.