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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Are a Web-development company's charges for domain registration, host site maintenance, Web page design, and interactive games -- and its own purchases from programmers -- subject to New York sales and use tax?
No -- none of the Web-development company's charges to its clients (domain and InterNIC registration, passed-through host site maintenance, Web page design, or custom interactive games) are subject to…
Does a car importer owe sales or use tax on vehicles used in a free, six-month test-drive program before they're sold?
XYZ can import and register the vehicles tax-free for resale, but once it lets outside "evaluators" and its own employees drive them under the test-drive program, the vehicles become taxable "mixed-us…
Are a disaster-recovery service's monthly subscription fees and usage fees subject to New York sales tax?
It's split -- Petitioner's monthly subscription fee, which merely grants customers a contingent right to access backup computer equipment if a disaster ever strikes, is a nontaxable sale of an intangi…
When must an equipment finance company remit sales or use tax on its healthcare-equipment fair market value leases versus its conditional sales agreements?
It depends on which type of transaction it is -- under a genuine fair market value (true) lease, DVI must collect sales tax on each monthly rental payment as it's received, but under a conditional sal…
Are a software vendor's "system utility" data-entry and EDI products taxable as prewritten software, even though each customer's installation must be uniquely programmed to work?
Taxable -- Petitioner's KEY/MASTER and Trading Partner software products are "prewritten computer software" (and therefore taxable tangible personal property) regardless of how heavily each installati…
Is an internet lead-generation company's sale of custom prospect reports to its clients subject to New York sales tax?
No -- "X"'s custom monthly reports of website-generated sales leads, delivered electronically or by mail to each client and billed per lead, aren't subject to sales tax, because each report is persona…
Are a medical cost-containment company's case management, utilization review, bill audit, and other services subject to New York sales tax?
Mostly not taxable -- Petitioner's client's field/telephonic case management, first-report filing, utilization management, independent medical exams, peer reviews, hospital bill audits, and Social Sec…
Are a product-testing lab's testing fees, sales of test-swatches, and lab equipment purchases subject to New York sales tax?
It's split by category -- Petitioner's product-testing fees and confidential result reports aren't subject to sales tax at all, but its sales of dust-sebum swatches, soiled fabric, and testing soils t…
Does a Florida training company create New York nexus by sending independent contractors to run free in-state workshops, requiring it to collect use tax on its mail-order home-study program sales to New York students?
Yes -- a Florida-based factoring-training company that hires independent contractors to conduct regular free informational workshops in New York (aimed at enrolling students and promoting its programs…
Does a New Jersey document-storage company owe New York tax on its various service charges (storage, retrieval, filing, faxing, photocopying) to New York customers?
A New Jersey document-storage company's storage, retrieval, filing, disposal, and similar labor services -- all physically performed in New Jersey -- are not subject to New York sales or use tax even …
How does New York sales and use tax apply to a kitchen cabinet and countertop manufacturer that sells its products both installed and uninstalled?
It depends on whether the sale is installed or uninstalled -- a kitchen cabinet and countertop manufacturer must collect sales tax when selling cabinets uninstalled, but when it installs cabinets or c…
Is a bank's purchase of office furniture and equipment from the FDIC, acting as receiver for a failed savings bank, exempt from New York sales and use tax as a purchase from a federal agency?
No -- a bank's purchase of office furniture, equipment, and other tangible personal property from the FDIC, acting as receiver for a failed savings bank, is not exempt from New York sales and compensa…
Is a manufacturer's purchase of source artwork (paintings, antique fabric swatches, or similar images) used to design a computer-generated textile pattern exempt from New York sales and use tax as production equipment?
Yes -- an upholstery fabric manufacturer's purchase of source "artwork" (a painting, antique fabric swatch, carved molding, or polished stone slab) that is scanned and used to design the computer-gene…
Does a wholly owned aircraft-transportation subsidiary that flies employees and customers of related companies for a cost-based fee qualify for New York's commercial aircraft sales tax exemption?
Yes, conditionally -- a wholly owned subsidiary whose sole activity is flying employees, customers, and potential customers of its related companies for a cost-based fee qualifies for New York's comme…
Does an aircraft leased to a commuter air-charter operator qualify as an exempt "commercial aircraft" under New York sales tax law, even though the lessor also uses it for its own company business?
