What is the “PAID” Program

In the 2026-27 NYS Budget bill, the New York State legislature created the Penalty and Interest Discount (“PAID”) program. This program gives sales tax vendors with an outstanding liability the opportunity to save 50% of the interest and 100% of the penalty they owe on certain unpaid sales tax bills, provided they pay the total reduced amount owed on all PAID-eligible bills by December 31, 2026.

Benefits:

If you’re an eligible sales tax vendor, the PAID program will significantly reduce your tax debts, avoid liens and other enforcement actions, and meet the requirements of the upcoming sales tax re-registration program (described below), which begins in the summer of 2027.

Eligibility:

You may be eligible for the PAID program if your business has an active Certificate of Authority (“COA”) and unpaid sales tax bills (excluding those associated with fraud) that are subject to collection action. Eligible bills are those that no longer have formal appeal rights. If you are eligible, you do not need to take any action to enroll in the PAID program. In mid-September 2026, the NYS Tax Department will identify and notify all eligible taxpayers.

How PAID works:

If you’re eligible, you will receive a letter indicating you have bills that qualify for the PAID program. This letter will list each PAID-eligible bill and the amount you’ll save on each if you pay the total reduced PAID amount for every bill. You must electronically pay the discounted amount for all bills by December 31, 2026.

If you choose not to take advantage of the PAID program, you will remain liable for the total undiscounted sales tax balance you owe (including penalties and interest) and bills will be subject to collection action commencing January 1, 2027. The outstanding liability will continue to accrue penalty and interest at the full statutory rate.

Sales Tax Re-Registration Program

The 2026-27 NYS Budget requires that the NYS Tax Department implement a sales tax re-registration program to occur over a three-year period beginning in the summer of 2027.

The program will update the current information on a vendor’s operation, owners, and responsible persons.

Timing:

The re-registration program will occur in phases. The NYS Tax Department will notify current sales tax vendors by certified mail that their current COA will be expiring on a certain date, and they will have to re-register. This notification will be sent at least 180 days before the expiration of the vendor’s current COA. Businesses cannot re-register until they receive their letter from the NYS Tax Department.

Requirements:

Before a vendor’s application for a new COA can be approved, all fixed and final tax liabilities of any tax type must be paid in full.

All current COA holders, even those without outstanding tax liabilities, will need to go through the same re-registration process and apply for a new COA during their specific re-registration period.

Links to NYS Tax Dept. website:

Paid Program: https://www.tax.ny.gov/enforcement/paid.htm

Sales Tax Re-Registration Program: https://www.tax.ny.gov/bus/st/rereg.htm

If you have any questions or would like more information on the issues discussed in this communication, please contact Richard E. Scrimale at rscrimale@hancocklaw.com, or any member of our Corporate or Tax Departments.