Can a store discard its detailed cash register tapes and keep only daily sales summaries?

Plain-English summary

Daniel Goldberg, C.P.A., asked on behalf of a client that makes only taxable sales whether dated daily summaries of each day's receipts could substitute for the complete cash register tapes. The client lacks storage space and wants to discard the tapes except for a yearly "test period" designated by the Tax Department.

The Department said no — the detailed tapes must be kept.

• Records are required by statute. Tax Law § 1135 requires every person collecting tax to keep records of every sale and all amounts paid, charged or due, in the form the Tax Commission prescribes.
• What "records" means. Under 20 NYCRR 533.2(b), the sales records must contain a true copy of each sales slip, invoice, receipt, guest check, and cash register tape and any other original sales document. The records must give enough detail to independently determine each sale's taxable status and the tax due, or be substantiated by analysis of supporting records. Cash register tapes that identify each item, its price and the tax are sufficient for that purpose.
• Insufficient records invite an estimate. If records are incorrect or insufficient — including because they aren't maintained as required — the Tax Commission may deem the return incorrect and determine the tax using any available information (§ 533.2(g)).
• Only guest checks get early-destruction relief. The regulation allowing early destruction with permission (§ 533.2(a)(4)) applies only to guest checks, not cash register receipts. No provision authorizes early destruction of cash register receipts.
• Result. Daily summaries without the supporting cash register tapes are not proper and adequate records (see P. Hackett Hardware, TSB-A-82(25)S; TSB-M-81(9)S). The client must retain the cash register tapes and all records relating to its returns for the three-year limitations period (§ 1147(b)).

What this means for you

Summaries don't replace source records. New York wants the underlying detail — the actual cash register tapes — not just a daily total. A summary can't independently prove each sale's taxable status, so it isn't enough on its own.

Keep register tapes for three years. Retain the tapes and related records for the full three-year assessment period (longer if a period stays open). Running low on storage is not a basis to discard them early.

Guest checks are the only exception — and only with permission. The early-destruction rule is specific to guest checks and requires the Audit Bureau's approval. It does not extend to cash register receipts.

Thin records shift the risk to you. If your records are insufficient, the Department can estimate your tax from whatever information it can find. Complete tapes protect you on audit.

Common questions

Q: Can I keep daily sales summaries and toss the register tapes?
A: No. Daily summaries without the supporting cash register tapes are not proper records. You must keep the tapes themselves.

Q: How long must I keep the tapes?
A: For the three-year limitations period under § 1147(b), and longer if the period is open or extended, or if the records are material to a pending proceeding.

Q: Guest checks can be destroyed early with permission — doesn't that cover register tapes?
A: No. That relief (§ 533.2(a)(4)) applies only to guest checks. No provision allows early destruction of cash register receipts.

Q: What happens if my records are inadequate on audit?
A: The Tax Commission may deem your return incorrect and determine the tax due using any information available, at your place of business or elsewhere.

Citations and references

Statute:

• Tax Law § 1135 — requires vendors to keep records of every sale and amounts charged and due
• Tax Law § 1147(b) — three-year period of limitation for determining and assessing additional tax

Regulation:

• 20 NYCRR 533.2(b) — sales records must include cash register tapes and enough detail to determine each sale's taxable status and tax due
• 20 NYCRR 533.2(a)(2),(3) — records must be presented on audit and preserved for at least three years
• 20 NYCRR 533.2(a)(4) — early destruction with permission applies only to guest checks, not cash register receipts
• 20 NYCRR 533.2(g) — incorrect or insufficient records allow the Tax Commission to estimate the tax

Prior guidance cited:

• P. Hackett Hardware Company, Inc., TSB-A-82(25)S; TSB-M-81(9)S — daily summaries without supporting detail are inadequate records

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1985.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a85_55s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-85(55)S
Sales Tax
November 7, 1985

