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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New York Advisory Opinion TSB-A-96(21)S: If a company buys and registers vehicles as dump trucks, uses them as dump trucks, and only later modifies them (removing the dump body, adding a fifth-wheel hookup) and re-registers them as tractors, can it get a refund of the sales tax paid at purchase under the tractor/trailer exemption?
No refund. R.J. Valente Gravel purchased vehicles, registered them with the DMV as trucks, and used them as dump trucks, paying sales tax on the purchases. It later modified some of these vehicles -- …
New York Advisory Opinion TSB-A-96(20)S: Does an industrial gas company's cryogenic converter, which turns refrigerated liquid gas into gaseous form for sale to customers, qualify for the sales tax exemption for production machinery used directly and predominantly in manufacturing/processing?
Yes, exempt. Empire Airgas manufactures and sells industrial and medical gases (oxygen, argon, helium, carbon dioxide, hydrogen, nitrogen), storing them in refrigerated liquid form in bulk tanks, but …
New York Advisory Opinion TSB-A-96(19)S: On a long-term Mercedes-Benz auto lease originated by a dealer and then assigned to a leasing company, who owes the sales tax -- the dealer or the leasing company -- and is a customer's trade-in equity credited against the lease taxable?
The dealer -- not Mercedes-Benz Credit Corporation, the leasing company the lease is later assigned to -- is the "original lessor" and the one responsible for collecting and remitting New York sales t…
New York Advisory Opinion TSB-A-96(18)S: Is a hotel's purchase of a PBX telephone-switching device -- which routes incoming outside calls to the hotel's internal phone system -- exempt from sales tax as production equipment used to provide a taxable telephone service for sale?
It depends on how the hotel bills its guests for phone calls -- the exemption is available only if certain conditions are met, not automatically. Kasden Complete Services' hotels charge guests for cal…
New York Advisory Opinion TSB-A-96(17)S: In a New York City Industrial Development Agency bond financing designed to keep an insurance company headquartered in the city, are the company's equipment purchases, leasehold improvements, maintenance contracts, and lease/rent payments to the Agency exempt from New York State and City sales and use tax?
Yes, exempt -- with detailed conditions attached. To keep Equitable Life Assurance Society headquartered in New York City, the company and its subsidiary (the "Lessees") will enter a bond-financed sal…
New York Advisory Opinion TSB-A-96(11)S: When the Javits Convention Center becomes the sole employer of display and freight-handling workers and sells their labor to contractors at trade shows, is that a taxable sale of a service, and does it matter that the contractors resell the labor's output to exhibitors?
Yes, generally taxable -- the Javits Center is acting as a "temporary service contractor," and its labor sales are taxable unless the purchasing contractor provides a timely exemption certificate. The…
New York Advisory Opinion TSB-A-96(16)S: Is a monthly $25 administrative fee that an information-services company charges customers who choose to pay for their information units as-used (rather than a lump annual prepayment) subject to New York sales tax?
Taxable. Dun & Bradstreet sells credit and market information services subject to sales tax under Tax Law § 1105(c)(1), and is registered to collect and remit that tax. Historically customers paid a s…
New York Advisory Opinion TSB-A-96(15)S: Is the fee charged for membership in a discount club -- which entitles members to discounts at participating boating and waterfront businesses -- subject to New York sales tax?
Not taxable -- the membership fee is the sale of an intangible. Nautical Miles, Ltd. sells memberships, to people inside and outside New York, that entitle members to discounts at a list of participat…
New York Advisory Opinion TSB-A-96(14)S: Is a telephone answering service's markup for long-distance calls it makes to forward messages to out-of-area clients taxable as a resale of telephone service, or as part of the taxable answering-service charge -- and does it matter where the client is located?
Taxable as part of Petitioner's telephone answering service -- not a resale of long-distance service -- but only if the customer's business or residence is located in New York. Total Recall Message Ce…
New York Advisory Opinion TSB-A-96(13)S: Is a licensed process server's income from serving legal papers, filing court documents, and locating defendants through public records subject to New York's sales tax on detective services?
Not taxable. Thomas J. Brennan is a New York City-licensed process server (not a licensed private investigator) who receives summonses to serve on defendants in court actions, and files an "affidavit …
New York Advisory Opinion TSB-A-96(12)S: Are receipts from massage services performed by a licensed massage therapist -- whether as a sole practitioner, employee, or officer/stockholder of a corporation -- subject to New York State or New York City sales tax?