Yes -- an aircraft the owner leases to a commuter air-charter operator qualifies as an exempt "commercial aircraft" under Tax Law § 1115(a)(21), exempting the lease payments and related maintenance/re…
New York Advisory Opinion TSB-A-96(36)S: When Viacom finances office build-outs, equipment, and maintenance contracts through the New York City Industrial Development Agency's bond program to stay headquartered in the city, are those purchases, the resulting lease (debt-service) payments, intercompany reimbursements, the $1 buyout option, and an early-removal penalty all exempt from sales and use tax?
Yes, with one open factual question and one hard carve-out. Because title to the improvements and equipment runs through the New York City Industrial Development Agency (IDA) under General Municipal L…
New York Advisory Opinion TSB-A-96(35)S: When a group of securities-clearing companies finances new equipment through the New York City Industrial Development Agency's bond program, are the equipment purchases/leases, the companies' lease payments to the IDA, the $1 buyout price, and the early-removal penalty all exempt from New York sales and use tax?
Yes to all four -- as long as the IDA stays the on-paper purchaser, lessor, or lessee. Because title to the equipment runs through the New York City Industrial Development Agency (IDA) under General M…
Is a stock purchase followed by a corporate merger, where the acquired company's tangible personal property ends up owned by the acquirer, subject to New York State and local sales or use tax?
No -- buying 100% of a company's stock is buying an intangible (stock), not the company's tangible personal property, and the follow-on merger of the acquired company into the acquirer, done solely in…
Is a monthly fee paid for an out-of-state computer disaster recovery/backup facility subject to New York sales or use tax, when the backup equipment never comes to New York and no repair work is performed here?
No -- New York sales tax is a 'destination tax' keyed to where delivery or possession actually happens, and since the backup computer facility is located in Philadelphia (with no equipment delivered t…
Is a sale-leaseback transaction, structured as a financing arrangement even though it's booked as a sale for financial-accounting purposes, subject to New York sales or use tax on the 'sale' and 'lease' payments?
No -- applying the traditional multi-factor test for whether a 'lease' is really a security device, the customer keeps effective ownership (risk of loss, insurance proceeds, maintenance duty, upside/d…
Does machinery and equipment used to remediate groundwater already contaminated by decades-old waste disposal qualify for the manufacturing waste-treatment exemption from sales and use tax?
No -- the waste-treatment exemption only covers equipment that treats waste materials AS PART OF an ongoing manufacturing process to prevent pollution in the first place; equipment built to pump and p…
Does a tax-exempt public benefit corporation's blanket sales-tax exemption extend to purchases made by the private contractor it hires to operate and maintain its facility?
No -- the agency's own broad tax exemption applies only when the agency itself is the actual purchaser and payor of record, not to purchases its private operating contractor makes in its own name; the…
Is a toxic-waste cleanup company's cleanup service taxable, and are the supplies (absorbents, drums, protective gear) it uses during a cleanup subject to sales tax?
Yes, the cleanup service itself is taxable as processing/real-property-maintenance work -- and the company's own equipment (booms, vacuums, earth movers) and protective gear (uniforms, protective item…
Are a Morgan Stanley financing affiliate's purchases, leases, and maintenance contracts for a New York City office building -- entered as the disclosed agent of the New York City Industrial Development Agency (IDA) -- exempt from sales and use tax?
Yes, generally -- purchases, leases, and maintenance/repair/service contracts entered by the financing affiliate as the IDA's disclosed agent are exempt from sales and use tax, and so are the lease pa…
Is a toxic-waste cleanup company's service taxable, and are the equipment and supplies it uses during a cleanup subject to sales tax?
Yes -- the cleanup service itself is taxable as processing and real-property-maintenance work, and the company's own cleanup equipment (booms, vacuums, earth-moving machinery) and protective gear/disp…
Is a research firm's government-funded pilot plant, built to test a new pollution-control process at a power station, exempt from sales and use tax as research equipment, government property, production machinery, or a capital improvement?
