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 installing a synthetic-turf putting green on real property a nontaxable capital improvement, or a taxable installation service?
It's a nontaxable capital improvement — with a catch. Installing a permanent synthetic-turf putting green on real property qualifies as a capital improvement under Tax Law §§ 1105(c)(3) and 1101(b)(9)…
Does the reduced residential sales-tax rate on energy apply to a homeowners association's energy used to maintain development common areas?
No. The reduced residential sales-tax rate on energy sources and services under Tax Law § 1105-A does not apply to a homeowners association's charges for energy used to maintain the development's comm…
Is microfilming blueprints and reports required for building permits a nontaxable capital improvement, or a taxable sale of tangible personal property?
It's taxable. Microfilming blueprints, applications, and inspection reports for architects, engineers, and developers is a sale of tangible personal property subject to sales tax under Tax Law § 1105(…
Are charges for writing one-page abstracts that summarize conference speeches subject to New York sales tax?
No — the abstract-writing isn't taxable. One-page abstracts summarizing the speeches and papers from a client's conferences are 'manuscripts,' which count as intangible personal property, so receipts …
Is an investment advisor's telephone consulting service to newsletter subscribers a taxable information service?
No. An investment advisor's telephone consulting service — where sophisticated subscribers call the newsletter's authors with their own highly individualized concerns — is not a taxable information se…
When a retailer buys single-part price tickets to attach to merchandise, is that purchase subject to sales tax or exempt as packaging?
It's taxable. When a retail merchant buys single-part 'price tickets' to attach to merchandise and garments it sells, that purchase is subject to sales tax under Tax Law § 1105(a). The tickets don't q…
Is an airline's purchase and installation of a custom baggage-conveyor system in a leased airport terminal exempt when title vests in the exempt Port Authority?
It's exempt. Where an airline buys and installs a custom baggage-conveyor system in a terminal it leases from the Port Authority, and the lease provides that title to the installation vests immediatel…
Are membership deposits and dues for a developer-run recreational community club taxable as social or athletic club dues?
No. Membership deposits and dues paid to a developer-operated recreational club (ski, golf, tennis, equestrian, fitness, swimming, and social facilities) are not taxable social or athletic club dues u…
Does the rental of a 'yardhorse' yard tractor qualify for the sales-tax exemption for heavy tractor-trailer combinations?
No. The rental of a 'yardhorse' yard tractor used with a trailer weighing over 26,000 pounds does not qualify for the Tax Law § 1115(a)(26) exemption for tractors and trailers. Although the vehicle cr…
Must a real-estate facilities-management firm collect sales tax on the rental-plan books and custom software it delivers to building owners?
Yes, largely. A firm that produces computer-generated rent information and floor-plan graphics for building owners must collect sales tax on its rental-plan books, which are tangible personal property…
Which of a mall cinnamon-roll shop's items are taxable, and does having tables or a food court change the answer?
It depends on the item and how it's sold. At a mall 'Cinnabon' shop: fresh-baked (heated) cinnamon rolls, cups of coffee, soft drinks, and bottled water are taxable whether eaten in or taken out. Pre-…
Are a members-only Fire Island beach club's dues taxable as club dues, and are its furnished unit rentals taxable hotel occupancy?
No to both. A members-only Fire Island beach club is not a taxable 'social or athletic club' under Tax Law § 1105(f)(2): its memberships are sold to the public first-come, first-served, members have n…
Can a retailer buy labeling and hanging services for its resale merchandise tax-free, and is use tax due if the work is done out of state?
No — the labeling and hanging services are taxable. When a clothing retailer hires a company to print and affix labels and put merchandise on hangers, those services are taxable under Tax Law § 1105(c…
Is a nonprofit venture-capital networking group a tax-exempt organization, and are its member dues and the meeting rooms it rents subject to New York sales tax?
Three answers, and the group comes out untaxed on the parts that matter. (1) No — the Western New York Venture Association does not qualify as an exempt organization under Tax Law § 1116(a)(4), even t…
Must a housing co-op charge sales tax on the parking and garage fees it bills tenant-shareholders who own their spaces through allocated shares?
No. A cooperative housing corporation does not have to collect sales tax on the rental fees it charges tenant-shareholders for garage and parking spaces, when those spaces are represented by shares of…
Is a singles newsletter that is mostly directory listings exempt from New York sales tax as a periodical?
No — it's taxable. 'The Matchmaker,' a newsletter for Jewish singles, is not exempt as a periodical under Tax Law § 1115(a)(5), even though it meets all five general requirements for a periodical in R…
Is a manufacturer's sale of ultrasound diagnostic imaging equipment exempt from New York sales tax as production machinery or as medical equipment?
It's not exempt as production equipment, but it is exempt as medical equipment — with a catch. Advanced Technology Laboratories' ultrasound diagnostic imaging systems do not qualify for the § 1115(a)(…
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…
When a bank resells repossessed cars and mobile homes and buys credit reports on borrowers, which of those are subject to New York sales tax?
