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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Is routine office cleaning that a commercial landlord bundles into a tenant's lease payment subject to New York sales tax as a maintenance/repair service?
No -- routine cleaning baked into the negotiated lease rate is incidental to the rental of the space, not a separate taxable cleaning service, so those payments aren't subject to sales tax; but any cl…
Is a matchmaking/dating service, where a customer pays for an interview and is then mailed a match's name and phone number based on comparison with other interviewees' records, subject to New York sales tax?
Yes -- collecting and analyzing interviewees' information and furnishing customers with a match's name and phone number is a taxable 'information service,' so the fee charged for this dating service i…
Is a process-serving business's court-record research, photocopying, faxing, and delivery of legal documents subject to New York sales tax?
Process serving itself is not taxable, and neither are pickup, filing, and delivery of receipted copies or affidavits performed as part of process serving. But faxing copies of court documents to clie…
When an engineering/design/consulting firm also installs and sells the equipment it designs for, is its consulting fee taxable, or does bundling it with installation and equipment make the whole charge taxable?
Design, engineering, consulting, and advisory services standing alone are NOT taxable -- they aren't on the state's list of taxable services. But if a contract bundles those services together with ins…
Is a financial newsletter publisher's on-line news service subject to New York sales tax, and does its separately billed telephone consulting service escape tax as personal information?
Yes for the on-line news service -- it's a taxable information service because its content isn't personal or individual to any one subscriber, though it escapes the additional 5% telephone/telegraph s…
Does a preschool play-group and party business owe sales tax on its charges, and does it matter whether the event includes food, drink, or entertainment?
Charges for preschool play groups (classes with social and educational activities) are NOT subject to sales tax, since that kind of class isn't an enumerated taxable service -- unless it's sold togeth…
Does a not-for-profit 'call before you dig' organization owe sales tax on its member dues, which fund both its damage-prevention education/seminars and its call center that locates underground utility lines?
Yes -- the call center that fields calls from contractors and relays them to utility members is itself a taxable telephone answering service, and because members can't buy the education, seminar, trai…
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 installing a patented lawn-fertilization control device as part of a new or existing underground sprinkler system a tax-exempt capital improvement, and does that change if it's just replacing an existing pump?
Yes -- installing the device as part of a new underground sprinkler system, or adding it to an existing one, is a capital improvement and not subject to sales tax, because it permanently increases the…
Is a real-time financial-data terminal service (stock tickers, quotes, market news) delivered over leased telephone lines to desk-top display units subject to the additional 5% telephone/telegraph tax on top of the regular information-service tax?
No -- the service is a taxable information service under Tax Law Section 1105(c)(1) because it isn't personal or individual to any one subscriber, but it escapes the additional 5% tax under Section 11…
Can a mail-order company use an average industry shipping rate to calculate its exempt, separately stated shipping charges for periods before September 1, 1991, and does the shipping exemption still apply after that date?
No -- an Advisory Opinion can't resolve a factual question like whether $1.04 per package matches an industry-prevailing shipping rate, and there was never any rule letting an average rate substitute …
Does a tax-exempt nonprofit's sheltered workshop, where disabled clients perform auto detailing for paying customers, have to collect sales tax on those charges?
No -- the nonprofit's auto detailing (washing, window cleaning, vacuuming, waxing) is a sale of a SERVICE, not tangible personal property, and it doesn't fall into any of the specific carve-outs (reta…
Is an airline's purchase of on-line computer systems -- flight control, crew management, reservations, baggage tracing, and similar tools -- exempt from sales tax as personal or individual information when each system is built around the airline's own confidential operating data?
Mostly yes -- the Flight Control, Crew Management, AFTN, Flight Plan, ACTS, Baggage Claims Central File, and Sub-Host Reservations systems are all exempt, because each is based only on the airline's o…
Is a shopping mall's lease-based charge to tenants for redistributed electricity (plus an administrative fee) a taxable resale of a utility service, or is it untaxed rent?
It's untaxed rent, not a taxable utility resale -- because the electricity and administrative-fee charges are billed under the terms of the mall's leases as 'additional rent,' following the Court of A…
Are a golf course's membership initiation fees, annual dues, and driving-range fees subject to New York's tax on social or athletic club dues, even though it markets memberships and calls itself a 'country club'?
No -- because members have no proprietary interest, no control over activities or management, membership is open to the general public on a first-come, first-served basis limited only by the facility'…
Must a customer that resells purchased business forms only to tax-exempt New York municipalities still register as a sales tax vendor and give its supplier a resale certificate?
Yes -- a manufacturer selling business forms to a customer must collect sales tax on those sales unless the customer furnishes a properly completed Form ST-120, Resale Certificate. The fact that the c…
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…
Does a condominium's common-area electricity qualify for New York's reduced residential energy sales tax rate, including electricity used for the pool, laundry room, and a rooftop antenna lease?
Partly. Hall lights, stairway lights, heaters, and outside lighting tied to the residential building are common-area uses that DO qualify for the reduced residential energy rate. But electricity for t…
When a building owner hires an independent managing agent to hire, pay, and supervise building maintenance staff, are those workers' wages exempt from New York sales tax as employee wages, or taxable as the managing agent's service charge?
