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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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I am a resident of Dubai, UAE. A NYSE registered dealer is

Resolved Question:

I am a resident of Dubai, UAE. A NYSE registered dealer is arranging sale of some of my shares shares. He is asking for up front payment for NYS tax of 8.875% on the deal from me.

Is this the normal procedure / rate? He states I can apply for rebate later as I am non resident. However I am concerned about my up front payment.

Chris Cuff
[email protected]
Submitted: 5 years ago.
Category: Tax
Expert:  Robin D. replied 5 years ago.

Robin D :

Hello and thank you for using Just Answer.

Robin D :

The tax is generally withheld (NRA withholding) from the payment made to the foreign person.
The following amounts are not subject to NRA withholding.

  • Portfolio interest on bearer obligations or foreign-targeted registered obligations if those obligations meet certain requirements.

  • Interest on deposits - bank deposit interest that is not effectively connected with the conduct of a U.S. trade or business.

  • Original issue discount on obligations payable 183 days or less from the date of original issue (Refer to Short Term Original Issue Discount (OID) Interest).

  • Original issue discount paid on the sale of an obligation other than a redemption (Refer to Original Issue Discount (OID) Interest).

  • Amounts paid as part of the purchase price of an obligation sold between interest payment dates (Refer to Sales of Bonds Between Interest Dates).

  • Nonbusiness gambling income of a nonresident alien playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States (Refer to Gambling winnings).

  • Insurance premiums paid on a contract issued by a foreign insurer.

    Generally New York State follows the federal rules on withholding requirements.

Robin D :

If your only U.S. business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U.S. resident broker or other agent, you are NOT engaged in a trade or business in the United States. When a foreign person engages in a trade or business in the United States, all income from sources within the United States connected with the conduct of that trade or business is considered to be Effectively Connected Income (ECI). This applies whether or not there is any connection between the income, and the trade or business being carried on in the United States, during the tax year.


I am worried/suspiscious that I am being asked to pay the tax before conclusion/receipt of the monies from the sale of my shares and wonder why the tax cannot be witheld from the monies I will receive as you state is the general case. On what grounds can the dealer insist I pay in advance. (IMPORTANT NOTE:- The registered dealer, who is part of a Canadian company, PanAm Advisory based in Vancoever, approached me in the first instance saying he had a buyer willing to pay above the market price)

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