Partly. Tangible personal property bought for use directly and predominantly in the experimental/laboratory research is exempt. Property that becomes part of a permanent capital improvement (the shelt…
Are an insurance group's affiliated companies' equipment purchases and leases, made as an agent of a city industrial development agency (IDA) under a bond-financing job-retention deal, exempt from sales and use tax?
Yes, generally -- purchases and leases made as the IDA's disclosed agent are exempt from sales and use tax as long as the IDA genuinely owns the property, and exempt maintenance/repair covers only equ…
In a bond-financed sale-leaseback structure with a city industrial development agency (IDA), are a corporate tenant's affiliate's purchases, leases, and maintenance contracts -- made as the IDA's disclosed agent -- exempt from state and local sales and use tax?
Yes, generally -- purchases, leases, and maintenance/repair/service contracts entered as the IDA's disclosed agent are exempt from sales and use tax as long as the IDA is the true owner/lessor/lessee …
In a New York City Industrial Development Agency (IDA) sale-leaseback financing arrangement, are a company's affiliated 'Group Agents' purchases, lease payments, and buyout payments to the IDA exempt from sales and use tax, no matter which affiliate actually pays the vendor or how bond proceeds are routed?
Yes, generally -- purchases and leases made by any affiliated Group Agent acting as the IDA's disclosed agent, and inter-affiliate cost allocations and reimbursements, are exempt from sales and use ta…
Before September 1, 1991, did a software marketer owe use tax on the base bank-software it bought from its parent to customize and sub-license to end users?
Yes, on its own purchases. Under the pre-September-1991 rule, the base software the marketer bought before tailoring it to any customer was taxable tangible personal property, so its payments to the d…
Must a national fraternity's parent organization collect sales tax when it sells pins, cards, and supplies to its chapters and members?
Yes. When the parent organization sells items like ID cards, pins, and supplies to chapters or members, those are retail sales — it buys them tax-free for resale but must collect sales tax on the sale…
Does a veterinary clinic collect sales tax on pet food and pet supplies, and what about grooming — given the special veterinarian tax rules?
A veterinarian pays sales tax when it buys pet food, supplies, and medicine, and does not collect tax when it resells those animal-care items to customers. But grooming is a taxable service, so the cl…
How is use tax computed on custom cabinets a manufacturer builds and installs, and does its production machinery qualify for the manufacturer's exemption?
Because the cabinets are custom-built to each job's specifications, they are not 'items of the same kind' as any catalog or inventory product, so the maker's use tax on cabinets it installs is compute…
Does a builder owe sales tax on factory manufactured homes it buys, and does it matter who hires and pays the crane crew that sets the home on the foundation?
It depends on who arranged the installation. An uninstalled factory manufactured home is taxable tangible personal property, but a home sold with installation as a component of the sale (a capital imp…
Must an out-of-state seller that also has New York stores collect NY sales tax on goods it ships by common carrier from out-of-state warehouses to New York customers?
Yes. A company that maintains offices and retail stores in New York must collect New York State and local sales and use tax on merchandise it sells and ships to New York customers by common carrier fr…
Are the materials a contractor pours into a farm bunker silo's floor and walls exempt from New York sales and use tax as farm-silo property?
Mostly exempt, with one taxable slice. Materials a contractor incorporates into a farm bunker silo used to make and store silage are exempt from New York sales and use tax under Tax Law § 1115(a)(6) b…
Is a leased CAD/CAM system exempt from New York tax when it's used partly for research and development and partly for product design and manufacturing?
It's mixed, use by use. A manufacturer's leased CAD/CAM system qualifies for exemption only where it meets the 'direct and predominant' tests. Under the research-and-development exemption (Tax Law § 1…
When a cabinet maker installs its own cabinets in custom-kitchen jobs, are those cabinets 'items of the same kind' it sells, so use tax is based on its selling price?
They are items of the same kind. Triangle Pacific manufactures kitchen-cabinet boxes and sells them to stores and contractors, and also installs them in custom kitchens. The Department held the cabine…
Which of a telecom carrier's transmission assets qualify for New York's central-office-equipment sales-tax exemption?
Only the equipment that directly and predominantly (more than 50%) switches, initiates, or receives telephone communication at its destination qualifies. For MCI and the related carriers, assets that …
Is equipment installed at an IDA-financed facility exempt from sales/use tax when purchased as the IDA's agent with title passing to the IDA?
