New York State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in New York, with full citations and the original source on every page.
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For a hazardous-waste treatment company, what's taxable — its equipment purchases, its charges to customers, and the disposal services it buys?
Equipment taxable; customer charges taxable; resold off-site disposal not taxable. BDT runs a hazardous-waste treatment facility (incineration and hydrolysis); nothing is reclaimed. (1) Its purchases …
For a biotech company, which equipment, utilities, and services are exempt as research-and-development versus production — and does the exemption reach New York City?
R&D exemptions reach New York City; production exemptions don't. Enzo Biochem does laboratory research and manufactures DNA-based diagnostic probe kits, and asked how the research-and-development and …
Does a company's mobile filter press that refines industrial wastewater qualify for New York's manufacturing-machinery exemption?
No — it doesn't qualify. Central New York Industrial Services runs mobile filter presses (pumps, compressors, screens) that refine clients' liquid industrial waste on-site; the filtered water is pumpe…
Which of an advertising agency's services and sales are taxable in New York, and how does a principal-agent agreement change the result?
It depends on what the agency is really selling: pure advertising services are exempt, but selling tangible property is taxable — and a valid principal-agent agreement shifts who owes the tax. In a de…
Is a CAD/CAM computer used to design custom manufactured products exempt as production machinery?
Mostly no — designing isn't 'production,' so the CAD/CAM computer isn't exempt production machinery, with one exception. Buffalo Forge uses its CAD/CAM system to create individualized drawings that le…
How is an advertising agency's work taxed in New York — its services, the property it produces, and purchases it makes for clients?
It depends on the activity — advertising services are exempt, but selling finished property is taxable, and buying tax-free as a client's agent requires a strict test. Advantage Concepts, an advertisi…
Are welding supplies used to maintain production machinery exempt, and do voltage transformers count as exempt production equipment?
Welding supplies used to maintain production equipment qualify for the § 1105-B reduced (0% after March 1, 1981) state rate, but the transformers do not get the production exemption. Gernatt Asphalt P…
Is a central coolant and chip-handling system for metal-cutting machines exempt production equipment, and how is its foundation and installation labor taxed?
The coolant/chip handling system itself is exempt production equipment, but its foundation materials are taxable and its assembly and installation labor fall under the § 1105-B reduced (0% after March…
Is a machine that recycles foundry sand for reuse in manufacturing exempt as production equipment?
The sand reclamation unit is not exempt as production machinery under § 1115(a)(12), but it qualifies for the § 1105-B statewide exemption if purchased on or after March 1, 1981. Buffalo Forge Company…
Do the food and supplies a company buys to raise dogs and ferrets for sale qualify for New York's manufacturing or production exemptions from sales tax?
No — the food and supplies are taxable. Marshall Research Animals raises beagles and ferrets in closed breeding colonies and sells them, and it wanted its feed and similar supplies exempt under the pr…
Is equipment a gravel plant rents from a related corporation to assemble the plant exempt as production machinery, and is the related-party rental taxable?
Equipment used directly to assemble the plant may qualify for the production exemption, but the related-corporation rental is still taxable. Gernatt Asphalt, a gravel producer, rented welding and eart…
Does the production exemption cover the equipment and supplies a company uses to demolish railroad bridges and cut up the resulting scrap for sale?
No — the equipment and supplies are used predominantly for demolition, which is not production, so the production exemptions do not apply and the purchases and rentals are fully taxable. Sheldon Const…
Is natural gas used to heat a factory's production area exempt as used 'directly and exclusively' in manufacturing, if that heat is also needed for employee comfort?
No — the gas is taxable, because heat the manufacturer would need for employee comfort anyway is not used 'exclusively' in production. MOD-PAC Corp. manufactures packing cartons by cutting, folding, g…
Is the electricity a manufacturer uses to light its production facility exempt from sales tax under the production exemption?
Electricity used to light a manufacturing plant is taxable — it is not used 'directly and exclusively' in production, so it fails the § 1115(c) exemption that covers power running the production machi…
Which pieces of a computer system that produces NC control tapes for exempt factory machines qualify for New York's production-machinery exemption?
Of a five-machine computer system that produces NC control tapes, only the tape punch unit — used exclusively to punch the tapes — is exempt production machinery; the computer, disc drive, plotter, an…
Is the electricity that powers a deli's coolers exempt as used in production, when the food is both sliced for sale and made into ready-to-eat items?
A deli's cooler electricity is exempt from sales tax only for the portion used to cool food that is later sliced and sold by weight as tangible personal property — not for food used to make ready-to-e…
Is renting a trailer that only hauls a manufacturer's industrial waste to a treatment center exempt as production equipment?
Renting a trailer used only to transport a manufacturer's industrial waste to pollution-control centers is taxable — the trailer is not machinery or equipment used directly and predominantly in produc…
Are an oil producer's subcontracted well-pulling repair service, its bulldozers and snowmobiles, and the diesel fuel for those vehicles subject to New York sales or use tax?
An oil producer's subcontracted well-pulling work is a taxable repair service (though the State portion was later exempted for production equipment), and its bulldozers, snowmobiles and the diesel fue…
Are an oil producer's subcontracted well-pulling repair service, its bulldozers and snowmobiles, and the diesel fuel for those vehicles subject to New York sales or use tax?
