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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A developer builds subdivision roads it must later deed to the town — are the construction materials exempt from sales tax?
Taxable — unless the land is already owned by the exempt municipality when the materials go in. The Michaels Group, a residential developer, must build subdivision roads and, as a condition of subdivi…
Can an IDA developer's construction company buy materials and rent equipment tax-free as the IDA's subagent?
In principle yes, but this taxpayer couldn't prove it. Farash Corporation, Max Farash's wholly owned construction company, built IDA-financed facilities (Corporate Place) that the County of Monroe Ind…
Is installing dry-cleaning equipment in leased space a tax-free capital improvement, and can a contractor accept a capital-improvement certificate after already billing tax?
It is taxable, not a capital improvement — but a good-faith certificate within 90 days still shifts the liability. Allied Steam Corp. installed dry-cleaning equipment (bolted to the floor and piped in…
A store buys dog food from a veterinarian to resell — can it claim a credit for the sales tax shown on the vet's invoice?
No — the store cannot claim that credit. J. Leon Lascoff & Son, Inc., a pharmacy, buys dog food from a veterinarian to resell at retail; the veterinarian just passes along a copy of its own supplier's…
Are feeding pumps and tubes prosthetic aids or taxable medical supplies, and must an out-of-state mail-order seller collect New York tax?
The products are medical equipment/supplies (not fully exempt prosthetic aids), and the out-of-state seller must collect New York tax. Biosearch Medical Products, Inc., a New Jersey company, mail-orde…
Is selling and installing a steam boiler for a dry-cleaner in leased space a tax-free capital improvement?
No — the boiler's sale and installation are taxable, not a capital improvement. Allied Steam Corp. sold and installed a high-pressure steam boiler that supplies steam to a dry-cleaning operation in re…
When an ad agency buys a jingle, which parts of the demo, creative, and production fees are taxable, given that an original written score is an intangible manuscript?
An original written lead sheet or musical score is an intangible manuscript, so the part of the fee for it is not taxable even when the jingle deal closes with a taxable broadcast tape. This opinion m…
Can a food-service management company buy supplies tax-free for a school district it serves, when the district reimburses it?
No — the management company can't use the school district's exemption. ARASERVE, Inc., a food-service management company, runs a New York school district's meal program and buys 'miscellaneous expense…
Is a homeowner association's mandatory annual charge for a pool, beach, and lake rights taxable as club dues?
Yes — the annual charge is taxable dues. Lake Louise Marie Country Club, Inc. charges homeowners $125 per year, under recorded covenants, for the use of a swimming pool, bathrooms, beach, and lake rig…
Is the sale or license of a specialized software program that the vendor analyzes and adapts for each customer subject to New York sales tax?
No — the software is exempt intangible property, so its sale and licenses are not taxable. Astrogamma Inc. licenses 'Fenics,' a specialized program that helps foreign-currency options traders compute …
When a natural gas utility sells and installs vehicle conversion kits, sells compressed natural gas (CNG) as motor fuel at its own filling stations, and wholesales natural gas to fleet owners and other filling stations, which of those transactions trigger sales tax, motor fuel excise tax, and section 186/186-a utility gross earnings tax?
Different treatment for each of five transaction types. The Brooklyn Union Gas Company planned to sell/install below-cost CNG vehicle conversion kits, sell CNG as motor fuel at its own filling station…
Which sales tax exemption documents should a painting contractor obtain when working as a subcontractor for a prime contractor or directly for an owner or tenant?
It depends on the type of job. Sharon P. Sheinfeld asked, for a painting contractor who does both capital improvements and repairs (as a subcontractor for prime contractors and directly for owners and…
When a taxable information report is delivered to a client's offices both inside and outside New York, how much of the charge is subject to New York sales tax?
Only the part delivered in New York is taxable. Paul R. Comeau asked how much sales tax an information-service company must collect when it sends taxable research and marketing reports to a client tha…
Must a New York manufacturer collect sales tax when an unregistered out-of-state wholesaler buys goods for resale and has them drop-shipped to New York school districts?