Exempt — but only if two conditions hold. American Linen installed a Memtek wastewater treatment system as replacement equipment at a Buffalo plant financed under a 1978 industrial revenue bond lease …
Is a fireworks-display contract taxable, and is selling fireworks outright to an exempt organization that runs its own display taxable?
It depends on which of two arrangements is used. (1) When Auburn Fireworks contracts to PUT ON a fireworks display — providing the pyrotechnics, crew, and insurance — the customer never takes title or…
Does a nonresident company owe New York sales or use tax on an aircraft delivered out of state but then hangared and maintained in New York?
No New York sales or use tax is due. Arepo Corporation, a Delaware holding company with no New York office, employees, or business, took title and possession of two Gulfstream jets in Delaware, then h…
How does New York sales tax and the passenger-car-rental tax apply to a rental company's rental charges, incidental fees, insurance, fuel, promotions, and fleet purchases?
In a 25-question opinion for Alamo Rent A Car, the Department confirmed that renting a car is a taxable sale of tangible personal property (Tax Law §§ 1101(b)(5), 1105) and also carries the special 5%…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Revlon, Inc. buys taxable information-service reports (research and marketing) delivered to its offices across the U.S…
Are materials and rented tools a tenant's contractors use to build out leased space at 7 World Trade Center exempt from New York sales and use tax?
Partly. Insurance Services Office, Inc. leased space at 7 World Trade Center and asked whether its contractors' purchases were exempt. Because legal title to the building's construction, improvements …
For gas producers, are meter-maintenance and meter-installation fees taxable, and are chart-integration services (personalized well analyses) taxable?
The meters qualify for the production exemption, and the well reports are a nontaxable personal information service. The Independent Oil & Gas Association of New York asked about three charges its mem…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Pfizer, Inc. buys taxable information-service reports (professional research and marketing advice) delivered to its of…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Bristol-Myers Squibb Company buys taxable information-service reports (professional research and marketing advice) del…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Kraft General Foods, Inc. buys taxable information-service reports (professional research and marketing advice) delive…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. American Home Products Corporation buys taxable information-service reports (professional research and marketing advic…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. American Home Food Products, Inc. buys taxable information-service reports (professional research and marketing advice…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Colgate-Palmolive Company buys taxable information-service reports (professional research and marketing advice) delive…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Sterling Drug, Inc. buys taxable information-service reports (professional research and marketing advice) delivered to…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Conopco, Inc. buys taxable information-service reports (professional research and marketing advice) delivered to its o…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Carter-Wallace, Inc. buys taxable information-service reports (professional research and marketing advice) delivered t…
Does an advertising agency charge sales tax on its coupon-booklet fees, and does it pay tax on the printing, mailing, and materials it buys?
The agency's fees to clients are a nontaxable advertising service, but the agency owes tax on the materials and services it buys, plus use tax on distributing the booklets in New York. Richard Martin …
Are an ad agency's color separations taxable when sent to an out-of-state printer, and does the client owe use tax on catalogues distributed in New York?
The color separations are not taxable when delivered out of state, but the client owes New York use tax on catalogues it distributes in New York. Morten L. Coren, P.C. asked about a New York client wh…
May a car distributor pay use tax on resale-inventory vehicles that officers and employees also drive using the 2%-per-month depreciation method, and are showroom demonstrators a taxable use?
Yes to the depreciation method, and showroom demonstrators are not taxed. BMW of North America, Inc. — the sole U.S. importer-wholesaler of BMWs — keeps cars in inventory for resale to dealers but let…
Is a cooperative direct-mail advertising program a nontaxable advertising service or a taxable sale of property, and who owes use tax on the mailed materials?
The fees are a nontaxable advertising service, but the agency owes use tax on the materials it distributes in New York. A law firm asked, for its client ('Company'), about a cooperative direct-mail pr…
Are soldiers who live off-post in federally leased Section 801 military housing treated as residing on a military base, or as New York residents whose vehicle purchases are taxable?
They are treated as New York residents, so their vehicle purchases are taxable. The Staff Judge Advocate at Fort Drum asked whether soldiers living off-post in federally leased 'Section 801' family ho…
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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.