Not subject to New York State (or non-NYC local) sales tax, but IS subject to New York City's own local tax -- regardless of whether the practitioner is a sole practitioner or an employee/officer/stoc…
New York Advisory Opinion TSB-A-96(9)S: Is admission to a converted concert-hall venue -- where bar sales make up 78% of total receipts even though the main draw is live music -- subject to New York's "cabaret" sales tax on admission charges?
Taxable, as a "cabaret" charge -- the opposite result from the companion case where bar sales were held merely incidental. Empire Management and Productions operates a converted 1912-era concert hall …
New York Advisory Opinion TSB-A-96(10)S: Are a corporate-communications consulting firm's charges for image/communications consulting, recommending and sourcing videos/slides, creating logos, and coordinating corporate meetings subject to New York sales tax -- and does billing structure or a client's Direct Payment Permit change the answer?
It depends entirely on whether tangible personal property is transferred and whether any related charges are separately billed. Arteffects, Inc. is a graphic design and corporate communications firm (…
New York Advisory Opinion TSB-A-96(8)S: Is the removal, disposal, and decontamination of waste from tanks at an EPA Superfund cleanup site a taxable real-property maintenance service, or an exempt capital improvement, when the site's overall final remediation plan hasn't been determined yet?
Taxable, at least for now -- because the ultimate capital-improvement outcome can't yet be established. Frontier Chemical Royal Avenue Superfund Site is a group of companies designated "potentially re…
New York Advisory Opinion TSB-A-96(7)S: Does a computer-services tenant in an Economic Development Zone building qualify for the sales tax refund/credit on construction materials used to build or rehabilitate the building, even though it isn't the one buying the materials?
The building itself qualifies for the EDZ construction-materials refund, but Petitioner personally does not, unless Petitioner is the one who actually buys the materials and pays the tax. Gloria S. Fr…
New York Advisory Opinion TSB-A-96(6)S: Is electricity used to power pipeline pumping stations that transport partially refined petroleum products between a refinery and terminals -- where the products get further blended before final retail sale -- exempt production electricity under Tax Law Section 1115(c)?
Not exempt -- taxable. Atlantic Pipeline Corporation, a Sun Company subsidiary, operates a FERC-regulated interstate pipeline network partly in New York that transports petroleum products (85% gasolin…
New York Advisory Opinion TSB-A-96(5)S: Is admission to a no-seating, no-food 1,000-capacity concert hall subject to New York's "cabaret" sales tax on admission charges, given that a cash bar accounts for roughly a third of the venue's revenue?
Not taxable as a cabaret charge -- this venue passes the "merely incidental" test its sister ruling failed. "The Music Hall," a 1,000-capacity venue, will host only touring-musician concerts, with tic…
New York Advisory Opinion TSB-A-96(4)S: Are a company's "stock watch" and "NOMINEX" services -- which identify a client's beneficial stockholders and monitor changes in stock ownership -- excluded from New York sales tax as personal/individual information not incorporated into reports for other clients?
Not taxable, under the personal/individual information exclusion. Kissel-Blake, Inc. offers two services to corporate clients trying to identify their own beneficial stockholders: the "stock watch ser…
New York Advisory Opinion TSB-A-96(3)S: Is a proxy solicitation firm's confidential "stock watch service," which identifies a client's individual shareholders and debtholders through investigative research, excluded from New York sales tax as personal information not shared with other clients?
Not taxable, under the personal/individual information exclusion -- the same result as the companion Kissel-Blake ruling issued the same day. Morrow & Co., Inc. provides proxy solicitation and stockho…
New York Advisory Opinion TSB-A-96(2)S: Is the fee a business pays Pitney Bowes to have its rented "Postage by Phone" meter reset by telephone subject to New York sales tax?
Taxable. Grace Borgenicht Gallery, Inc. rents a "Postage by Phone" meter from Pitney Bowes, a system that eliminates the need to have the meter reset in person at the Post Office. Instead, Petitioner …
New York Advisory Opinion TSB-A-96(1)S: Is a therapeutic powered air mattress system for bedsore-prone patients exempt from New York sales tax as medical equipment, when sold or leased to individual patients versus to hospitals and nursing homes?
Exempt medical equipment -- but with an important carve-out for sales to medical-service providers. Pegasus Airwave Inc. makes a powered air mattress system, fitted into a standard hospital bed or a p…
New York Advisory Opinion TSB-A-95(43)S: In a 22-year NYC IDA bond financing to keep CS First Boston headquartered in the city, are the layered purchase, lease, resale-certificate, service-contract, rent, and eventual buyout transactions among Purchasing, Leasing, the Group Agents, and the IDA exempt from New York State and City sales and use tax?