Yes — the manufacturer must collect New York sales tax unless it gets a valid resale certificate, and the unregistered wholesaler cannot issue one. Vanguard Corporation, a New York maker of steel fili…
Are sales of aerosol sprays that detect drugs or explosives taxable, and does it matter whether the buyer is a government agency, a business, or an individual?
The sprays are taxable tangible personal property when sold to private buyers, but sales to federal, state, or local government are exempt. Sher Test Corporation planned to sell sets of aerosol sprays…
May a painting contractor accept a Resale Certificate (Form ST-120) in good faith when claiming a sales tax credit for tax paid on materials used in services sold for resale?
Yes — a properly completed resale certificate may be accepted in good faith. Sharon P. Sheinfeld asked whether a painting contractor claiming a Tax Law § 1119(c) credit for New York sales tax paid on …
Are a soft-drink bottler's reusable trays and dispenser tanks, transferred to wholesalers on a deposit-and-return basis, taxable?
No — the trays and tanks are exempt packaging materials, and the bottler may buy them for resale tax-free. Clinton's Ditch Co-op Co., a soft-drink bottler, sells its 2-liter product in reusable plasti…
When a business bills a customer for many small taxable sales in one period, does it compute sales tax on each sale or on the billing total?
Compute the tax once on the total for the billing period, not on each individual sale. Rochester Credit Center, Inc. sells many credit reports to each client during a monthly billing cycle and had bee…
Must a tax-exempt university collect sales tax when it bills its own students for telephone lines, long-distance authorization, and usage?
No — the university does not have to collect sales tax on those charges. Alfred University, an educational organization exempt under Tax Law § 1116(a)(4), runs a telephone system as a service to stude…
Is a forensic engineer's accident-investigation and expert-report work a taxable detective service, and does out-of-state delivery change the answer?
The work is a taxable detective service, but reports delivered out of state are not taxed. Stanley Greenfield is an engineer specializing in machine design who inspects industrial machinery involved i…
Is the sale and installation of power-grid equipment for an electric utility taxable when the seller never received an exemption certificate from the utility?
Yes — the seller must collect tax on the entire sale-and-installation charge because it never received an exemption certificate. ABB Power Transmission, Inc. sold and installed a Static Var Compensato…
Are a consultant's personal reports taxable, and is consulting that is bundled into the price of taxable training tapes taxable too?
The personal reports and scripts are not taxable, but consulting folded into the price of taxable training tapes is taxed unless billed under a separate contract. A behavioral scientist (client of Mor…
Can a restaurant buy the toy premiums it includes with kids' meals tax-free as a purchase for resale?
No — the toys are promotional items used with taxable meals, so the restaurant owes tax when it buys them, not a resale purchase. McDonald's Restaurants of New York asked whether the premiums (toys) i…
Does a New York resident owe use tax on an aircraft bought and hangared out of state when it lands and stays overnight in New York?
Yes — the resident owes New York State use tax once the aircraft is actually used in New York, though an emergency landing doesn't count and only state (not local) tax applies here. George Sexton, a N…
Is a jingle house's 'demo fee' — paid for an ad agency's option to buy the rights to a jingle — subject to sales tax?
The demo fee is not taxable when the agency rejects the jingle, but the demo and creative fees are taxed when the agency buys and takes a tape. Crushing Enterprises is a music 'jingle house' that crea…
Is the permanent installation of mirrors in homes a nontaxable capital improvement?
Yes — permanently installing the mirrors is a capital improvement, so the installation charge is not taxable. Robert Otto Inc. permanently affixes mirrors to walls in new and renovated homes with a sp…
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 …
Is removing contaminated soil, done as part of installing new gasoline storage tanks, a nontaxable capital improvement?
It depends on whether the tank installation is a capital improvement. Stewart's Ice Cream Co. removes old underground gasoline tanks, installs new ones, and — where a tank has leaked — also removes th…
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…
How should a telex reseller that can't tell where messages are delivered figure and document the sales tax on its charges?