An oil producer's subcontracted well-pulling work is a taxable repair service (though the State portion was later exempted for production equipment), and its bulldozers, snowmobiles and the diesel fue…
Are an oil producer's subcontracted well-pulling repair service, its bulldozers and snowmobiles, and the diesel fuel for those vehicles subject to New York sales or use tax?
An oil producer's subcontracted well-pulling work is a taxable repair service (though the State portion was later exempted for production equipment), and its bulldozers, snowmobiles and the diesel fue…
Are a gas driller's site-prep and well-service vehicles taxable, and does use tax apply to a copy machine bought in Louisiana and moved to New York?
A gas driller's four-wheel-drive site-preparation vehicles and its equipment-carrying pickup trucks were taxable before an August 26, 1981 law change and exempt after, and a copy machine bought in Lou…
Is the electricity that powers a frozen-drink (Slurpee) machine in a convenience store exempt as electricity used to produce goods for sale?
The electricity that powers a convenience store's frozen-drink (Slurpee) machine is not exempt as production electricity, so it is taxable. The machine makes a carbonated frozen drink, and the sale of…
Is the electricity that powers a mixer/cuber that makes a carbonated drink in a store exempt as electricity used to produce goods for sale?
The electricity that powers a store's mixer/cuber — a machine that combines syrup, carbon dioxide and water into a carbonated beverage sold in a cup — is not exempt as production electricity, so it is…
Is the electricity that powers an ice-maker serving a store's carbonated-drink machine exempt as production electricity?
The electricity that powers an ice-maker in a 7-Eleven store is not exempt as production electricity, so it is taxable. The ice cubes cool a mixer/cuber that makes a carbonated soft drink (and some ic…
Does a steel warehouse that cuts, shapes, drills and bends stock to order 'process' goods so its machinery qualifies for the production exemption?
A steel warehouse that cuts, shapes, drills, threads and bends stock steel to its customers' specifications is engaged in 'processing,' so the machinery and equipment it uses predominantly in that wor…
In a manufacturer's audit: are cleaning tools and supplies exempt, are tenant HQ alterations capital improvements, does 'tax included' billing count, and can tax be refunded on property used out of state?
This four-part audit opinion holds: (1) naphtha, alcohol and wipers used to clean leather in manufacturing are 'tools' and 'supplies,' not exempt 'machinery or equipment' under § 1115(a)(12) — but und…
For a publicity-booklet producer: which production inputs are exempt, are out-of-state deliveries taxed, is a clipping service resale, and when are charges to charities exempt?
For a company that produces publicity booklets and sends them to newspaper editors, this opinion resolves four issues. (1) Because it manufactures booklets for sale, its production inputs — artwork, s…
Is natural gas used to control a furniture plant's humidity and temperature exempt as used 'directly and exclusively' in production, when the heat also keeps employees comfortable?
Natural gas a furniture maker uses to control plant humidity and temperature is used 'directly' in production, but only the portion used exclusively for production is exempt — so gas that also serves …
Can a gas supplier buy cryogenic converters tax-free as production equipment when its customers, not the supplier, use them to make products for sale?
A gas supplier can buy cryogenic converters without paying sales tax when the converters are bought solely to be used, by the supplier's customers, directly and predominantly in producing tangible per…
Are 'ad slicks' a retailer buys to send to newspapers exempt from sales tax as production machinery and equipment?
Yes, they qualify for the production exemption — except for New York City tax. Ad slicks a retailer buys and then mails to newspapers to print its advertisements are exempt from sales and use tax unde…
Is a machine that makes tailpipes exempt production equipment when the tailpipes are installed in customers' cars rather than sold separately?
No — the machine is taxable. A service station's machine that bends and shapes pipe into tailpipes does not qualify for the § 1115(a)(12) production exemption, because its output is not produced 'for …
Must a printer collect sales tax when it separately bills its customers for typesetting and plates that become the customer's property after a printing job?
Yes — the printer must collect tax on the typesetting and plates. When the typesetting and plates become the customer's property, the printer has made a retail sale of tangible personal property under…
Can a precast-concrete maker that sells more than half its product already installed claim New York's production exemptions on its machinery and its fuel?
The machinery exemption is denied, and only part of the fuel qualifies. Midstate Precast Systems makes precast concrete 'wideslab.' Because more than 50% of its wideslab is sold on an installed basis,…
Are a record company's master sound tapes, used to make records and cassettes for sale, exempt production machinery — and does the New York City tax still apply?
Exempt from the State (and non-NYC local) tax, but not the New York City tax. Polydor, Inc., a major record company, asked whether its purchases of master sound tapes (useful life over one year) from …
How is New York sales tax handled on films leased to TV networks — where delivery controls tax, whether split in/out-of-state broadcasts reduce the base, and which production purchases are exempt?
Leasing films is a taxable sale keyed to where the film is delivered, and the full lease price is taxable even when the broadcast reaches viewers outside New York. A lease is a 'sale' (§ 1101(b)(5)), …
How do New York's production exemptions and the resale exclusion apply to a maker of lithographic plates and printer supplies — and when does the New York City tax still apply?