Yes, exempt across all 13 questions raised -- provided every layer of the structure follows the documented agency/resale-certificate paperwork. To keep CS First Boston Corporation ("CSFB") headquarter…
New York Advisory Opinion TSB-A-95(42)S: In CS First Boston's proposed NYC IDA headquarters-retention deal -- where the building owner, Metlife, pays for and owns most leasehold improvements for regulatory-capital reasons while the IDA holds legal title -- are the purchases of Eligible Personalty, the Improvements, Metlife's reimbursements, and CS First Boston's debt-service payments exempt from sales and use tax?
Exempt, but with a genuinely fact-dependent condition on the Improvements question that this opinion couldn't resolve outright. CS First Boston Corporation ("CS First Boston") proposed a roughly 20-ye…
New York Advisory Opinion TSB-A-95(44)S: Does a boat-slip condominium association's common charges become subject to the sales tax on social/athletic club dues because the condominium includes tennis courts and a swimming pool, and must the association form a separate corporation to run those facilities?
Partly taxable -- only the portion of common charges reasonably allocable to the tennis and pool facilities counts as club dues, and no separate corporation is required. Anchorage Yacht Club Condomini…
New York Advisory Opinion TSB-A-95(41)S: Is the monthly fee a video-playback facility charges a new cable channel for accepting, playing back, and feeding its programming to a satellite uplink -- to distribute the channel nationwide -- subject to New York sales and use tax?
Not taxable. MRG Production Associates is exploring an agreement to provide videotape playback facilities and support staff for a new cable television channel's ("Corporation A") 24-hour on-air needs,…
Can a sport-fishing boat that holds a license to catch and sell some of its fish get a refund of New York's motor fuel, petroleum business, and sales taxes on its fuel as a commercial fishing vessel?
It depends on the facts — and the Department says that factual question can't be answered in an Advisory Opinion. Relief from the Article 12-A motor fuel tax, the Article 13-A petroleum business tax, …
New York Advisory Opinion TSB-A-95(39)S: Is a food service contractor's charges to a substance-abuse treatment facility -- for meals, on-site labor, supplies, nutritional analysis, and management services -- exempt as a sale for resale, or at least partly exempt as a professional fee?
No exemption either way -- the entire charge is taxable as a sale of food and drink, with no carve-out for the labor/management/nutritional-analysis portion. Ambassador Food Services Corporation suppl…
New York Advisory Opinion TSB-A-95(38)S: When a prime contractor buys trash removal from a subcontractor and then re-bills the exact cost to a federally tax-exempt customer, is the subcontractor's charge to the prime contractor taxable, and is the prime contractor's pass-through charge to the exempt customer taxable?
The subcontractor's charge to the prime contractor is taxable; the prime contractor's pass-through re-billing to the tax-exempt customer is not. Pasquale & Bowers described a repair project (not a cap…
New York Advisory Opinion TSB-A-95(37)S: When a captive auto-leasing company buys already-executed vehicle leases from unaffiliated dealerships (via automatic assignment after approval), is the leasing company responsible for collecting the sales tax on those leases?
No, not for the original lease -- the dealer, as the original lessor, bears that responsibility. General Electric Capital Auto Lease, Inc. ("GECAL") buys motor vehicle leases from independent, unaffil…
New York Advisory Opinion TSB-A-95(36)S: In Donaldson, Lufkin & Jenrette's 22-year NYC IDA headquarters-relocation deal -- where a single affiliate, Leasing Corp., handles all outright equipment purchases -- are the purchases, improvement materials, rent, maintenance contracts, debt service, reimbursements, and buyout all exempt from sales and use tax?
Yes, exempt across all nine questions raised, subject to the usual strict agency documentation. Donaldson, Lufkin & Jenrette, Inc. ("DLJ") and its affiliates (the "DLJ Group") proposed a roughly 22-ye…
New York Advisory Opinion TSB-A-95(35)S: In a 15-year NYC IDA deal to keep Travelers Group and Smith Barney headquartered in New York City, are the group's equipment purchases, maintenance contracts, debt-service payments, intercompany cost-sharing, option buyout, and lease-removal penalties all exempt from sales and use tax?
Yes, exempt across all six questions raised, subject to strict documentation conditions. Travelers Group Inc. ("TGI"), Smith Barney Inc. ("SBI"), and their New York City-based affiliates (together "Tr…
New York Advisory Opinion TSB-A-95(33)S: Is a company's charge for creating and running Internet advertisements -- "Virtual Storefronts" displaying a client's products -- subject to New York sales tax?