It depends on the item. (1) Yes — a bank that sells repossessed automobiles is a 'vendor' of motor vehicles and must collect sales tax at the time of each sale unless it receives a proper exemption do…
Are single-use artificial kidneys used in dialysis exempt from New York sales tax?
Yes — with the usual carve-out. Sales of artificial kidneys (the single-use dialyzers used in hemodialysis) are exempt from New York sales and use tax as medical equipment and supplies under Tax Law §…
When a service provider bills a customer for travel, hotel, meals, and other expenses, are those reimbursements part of the taxable charge?
Yes — the reimbursed expenses are taxable. When Helmel Engineering bills a customer for installing or servicing machinery and adds its employees' mileage, hotel, auto rental, and meal expenses (plus a…
Must an out-of-state supplier collect New York tax on goods it drop-ships to a New York fabricator for a customer in a third state?
Yes — collect the tax, but a refund route exists. When Teddy & Arthur Edelman (a Connecticut leather supplier) sells leather to an out-of-state customer (e.g., in California) but ships it to a New Yor…
Is a nonprofit that runs a downtown Business Improvement District a tax-exempt governmental entity under New York sales tax law?
No. The Downtown Utica Development Association — a not-for-profit corporation that administers the Downtown Utica Business Improvement District — is not an agency, instrumentality, public corporation,…
Does a salvage broker owe sales tax on the storage and towing charges it pays to release insurance-owned vehicles headed for resale at auction?
No — with resale certificates. Salvage Management, a broker that tows and stores insurance-owned wrecked vehicles and sells them for resale at dealer wholesale auctions, does not owe sales tax on the …
Are membership dues at a public, management-controlled golf and country club taxable as social or athletic club dues?
No. Membership dues paid to Bluff Point Golf and Country Club are not subject to New York State and local sales tax, because the club is not a 'social or athletic club' under Tax Law § 1105(f)(2). Mem…
Are a company's permanently installed fabric canopies and awnings a nontaxable capital improvement, and what about illuminated awning signs?
It splits. Permanently installed custom canopies and awnings made of durable plastic fabrics (vinyl, polyester, acrylic, or modacrylic) that are welded and bolted to a building qualify as a capital im…
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…
Is customized computer software and software maintenance taxable in New York, and how do separately stated charges affect the answer?
It depends on separately stating the charges. Under the software rules effective September 1, 1991, pre-written software that is modified or enhanced to a specific purchaser's specifications is entire…
Is a medical-records storage-and-retrieval subscription service a taxable information service or a taxable storage service in New York?
It's taxable — as a storage service, not an information service. Immediate Medical Records' subscription service (organizing, computer-storing, and on request transmitting a client's medical records t…
Is a telephone sales-lead generation service a taxable information service in New York, and does handing over written lead reports change that?
No. Alan/Anthony's telephone sales-solicitation service — calling potential buyers with a client-approved script to generate qualified sales leads and reporting them to the client in writing — is not …
Are individualized investment-evaluation and consulting reports a firm prepares for pension plan sponsors and money managers taxable information services?
No. SEI's investment-evaluation and consulting services for pension plan sponsors and money managers are not taxable. The reports it prepares — Investment Policy Planning, Asset Allocation, Investment…
Is asbestos removal taxable in New York when it is done as part of a capital improvement, such as reinsulating pipes and boilers?
No — not on these facts. Asbestos removal by itself is a taxable service (maintaining/repairing real property under Tax Law § 1105(c)(5)). But when the removal is a constituent part of a capital impro…
When an out-of-state seller drop-ships goods to a New York third party at an out-of-state customer's request, must the seller collect New York sales tax, and on what amount?
Yes. When Crescent Metal Products, an Ohio manufacturer registered as a New York vendor, drop-ships goods to a third party in New York at the request of its out-of-state customer, it must collect New …
Must a large housing cooperative collect New York sales tax on the fees it charges tenant-shareholders for parking spaces and garages?
Yes. United Veterans Mutual Housing Company, an 850-apartment cooperative in Queens, must collect New York sales tax on the fees it charges for parking spaces and garages. Providing parking, garaging,…
Is a toll-free 'call before you dig' service that takes callers' messages and relays them to member utilities a taxable telephone answering service in New York?
Yes. One Call Systems runs a toll-free 800 'call before you dig' center where contractors, utilities, and the public report an intent to disturb the earth, and it transmits those messages to the membe…
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…
Are a stock-footage library's charges to customers taxable when it grants the right to reproduce movie footage and delivers workprints and master copies?
It splits. Sherman Grinberg Film Libraries catalogues and licenses studio-owned 'stock' footage. Its arrangements with the studios are not taxable: it only takes temporary possession of the original n…
Does a microwave carrier collect New York sales tax on local vs. interstate telecom service, and is its transmission equipment exempt?
Local yes, interstate no, and the equipment can be exempt. Local Area Telecommunications, a microwave common carrier, must collect New York sales tax on charges to customers for local (intrastate) tel…
Can an interior design and space-planning service qualify for the capital-improvement exclusion from New York sales tax?
No. Hafner Associates' interior design and space-planning services — layouts, lighting design, millwork elevations, finishes and furnishings specifications, and project management presented on bluepri…
Is the fee to cancel a computer-equipment lease subject to New York sales tax, and does a later reimbursement of that fee change the answer?