Mostly exempt — with a New York City carve-out and item-by-item rules. Polychrome Corporation makes lithographic plates and film and a range of printer supplies. The Department applied New York's prod…
How did New York's production exemptions apply, over time, to a New York City manufacturer's purchases of tools, supplies and welding gases — and did the city tax still apply?
State-exempt (phased in), but always subject to the New York City tax. World Display Fixtures, a New York City manufacturer of store display fixtures, asked how tax applies to its tools, supplies and …
Is a manufacturer's computer system exempt from New York sales tax under the production-machinery exemption when it is used mostly to track and route product through the plant?
No — the computer is taxable. Spence Engineering Co., a maker of automatic temperature and pressure regulating valves, bought a computer system it said would be used about 60% to route product through…
Is a fast-food restaurant a 'manufacturer' entitled to the production exemption on the utilities and equipment it uses to prepare food?
No — preparing restaurant food isn't manufacturing, so most of the utilities and equipment are taxable, but bulk ice cream is a carve-out. Tri City Desserts runs a fast-food operation: it makes soft-s…
Are a foundry's machines that make its own sand molds and cores — and the energy to run them — exempt from New York sales tax as production equipment?
Yes — the mold-making machines and their energy are exempt (except in New York City). Frazer & Jones Co. manufactures mine roof (expansion) supports by pouring molten metal into sand molds, and makes …
Which of a photographer's purchases and charges — film, chemicals, equipment, printing, framing, sitting fees — are subject to New York sales tax?
It splits by activity: printing is taxable production, but production equipment can be exempt and the materials resold with the photos can be bought for resale. Victor LaSala, a photographer and photo…
Is a manufacturer's chip-filtration and cooling system exempt from New York sales tax as production equipment?
Yes — the filter system is exempt production equipment. Cummins Engine Co. manufactures diesel engines and uses a central filtration and cooling system with its machining equipment. The Department hel…
Can a soft ice cream stand claim the production exemption on the electricity used to make and store its ice cream?
Mostly no — electricity for cones, sundaes and shakes is taxable; only the power used to make bulk ice cream qualifies. A soft ice cream stand (through its CPA, Herman H. Gerstman) asked whether elect…
Is sales tax due on the artwork, printing and mailing services for a free company magazine, and does it matter whether copies are mailed by the printer or distributed by the company itself?
Yes, it's taxable — but the tax follows where the copies go. Carrier Corporation asked how sales tax applies to the art, printing and distribution services for 'Carrier World,' a magazine it planned t…
Does laboratory testing and quality-control equipment used during steel production qualify for New York's manufacturing exemption, even if it sits in off-line labs?
Yes — the testing equipment qualifies for the production exemption. Al Tech Specialty Steel Corporation uses laboratory equipment at its two plants, more than 50% of the time, to chemically analyze mo…
Can a monument and memorial maker buy its tools, parts and supplies tax-exempt under the manufacturing exemption, and does it matter whether it also installs the monuments?
It depends on what the monument builder mainly does. The New York State Monument Builders Association asked whether the parts, tools, equipment and supplies used to produce monuments and memorials are…
Are the replacement parts for a ready-mix concrete mixing unit exempt from sales tax, and is the rental of trucks hired to deliver the concrete taxable?
Partly — the mixing unit is exempt, but the truck under it isn't. Gilford Construction Corporation makes ready-mix concrete in mixing units mounted on truck chassis and asked about (1) replacement par…
How does New York's compensating use tax apply to the equipment, supplies, component materials and packaging a rubber printing-plate manufacturer uses?
Mostly exempt — only the billing invoices are taxable. Colby Engraving and Rubber Plate Corp. makes rubber printing plates to customer specifications and asked how the compensating (use) tax applies t…
Can a keypunch service rent its keypunch machines and buy its keypunch cards without paying sales tax, when the finished cards are delivered to customers?
Yes to both — the machines and the cards can be obtained tax-free. Benjamin Swartz runs a keypunch service that predominantly uses keypunch machines to produce keypunched cards, which it delivers to i…
Is a chemical-waste disposal company's service taxable, are its separately stated transportation charges taxable, and can it buy its equipment tax-free as production machinery?
Taxable on all three points. Cecos International removes, treats and disposes of hazardous chemical waste and calls it 'the manufacture and production of safe waste.' The Department held: (1) the serv…
Does a display maker owe sales or use tax on artwork it buys from suppliers, and does the resale exclusion or the production exemption apply?
It depends on how the artwork is used — resale is tax-free, and artwork consumed to produce a display for sale is exempt except for New York City tax. Ledan, Inc. designs and sells displays and orders…
When a motel buys soap, paper cups and bathroom tissue to place in guest rooms, can it buy them tax-free as a purchase for resale or as production materials?
Taxable — the motel must pay sales tax on these supplies. Lanz's Motel asked whether items like plastic or paper cups, bathroom tissue and guest soap that it places in rooms for guests can be bought t…
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These are official tax letter rulings and advisory opinions issued by New York's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.