It depends on who really controls the workers. Where the building owner -- not the managing agent -- sets staffing levels, work hours, shifts, and pay rates, funds the payroll (even though the agent p…
Are receipts from selling custom industrial-control software, and from ongoing modification/updating services on that software, subject to New York sales and use tax?
No -- software designed and developed to a specific purchaser's own specifications ('custom' software) stays exempt from sales and use tax after the September 1, 1991 law change, and so do charges to …
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 standalone elevator inspection services subject to New York sales tax?
Yes, when the customer is the property owner or lessee. Inspecting elevators to check code compliance is a diagnostic service that counts as maintaining real property under Tax Law section 1105(c)(5) …
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…
Is a subscription regulatory-update newsletter an exempt periodical, or a taxable information service?
It is a taxable information service, not an exempt periodical. The publisher's RCRA Update is a bimonthly service consisting mostly of photocopied Federal Register pages plus staff summaries of EPA ha…
Are recording tape and equipment rentals used to make promotional demo tapes taxable, or exempt as production equipment?
They are taxable. An artist-promotion company bought recording tape and rented equipment to make demonstration tapes it sent free to record companies. Buying tape and renting equipment are taxable ret…
When a kitchen contractor sells cabinets, does it collect sales tax from the customer, or pay tax on its own purchase of the cabinets?
It depends on whether the contractor installs them. If the contractor merely sells the cabinets without installing them, it is making a retail sale and must collect sales tax from the customer under T…
Does a contractor owe sales tax on armored-car transport, delivery, and storage services when it performs them as an authorized agent of a New York State agency?
No. The charges are exempt. The petitioner arranged armored-car transport and bulk storage of federal food-stamp coupons for the New York State Department of Social Services. Storage services (Tax Law…
Are a tire shop's recycling fees -- both what it charges customers and what it pays haulers -- subject to sales tax?
It depends on the transaction. When a customer buys or has tires installed and the shop keeps the old tires, the $1.50 recycling fee is a charge for servicing tangible personal property and is taxable…
Is restoration of a building's deteriorated balconies and catwalks a tax-exempt capital improvement or a taxable repair?
It is a taxable repair, not a capital improvement. A co-op hired a contractor to inspect, test, clean, patch, and coat the deteriorated concrete of its balconies and catwalks -- removing cracked and s…
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 …
Can a monthly 'recurring credit' on a taxable service contract be subtracted from the amount subject to sales tax?
No. A travel agency's contract for American Airlines' SABRE system gave it a fixed monthly 'recurring credit' of $610 tied to hitting a booking target. The Department found this was not a true discoun…
Must a manufacturer collect sales tax on orthopedic braces and splints that normally qualify as exempt medical equipment?
Sometimes yes. Orthopedic devices such as braces, splints, cervical collars, and supports qualify as exempt medical equipment under Tax Law section 1115(a)(3). But that exemption does not apply to med…
Are massage services by a New York State licensed massage therapist subject to New York City and New York State sales tax?
They are taxable for New York City but not for New York State. New York City taxes massage services under Tax Law section 1212-A(a)(2) and NYC Administrative Code section 11-2002(h). Those laws exclud…
Is a power lift recliner exempt from sales tax as medical equipment?
No. A power lift recliner sold by a retail furniture store does not qualify as exempt medical equipment under Tax Law section 1115(a)(3). To be exempt, equipment must be primarily and customarily used…
Are chocolate-covered cookie bars like PB Max and Twix taxed as candy or exempt as food?
It depends on how they are packaged, marketed, and sold. PB Max and Twix are chocolate-coated wafer cookie bars. When sold in family packs and advertised, marketed, and sold as packaged cookies or sna…
Does an orthotist owe sales tax on braces, canes, crutches, and walkers it buys, and is fitting a brace a taxable medical service?
No, the purchases are exempt, because the orthotist is not performing a medical service. Braces (with component parts), canes, crutches, and walkers are exempt medical equipment under Tax Law section …
How does New York sales tax apply to selling, leasing, and using a medical PAP-smear screening device and a slide-scanning service?
It depends on the transaction and delivery point. Selling or leasing the 'Classifier' device to a New York laboratory that uses it in performing medical services for compensation is taxable, because t…
Can a printer buy its machinery, equipment, and supplies tax-free under the production exemption?
Only when it uses them to produce its own goods for sale. If a printer uses machinery, equipment, and supplies directly and predominantly (more than 50%) to produce printed matter that it will sell --…
Can a contractor buy construction materials tax-free when they will be built into property owned by New York State?
Yes. A subcontractor widening and lengthening a Meadowbrook Parkway ramp owned by the New York State Parks Department may buy the materials without paying sales tax. Although a sale of materials to a …
Can a publisher treat several differently-named weekly shopping guides as geographical editions of one shopping paper for the sales tax exemption?
No, not on these facts. A publisher wanted its four weekly shopping guides treated as geographical editions of a single 'shopping paper,' so they would count as one issue when testing the shopping-pap…
Is a service that reviews a store's cash-register internal controls a taxable information or detective service?