Yes, it's taxable. Omori & Associates paid a termination fee to end a five-year computer-equipment lease early (to upgrade to new IBM equipment). Because a lease of tangible personal property is a tax…
Are a contractor's cable-TV installation and testing charges to a cable company taxable, and when do resale, capital-improvement, or exempt-organization rules apply?
Generally taxable, with several carve-outs. A contractor's charges to a cable-TV company for the 13 listed services (testing, splicing, wiring, trenching, drop-cable installs, pole transfers, etc.) ar…
When software is sold as one unit combining a taxable insurance-rating database and nontaxable custom software, is the whole price taxable?
The whole price is taxable when sold as one unit. Insurance Automation Systems sold a two-part insurance-quoting system (June 1988-May 1991): (1) a database of New York insurance companies' rating fac…
Are hemodialysis kidney machines and their single-use disposable supplies exempt from New York sales tax, and as what kind of exempt item?
Exempt as medical equipment — with a carve-out. Althin CD Medical's hemodialysis kidney machines and the single-use disposable supplies (needles, tubing, filters) used with them are medical equipment,…
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 a separately priced software maintenance agreement taxable in New York, and how did the 9/1/1991 law change the answer?
It depends on the date, and on itemization. Before September 1, 1991, custom/modified software was intangible personal property, and maintaining or servicing an intangible was not an enumerated servic…
Are honey-roasted peanuts taxable in New York, or are they exempt food?
Yes, they're taxable. Planters Honey Roasted Peanuts are dry-roasted peanuts with a light honey glaze encrusted with sugar (the principal ingredients after peanuts are sugar and honey). Under regulati…
Are the management fee and cost reimbursements paid to a food-service contractor to run a subsidized cafeteria subject to New York sales tax?
Yes. ARA Services would run a for-profit cafeteria open to the general public in a building whose landlord pays it a management fee plus cost reimbursements. Pure management of a for-profit cafeteria …
Can a customer give a contractor a capital-improvement certificate after the contract is signed and the first tax invoice is paid, and who then owes tax?
Yes, the customer can furnish the certificate later, with limits. Once Action Scale receives a properly completed Certificate of Capital Improvement, it must stop collecting sales tax on future invoic…
Is the sale of advertising space in a free discount-shopper directory subject to New York sales tax?
No. A client that publishes a discount shoppers directory and earns income only from selling advertising space in it is providing an exempt advertising service, not a taxable information service. Tax …
Is an optional 'loss protection' charge on leased pagers taxable, and does it need to be separately stated?
Not taxable, if it's broken out in the contract. Pro Net leases pagers and offers optional 'loss protection' (about $1-$1.50 per pager monthly) that spares a customer from paying the full value of a l…
Is installing energy-saving reflectors in existing fluorescent light fixtures a nontaxable capital improvement or a taxable installation?
Taxable. N.R.G. Savers installs custom-designed reflectors in existing fluorescent fixtures — repositioning the sockets and cutting a four-lamp fixture to two lamps (or two to one) to save energy. Tha…
Is the Savings Bank Life Insurance Fund a New York State agency or instrumentality exempt from sales and use tax?
Yes. The Savings Bank Life Insurance Fund was created by an Act of the New York Legislature (L.1940, ch. 449; Banking Law § 270) as a body corporate within the banking department, and it grew directly…
Is New York sales tax charged on the federal luxury tax when a car is bought or leased, and how does it work on a lease?
No sales tax on the separately stated federal luxury tax. The federal retail excise tax on luxury items (26 U.S.C. ch. 31) is imposed on the consumer, so under regulation § 526.5(b)(2) it is excluded …
Are environmental testing and reporting services on a landfill's own ground taxable in New York?
It's not a taxable information service, but it can be taxable as a real-property service. A landfill hires outside vendors to analyze and report the levels of motor oil, groundwater, leachate, condens…
Are medical billing, payment processing, collection, and customer-service functions subject to New York sales tax?
No. Datamedic Corp. provides medical practices with billing, insurance-claim/payment processing, collection, and patient customer-service functions (coding claims, submitting them to carriers, posting…
Is an on-line financial news service an exempt newspaper/periodical, or a taxable information service, and is the delivery equipment taxable?
Taxable information service, not an exempt newspaper or periodical. Market News Service's 24-hour on-line international financial news is delivered as an electronic readout/display on a screen, not in…
Is a banquet gratuity charge subject to sales tax when the operator keeps part of it instead of paying the entire gratuity to the banquet employees?
Yes — the entire gratuity charge is taxable. A separately stated, gratuity-designated charge escapes sales tax only if ALL three conditions in 20 NYCRR § 527.8(l) are met, and the third is that all of…
On an automobile lease with a purchase option, is sales tax due on the down payment, and who is responsible for collecting the tax on the full lease price?
For this pre-June-1, 1990 automobile lease with a purchase option, sales tax was due on the FULL lease price and had to be collected on each payment made under the lease — and the lessor/vendor (the l…
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…
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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.