The Department did not prescribe a method — the vendor must propose one that meets the recordkeeping rules, and the Department will then approve or reject it. Taft Consulting Corporation resells telex…
Does an out-of-state manufacturer owe New York use tax on free promotional products it ships to New York customers, and on what value?
Yes — after September 1, 1989 the free promotional hose are subject to New York use tax, valued at the manufacturer's normal selling price. Sara Lee - Hanes Hosiery makes hosiery outside New York and,…
Is installing raised access flooring a nontaxable capital improvement or 'floor covering,' or a taxable sale and installation of tangible personal property?
It is taxable — raised access flooring is neither a capital improvement nor 'floor covering.' Raised Computer Floors, Inc. installs access flooring on bolted or epoxied pedestals above a building's sl…
Is hauling waste water and sludge from a customer's site to a disposal plant a taxable real-property service, or a nontaxable transportation service?
It is taxable. Ecologics Management, Inc. contracts (usually annually) with generators of liquid waste — municipalities, food processors, landfills — to haul their waste water and sludge (96%–98% wate…
Is a solvent recycler's charge for removing recyclable materials from a New York site taxable, even though the materials are recycled and processed out of state?
It is taxable. Marisol, Inc., a solvent recycler, picks up recyclable material from sites in New York (in its own or subcontracted trucks), transports it to processing facilities in New Jersey, and us…
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…
Which of a dog club's charges — show admissions, dog-entry fees, cage rentals, and baked-goods sales — are subject to sales tax, and does 501(c)(7) status exempt them?
Most are taxable, and 501(c)(7) status does not exempt them. A dog club organized under IRC § 501(c)(7) holds dog shows to raise money, giving any excess to animal-welfare charities. The Department he…
Is renting out a crane with an operator a taxable rental of tangible personal property, and are the operator's wages excludable?
It is taxable, but separately stated operator wages come out. Northeast Timber Erectors, Inc. planned to rent out a crane with an operator to place modular homes, set beams and trusses, and hoist stru…
Is a charge for monitoring air for asbestos content during removal, and issuing reports, a taxable information service?
It is not taxable — the charge falls within the personal/individual exclusion for information services. George Industries, Inc. hired a consultant (A & A) to take air samples monitoring asbestos conte…
Is a bimonthly industry newsletter an exempt periodical, and does having all its articles written by one person change the answer?
It depends on authorship. Edward A. Donoghue Associates, Inc. proposed a bimonthly newsletter, Elevator Code News, reporting on codes and standards for the vertical-transportation (elevator) industry,…
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…
Is a not-for-profit stamping organization created by statute a New York State agency or public corporation exempt from sales and use tax?
No — it is not exempt. The Excess Line Association of New York, a not-for-profit organization created by an act of the Legislature (Insurance Law § 2130(a)) to review and 'stamp' excess-line insurance…
Is a home-inspection report bought by a prospective buyer a taxable information service, or a service to real property?
It is not taxable. Joseph A. Matocha asked whether charges for 'home inspection services' are subject to sales and use tax. In the transaction, a prospective buyer hires an inspector to examine a resi…
Do a window-and-door distributor's fabrication operations qualify its machinery for the manufacturing (production) exemption?
Yes — its production machinery qualifies for the exemption. RyTown Millwork, Inc., a distributor of windows and doors that sells to builders and contractors but does no installation, asked whether its…
Are advertising market-research services — focus groups, tracking, attitude, copy, and concept studies — a taxable information service?
It is not taxable — the research is a personal, individual information service. Paul R. Comeau, of Hodgson Russ, asked about market-research services performed by or for advertising agencies — focus g…
May a lessor buy a CAT-scan machine for resale, and are its lease charges exempt under the production exemption?
The machine can be bought for resale, but the lease charges are not production-exempt. Segal Equipment Associates owns a CAT-scan machine it leases monthly to a corporation that uses it to produce dia…
Are payments under an equipment 'lease' taxable rentals, or nontaxable payments under a security agreement (financing)?