Not taxable, as long as Petitioner isn't also selling tangible personal property. Mike Levy's company, Cyberactive, sets up "Virtual Storefronts" for client companies on the Internet, creating and run…
New York Advisory Opinion TSB-A-95(32)S: Are a horse spa's fees for pool use, a walk-around exercise service, horse transportation, and boarding subject to sales tax, and does it matter whether the horse owner or the facility's licensed trainer handles the horse?
It depends on who handles the horse: pool rental alone is untaxed as real property rental, but the exercise, transport, and boarding fees are exempt only when performed by a licensed trainer training …
When a customer trades in their old vehicle as part of leasing a new one, does the trade-in reduce the amount subject to New York sales tax -- even when the lease is actually financed and owned by a separate leasing company rather than the dealer?
It depends on whether the dealer taking the trade-in has actually been appointed as the leasing company's agent for accepting trade-ins (not merely for paperwork). If the dealer only has authority to …
Can an environmental engineering and consulting firm buy supplies, equipment, and services tax-free for a project performed for a tax-exempt government agency, by acting as the agency's purchasing agent?
Yes, if the government agency (a New York State or federal government body) confers agency status on the firm through contract language and the firm's purchase orders show it's buying as the agency's …
Does an out-of-state supplier owe New York sales tax on materials it sells to New York dental laboratories that use them to make dentures and crowns?
It depends on what the material becomes. Items that end up as a physical part of the finished denture or crown (teeth, porcelain, certain acrylics, certain metals) can be sold tax-free as a resale, as…
Is installing a new private cable television system for an apartment/condo complex an exempt capital improvement, or a taxable installation of tangible personal property?
Both, split by component. Burying the trunk cable, wiring buildings from the wall outlet to the cable pedestal, building the cable pedestal, and splicing/activating the cable lines are capital improve…
Is a graphic-arts firm's charge for a custom 'multi media' computer disk (a client-specific graphical presentation) an exempt sale of custom software, or a taxable sale of tangible personal property?
Taxable. Even though the firm is developing custom software written to each client's specifications, the firm isn't selling the software itself -- it's selling a physical disk containing data, along w…
Does a business owe sales tax on what it pays a service like Telecredit for guaranteeing the funds on its customers' checks?
It depends on exactly what's being purchased. A pure check-guarantee service (the guarantor replaces funds on a bad check) is NOT a taxable service and isn't subject to sales tax. But if the service a…
Is a New York corporation licensed only as an independent insurance adjuster (not as a private investigator) subject to sales tax on its trial-preparation work for insurers -- interviewing witnesses, taking statements, photographing accident scenes, serving subpoenas, and evaluating and negotiating claims?
No. Because the client is licensed exclusively as an independent insurance adjuster and does not perform private investigation services, its charges for investigating and adjusting insurance claims (i…
A firm is licensed as both a private investigator and an independent insurance adjuster -- are its fees for insurance-adjusting work taxed as 'detective services,' the same as its private-investigator fees?
No. Fees for activities that require an independent-adjuster license under Insurance Law Article 21 are NOT subject to the detective/protective-services sales tax, even though some of the underlying w…
Are camera-ready mechanical drawings sold to garment and textile manufacturers -- used to make the silkscreens that print designs onto fabric -- exempt production equipment, or taxable tangible personal property?
Exempt production equipment, as long as the customer buying them uses the mechanical drawings directly and predominantly (over 50% of the time) to produce printed fabric or other tangible goods for sa…
Is a certified sonographer's fee for a veterinary ultrasound exam -- including the written report, video tape, and thermal prints she gives the client -- subject to New York sales tax?
No, as long as she's selling a personal written report (impression) that isn't and can't be reused in reports to other clients -- that's an exempt 'personal or individual' information sale. But if she…
Does a free bi-weekly arts-and-entertainment magazine qualify as an exempt 'periodical,' and are the typesetting/layout charges for its pre-press camera-ready mechanicals taxable?
The publication itself qualifies as an exempt periodical. But because it's given away free rather than sold, its purchases of typesetting and camera-ready mechanicals -- which would otherwise be exemp…
When an independent auto dealer is the actual lessor on a vehicle lease and accepts a trade-in, but then immediately sells (assigns) the lease and vehicle to a finance company, can the trade-in still be excluded from the taxable lease receipts?
Yes. Because the dealer itself -- not the finance company -- is the lessor who negotiates and accepts the trade-in with intent to resell it, the trade-in value can be excluded from the taxable lease r…
Is a software-duplication company's disc-copying machinery exempt production equipment, and is the electricity powering it exempt production electricity?
Yes to both, but with different thresholds. The duplicating machinery is exempt if used more than 50% of the time ('predominantly') to copy master discs onto blank discs for resale. The electricity po…
Is a technical-manual developer's computer equipment, software, and supplies exempt production machinery under Tax Law Section 1115(a)(12)?