No, as described it is not taxable. A consultant observes how a retail store's cash-register operators ring up sales and make change, then writes a report to management about the store's internal cont…
Will the Department use an advisory opinion to approve a taxpayer's method of computing sales tax?
No. The Department declined to rule. A GM subsidiary that places computers at customer premises asked whether the method it used (and that had been examined on audit) to determine sales tax would be a…
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…
Is renting out a topsoil-screening machine subject to sales tax, or exempt as production equipment?
It can be exempt, but only in specific circumstances. Renting a 'power screen' topsoil-screening machine is normally a taxable retail sale under Tax Law sections 1101(b)(4), 1101(b)(5), and 1105(a). H…
When a heating contractor rents mobile boilers to supply temporary heat to an exempt organization's building while installing a permanent system, does the contractor owe sales or use tax on the boiler rental?
Yes. Although the contractor's service of providing temporary heat to the exempt organization is not taxable, the contractor owes sales or use tax on the mobile boilers it rents, because rented equipm…
When a social club collects membership dues and activity fees and forwards part of them to another club it shares facilities with, which club must report and remit the sales tax?
The club that bills its members must collect and remit the sales tax itself. A social club owes tax on its dues and on activity fees it charges members, cannot shift that tax onto the club it shares f…
Is a company's information service — a listing of area events sent to newspapers, radio stations, and TV stations — subject to New York sales tax?
No, when sold to news media. Information services are normally taxable in New York, but the law expressly excludes information services used by newspapers, radio, and TV broadcasters in collecting and…
Are a telephone company's receipts from private line circuits taxable as intrastate telephone service, or excluded from sales tax as interstate telephone service?
It depends on geography. Private line circuits that begin and end within New York are taxable intrastate telephone service; circuits that cross the state line are exempt interstate service. Where a Ne…
Are Japanese specialty sweets made from beans, flour, rice powder, and sweeteners exempt 'food' in New York, or taxable candy and confectionery?
Exempt. The Department ruled these traditional Japanese sweets — cakes, pastries, powders, and gelatins made from azuki beans, flour, rice powder, and sweeteners — are exempt food and food products un…
Which fees in a computerized securities-trading information network — directory listings, oral transmissions, delivery-instruction processing, broker referral premiums, and corporate-release fees — are subject to New York sales tax?
It splits by function. Fees to receive compiled trading information (including bundled directory listings and oral or Alert transmissions) are taxable information services; pure advertising listings a…
Is an advertising agency's charge for a video tape produced for advertising taxable, or is it an exempt advertising service?
It depends on the structure. Pure advertising concept work is an exempt service, but selling the video tape itself is a taxable sale of tangible personal property. If the client cannot buy the video s…
Is a company's lease of mobile MRI tractor-trailer units exempt from New York sales tax under the heavy tractor-trailer exemption, or taxable because of the MRI machine inside?
Taxable. The tractor and trailer alone would qualify for the heavy-vehicle exemption, but the MRI machine is taxable medical equipment used to perform medical services for compensation — and because t…
Are supervised physical-therapy and fitness services taxable as New York City gymnasium/health-salon services, or exempt because a licensed physiotherapist is involved?
Taxable in NYC unless the service is actually performed by a licensed professional. The facility's supervised training is a taxable New York City gymnasium/health-salon service; only services actually…
Are a financial data company's broker referral premiums and its charges to participate in a computerized research directory subject to New York sales tax?
Referral premiums brokers pay for customer leads are not taxable, because customer referral is not an enumerated service. Listing research for providers is exempt advertising, but the fees receivers p…
Are a company's charges for supplying temporary environmental field technicians to prime contractors subject to New York sales tax?
It depends on the work. A temp-staffing company must collect tax on personnel who perform taxable services, but the charges are exempt when the prime contractor buys the services for resale or for a c…
Are a company's data-processing services (statements, claims, billing reports) and its microfiche-conversion service subject to New York sales tax?
It splits. Processing that produces personalized statements, claims, and account reports is an exempt personal-or-individual information service; but merely converting data to written form or printing…
Is a vehicle lessor's flat fee for handling registration paperwork and getting license plates subject to New York sales tax?
Not taxable, with conditions. A vehicle lessor's flat fee for preparing registration paperwork and obtaining plates is not a taxable service — as long as the charge is separately stated on the lease o…
Is software licensed while it was only partly built taxable — the portion finished before the license as prewritten software, and the portion built afterward to the licensee's specs as custom software?
It splits. The roughly 60% of the software already built before the license is taxable prewritten software; the portion developed afterward to the licensee's own specifications is exempt custom softwa…
Are charges for temporary engineering-design and technical staff subject to New York sales tax?
It depends on the work, and the Department declined to rule finally. A temp-staffing charge is taxable only if the personnel perform a service New York specifically taxes; if they do, it is taxable un…
Is developing and maintaining a client's confidential membership database an exempt 'personal or individual' information service, or a taxable sale?
It depends on whether each product is data conversion or a true information service, and the Department declined to classify them without more facts. Merely reformatting a client's own data is a taxab…
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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.