They are nontaxable — the 'lease' is really a security agreement. Eastman Kodak Company asked whether payments a company (Corporation A) makes to a finance company (Corporation C) under a lease-financ…
Is a prewritten tax-preparation program taxable when the vendor personalizes it with the buyer's information to prevent copying?
Yes — the prewritten tax program (and its renewals and updates) is taxable. Lorraine L. Dunn, CPA, buys a tax-processing software program that the vendor personalizes with her name, address, Social Se…
Are non-destructive testing services and reports a taxable information service?
They are not taxable. PCA Engineering, Inc. tests and evaluates the physical characteristics of materials (mostly metal) in structures, machines, and equipment using non-destructive methods — magnetic…
Is a charge to drive a go-kart on a track taxable, and are packaged ice cream bars sold there taxable?
The go-kart charge is exempt; the ice cream bars are taxable. Little Ozzie's Inc. runs a go-kart raceway with no admission charge — only a charge to use a go-kart on the circular track — and sells pac…
Is replacing a built-in electric wall oven a nontaxable capital improvement?
Yes — it is a nontaxable capital improvement. Robert E. Harrison asked whether replacing the built-in electric wall oven in his home's kitchen is a capital improvement exempt from sales tax. The old 1…
Can a federal contractor buy tax-free as the government's agent, and is the state estopped by an old letter that wrongly said it could?
No on both counts — the contractor owes tax and cannot rely on the old letter. West Valley Nuclear Services Co., Inc., a Westinghouse subsidiary serving as general contractor to the U.S. Department of…
Can a seller-installer of equipment buy the labor its subcontractors perform on installation, maintenance, repair, and warranty work for resale?
Yes. British Telecom (CBP) Inc. sells and installs electronic equipment and bills customers two ways — a per-project installation charge based on actual hours, and an annual or periodic fee for mainte…
Are a private investigator's guard, security-consulting, litigation-support, due-diligence, and corporate-investigation services subject to New York City's protective/detective-services tax and the statewide information-services tax, and how are they sourced?
It depends on the service, and two different taxes are in play. Peat, Marwick, Main & Co. asked about services of its client RST, a licensed private investigator based in New York City. New York City …
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…
Are stock-for-stock exchanges, contributions of assets to a corporation's capital, and the transfer of custom software in a corporate reorganization subject to New York sales tax?
No — none of the described transfers is a taxable retail sale. Nomura Securities International, Inc. (NSI) planned a three-step corporate restructuring, and asked whether the transfers were excluded f…
Is installing a bolted-and-wired trash compactor in an apartment building a capital improvement, or a taxable sale and installation of equipment?
It is not a capital improvement. Multi-Pak Sales Corp. manufactures trash compactors and sells them from a catalog, installing them (as New York code requires) under the trash chutes of apartment buil…
When is replacing air-conditioning condensing units or thru-the-wall units a nontaxable capital improvement, and when is the work taxable repair of tangible personal property?
It depends on what is installed and how permanently. ANC Heating and Air Conditioning, Inc. asked whether replacing air-conditioning condensing units (for an upgrade or after a breakdown) and replacin…
Are a tenant's contractors exempt from sales tax on materials built into a building whose title vests in the tax-exempt Port Authority?
Yes — the materials are exempt. Salomon, Inc. leased office space in 7 World Trade Center and planned major structural improvements. The land under the building is leased from the Port Authority of Ne…
Are electronic voice-messaging and telephone-answering services a taxable telephone/telegraph service, and how are they sourced and rated?
Yes, they are taxable telephone/telegraph services. G.T.E. Telemessager Incorporated runs a computerized voice-messaging network ('VMX') that lets subscribers store, retrieve, redirect, and broadcast …
Does hiring a New York lettershop to mail catalogs make an out-of-state mail-order company a New York vendor that must register and collect sales tax?
Hiring the New York lettershop does not, by itself, make the out-of-state company a New York vendor — but its own solicitation of New Yorkers can. Geran Mailing, Inc., a New York direct-mail (lettersh…
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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.