Yes, to the extent the equipment is used more than 50% of the time to produce camera-ready mechanicals or print-ready computer disks that are delivered to the customer as tangible personal property fo…
Can 14 related commercial property owners consolidate their on-site maintenance and janitorial staff's payroll processing into a single payroll corporation without triggering New York sales tax on the wages funneled through it?
Yes. As long as each property owner keeps the real controls that make the maintenance staff its own employees -- hiring/firing authority, setting salary and benefits, and reimbursing the payroll compa…
When a cigarette manufacturer packages a free promotional item -- like a lighter or playing cards -- together with a pack of cigarettes as a marketing premium, is buying that item a tax-free purchase for resale?
No. Promotional items given away for free with a product (rather than genuinely sold to the end customer) don't qualify for the resale exclusion -- the manufacturer's purchase of the premiums is a tax…
Is a vehicle's DMV registration by the lessee proof that sales tax was paid on a pre-June-1990 lease, and separately, does a lessor keep its exemption-certificate protection when it accepts a farmer's exemption certificate for leasing an ultrasound machine to a veterinarian for use on farm livestock?
No, DMV registration alone doesn't prove sales tax was paid -- for leases before June 1, 1990, the lessor owed sales tax on each lease payment separately (not all at once as under the current law), an…
Is a bank-account verification service -- where subscribers call in or log on to check whether an applicant's prior checking account was closed for cause -- a taxable information service, even though each answer is about one specific applicant?
Yes, taxable. Even though each inquiry is 'tailored' to one specific applicant, the answer is pulled from the same shared database used to answer every subscriber's inquiries -- so it isn't 'personal …
Is a company that operates school buses under contract with a school district providing a taxable rental of the buses, or an exempt transportation service?
An exempt transportation service. Even though the school district's contract dictates the bus routes, stops, timing, equipment specs, and even the pool of drivers to hire from, the bus company itself …
Is the fee a firm pays a third-party mainframe host to store and let it access its own previously-purchased databases -- with no hardware transferred -- a taxable information service or a taxable computer-timeshare rental?
Neither -- the flat monthly fee is untaxed. There's no transfer of possession of the host's computer (so it's not a taxable rental), and since the host is just storing and serving back the customer's …
Does a factory-manufactured home dealer owe sales tax on homes it buys and resells already-installed, and is the installation work of a related but separately-owned installation company subject to sales tax?
Homes sold and installed as permanent capital improvements (not mobile homes, not display models) escape sales tax on both the dealer's purchase and its resale, with the manufacturer owing the use tax…
Is a custom-fitted canvas awning, installed at a homeowner's residence to block sun from entering the living and dining rooms, an exempt capital improvement, or taxable?
Taxable. Canvas awnings are categorically NOT treated as a capital improvement under the Department's own published guidance and prior precedent, regardless of how custom-fitted or substantial the ins…
After further review, does a mandatory condominium association's entire assessment count as taxable club dues, or only the portion actually funding the pool and tennis courts?
Only a reasonable portion is taxable -- this modified opinion corrects the Department's own earlier answer (TSB-A-94(6)S) on the identical facts: rather than taxing the association's ENTIRE mandatory …
Is a hair-replacement system for male pattern baldness -- a custom mesh grid woven with human hair, fused into the client's existing hairline and serviced every 6-8 weeks -- exempt from sales tax as a prosthetic device?
Only if it's shown to be used for a genuine medical problem, not cosmetic purposes -- and even then, fitting/fusing the hairpiece into the client's own hair is itself a taxable installation service. T…
Is an electronic bulletin-board service that lets banks and warehouse lenders transmit loan data and files to each other's private mailboxes taxed as telephony/telegraphy, and are its interstate messages exempt?
Yes, the whole service -- licensing fees plus usage/file-transfer charges -- is taxable as a telephony/telegraphy service, since it functions as a message-switching network transmitting signals betwee…
Is 'guniting' an existing in-ground concrete swimming pool -- coating it with marble dust to extend its life 10-15 years -- an exempt capital improvement, or a taxable repair?
Taxable repair, not a capital improvement -- even though the coating substantially prolongs the pool's useful life, it's treated the same as a similar protective coating applied to storage tanks in a …
Across six different electronic-forms-business transactions -- paper-to-digital conversion, resold software, a licensed forms-development system, maintenance contracts, management contracts, and consulting -- which charges does a business forms company owe New York sales tax on?
Conversion services (scanning a form to a disc, or designing one) are taxable as tangible personal property when the company supplies the disc, but a taxable fabrication SERVICE instead when the custo…
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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.