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S850617B

On June 17, 1985, a Petition for Advisory Opinion was received from Daniel Goldberg,
C.P.A., 151 West 40th Street, New York, N.Y. 10018.
The issue raised is whether the Tax Law requires a vendor, who makes only taxable sales,
to retain a detailed record of transactions on cash register tapes.
Petitioner inquires on behalf of one of its clients whether, for the purpose of analyzing sales,
properly dated cash register summaries of each days receipts would be an acceptable substitute for
the complete cash register tapes. Petitioner's client lacks storage space and would like to discard all
cash register tapes except for a test period, to be designated by the Tax Department, within each
calendar year.
Section 1135 of the Tax Law sets forth the record-keeping requirements applicable to
vendors under the sales tax, in relevant part, as follows:
Every person required to collect tax shall keep records of every sale... and of all
amounts paid, charged or due thereon, in such form as the tax commission may by
regulation require...
Section 533.2(b) of the Sales and Use Tax Regulations reads, in part as follows:
(b) Sales records. (1) ... The records must contain a true copy of each:
(i) sales slip, invoice, receipt, contract, statement or other memorandum of sale;
(ii) guest check, hotel check, receipt from admissions such as ticket stubs, receipts from
dues; and
(iii) cash register tape and any other original sales document.
(2) The sales record either must provide sufficient detail to independently determine the
taxable status of each sale and the amount of tax due and collected thereon or may be substantiated
by analysis of supporting records.
(i) Cash register tapes which identify the individual items sold, selling price and the tax due
are sufficient to independently determine the taxable status of each sale and the amount of tax due
thereon. (20 NYCRR 533.2(b); Emphasis added)

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

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TSB-A-85(55)S
Sales Tax
November 7, 1985

Section 533.2(a) of the Sales and Use Tax Regulations further provides, in part:
(2) Upon audit by the department, or at such other times as the department requests, the
vendor or user must present all the records described in this Part, kept in a manner suitable to
determine the correct amount of tax due. . . .
(3) All records required to be kept by this Part shall be preserved for a period of three years
from the due date of the return to which they relate or the date of filing, if later, . . . and longer than
three years if their contents are material to any period open or extended pursuant to statute, or in any
action or proceeding pending before the Tax Commission or in a judicial proceeding or action." (20
NYCRR 533.2(a)(2) and (3); Emphasis added).
Section 533.2(g) of the Sales and Use Tax Regulations provides, in part:
(g) Incorrect or insufficient records. (1) If the records of a taxpayer are determined to be
incorrect or insufficient, the return filed on the basis of information obtained from such records may
be deemed to be incorrect or insufficient. The Tax Commission may then determine the amount of
tax due the State by using any information available, whether at the taxpayer's place of business or
from any other source.
(2) The records of a taxpayer may be deemed to be incorrect or insufficient if:
(i) the records are not maintained in accordance with the provisions of this section;" . . . . (20
NYCRR 533.2(g)).
Section 533.2(a)(4) of the Sales and Use Tax Regulation provides:
(4) Guest checks must be retained for at least three years, unless an application is filed with
the District Office Audit Bureau and permission is granted by the bureau to destroy the guest checks
before the expiration of the three-year statute of limitation. (20 NYCRR 533.2(a)(4)).
The provisions of regulation section 533.2(a)(4) are applicable only to guest checks and are
not applicable to cash register receipts. At this time, no provisions of the regulations authorizes the
early destruction of cash register receipts.
In accordance with the foregoing, daily summaries of sales without the supporting detailed
transactions recorded on the cash register tapes would not constitute proper and adequate records.
(See also: P. Hackett Hardware Company, Inc., Advisory Opinion, August 5, 1982, TSB-A-82(25)S
and Technical Services Bureau Memorandum, July 15, 1981, TSB-M-81(9)S).

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TSB-A-85(55)S
Sales Tax
November 7, 1985

It is therefore essential for Petitioner's client to retain the cash register tapes, and all other
records relating to returns filed, for the statutory three year period of limitation (Tax Law 1147[b])
for determination and assessment of additional tax.

DATED: September 10, 1985

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth herein.