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 encoding a TV commercial a taxable service the monitoring company must pay, and are the broadcast-monitoring reports it sells taxable?
The two charges are treated differently. VidCode Inc. verifies for advertisers whether their TV commercials actually aired as contracted, by first encoding a unique signature onto the master copy of e…
Does New York tax a sale shipped from New York to an out-of-state customer, or a drop shipment, when the customer takes delivery outside New York?
No — New York does not tax these sales, because the customer takes delivery outside New York. Audio-Video Corporation, based in Albany, asked about two situations, both involving Florida sales reps wh…
If a purchase order shows the sales tax separately, must the tax also be separately stated on later subcontractor progress billings?
No — showing the tax separately on the accepted purchase order is enough. New Ric Construction Company, Inc. separately stated the sales tax on its contract/purchase order, and its subcontractors late…
Are charges to a bank for repossessing vehicles a taxable service, and how are the repossessor's expenses and storage treated?
The charges to the bank are not taxable. Key Bank, N.A. hired vendors to recover and repossess vehicles from customers who defaulted on leases or loans, and asked whether those charges are subject to …
Are construction materials exempt when a tenant builds a new building on land owned by a tax-exempt religious corporation that takes title to the materials?
Yes — the materials are exempt from both state and city sales tax. 101 Limited Partnership leased land in New York City for 99 years from the Corporation of Trinity Church, a religious corporation tha…
Are consumer-marketing analysis reports built from a large shared database a taxable information service, or an exempt personal/individual service?
They are taxable. National Demographics and Lifestyles, Inc. sold manufacturers marketing reports — a Consumer Analysis Report, an NDL F/O/C/U/S report, and a Market Development Index — plus annual su…
Is cellular telephone service taxable, are all its bundled charges taxed, and what local rate applies?
Yes — cellular service is taxable, and all its bundled charges are taxed. Cellular Telephone Company (trading as Metro One) asked whether its two-way mobile telecommunications service is subject to ta…
Is a government tax bulletin published quarterly a tax-exempt periodical?
Yes — it qualifies as an exempt periodical. The New York City Department of Finance asked whether receipts from selling its 'Finance Quarterly Bulletin' are exempt as a periodical under Tax Law § 1115…
Can a retailer advertise and sell an item at a uniform tax-included price, and what must it do at the register?
Yes, with conditions. Amerada Hess Corporation asked whether advertising and selling Hess toy trucks at a uniform 'tax included' price would violate Tax Law § 1132(a), § 1133(d), or other provisions. …
Are wheelchair wheel covers exempt as medical equipment, and are the maker's production and subcontracting costs also exempt?
Yes — the covers are exempt, and so are the related production costs. New Directions International Inc. manufactures plastic wheelchair wheel covers that clip over the spokes to keep the occupant's fi…
Can a customer's purchase orders serve as sales-tax exemption certificates if they include only part of the ST-120 or ST-121 form?
No — the purchase orders are not valid exemption certificates. Edward Joy Co. received purchase orders from General Electric that contained only portions of the information required on Form ST-120 (Re…
Is trash collection taxable, and does a credit for customers who separate recyclables make it a nontaxable sale for resale?
Trash collection is taxable, and the recycling credit does not change that. A solid-waste hauler asked whether collecting trash is taxable under Tax Law § 1105(c)(5) and whether a bill credit offered …
Are a securities-quotation network's charges a taxable telephone service, a taxable information service, or an untaxed trade-execution service?
The three activities are taxed differently. NASDAQ, Inc. asked whether charges for using private telecommunication lines to provide stock quotations and execute securities trades are subject to the te…
When is selling an electric thermal storage heating system a taxable sale of goods, and when is installing it a nontaxable capital improvement?
It depends on who installs it. Joseph J. Guido, d/b/a Guido's Electric & Bldg. Supply, sells electric thermal storage heating units and systems and asked how four sales scenarios are taxed. The Depart…
Is a machine used to master compact discs exempt production equipment, and does it matter whether the discs are made for sale?
It is exempt when used to produce discs for sale, and the for-sale requirement is decisive. Script Systems, Inc. makes a compact disc-interactive 'Authoring System' that records video, audio, and text…
When a property owner pays a management company for workers, are the payments exempt wages, and is the management fee taxable?
The payments are not exempt wages, and whether the whole charge is taxable depends on what the worker does. A CPA firm asked about property owners that hire a management company to recruit and pay wor…
Are purchases, leases, and service contracts for equipment at a project owned by an Industrial Development Agency and used by a private company exempt from sales and use tax?
They are exempt, so long as the Industrial Development Agency owns the property. The Chase Manhattan Bank, N.A. planned to relocate a financial-services processing center to Brooklyn under a New York …
Is an electronic voice-messaging and telephone-answering service taxable as a telephone or telegraph service?
Yes — an all-electronic voice-messaging and answering service is a taxable telephone or telegraph service under Tax Law § 1105(b), except for interstate and international messages. Tigon Corporation l…
Are the fees and dues a real-estate multiple listing service charges its member brokers subject to sales tax?
Yes. All of the listing service's charges — including the one-time initiation fee and the annual dues — are receipts from a taxable information service. Mohawk Valley Listing Service, Inc. is a New Yo…
Is a design change to a printing press taxable, and does it matter whether the change happens before or after the press is delivered to the customer?
It depends on timing: a design change made before the press is delivered is exempt, but one made after delivery is a taxable repair subject to local (but not state) tax. William R. Barlow sells printi…
Are the charges for confidential product-testing reports about a company's own products a taxable information service?
No — confidential reports about only the customer's own products are an exempt personal and individual information service. Garden Way Incorporated, a maker of lawn and garden equipment, hired a Flori…
Is a country club member's voluntary contribution to a clubhouse renovation subject to the sales tax on club dues?
No — a truly voluntary contribution is not taxable dues, even though mandatory assessments for the same project would be. Joseph W. Burns, a Senior member of the Wykagyl Country Club, asked whether hi…
Are the amounts a country club pays a management company for workers who maintain its grounds subject to sales tax, when the club hires and supervises the workers but the management company runs the payroll?
They are taxable. Skyline Golf and Country Club, Inc. paid a management company for workers who maintain and service its grounds; the club hired, scheduled, supervised, and could fire the workers, but…
Does a freelance photographer have to charge sales tax on separately billed reimbursable expenses like travel, film, and lodging?
Yes — separately billed reimbursable expenses are part of the taxable charge for the photographs. Peter Vadnai, a freelance photographer, billed clients separately for expenses (food and lodging, airf…
Are advertising envelopes used to mail promotional material out of state from a New York post office exempt from sales and use tax?
It depends on the date: taxable for mailings before September 1, 1989, and exempt for out-of-state mailings on or after that date. Garden Way Incorporated used 'promotional covers' — envelopes heavily…
Is a fee for baling garbage and arranging to ship it out of state for disposal subject to sales tax?
Yes — baling garbage is taxable processing, so the per-ton fee is subject to sales tax. Michael J. Berger and Co., CPA's asked about a client planning to receive garbage from local carting companies, …
Is a telecommunications management company's bundle of services — including its management and membership fees and its usage reports — taxable as telephone service?
It is all taxable telephone service under § 1105(b), except interstate and international charges. Peat, Marwick Main & Co. asked about a client, a telecommunications management company that selects an…
Is a monthly subscription newsletter a tax-exempt periodical?
Yes — a monthly subscription newsletter that meets the periodical tests is an exempt periodical. Brownstone Publishers, Inc. asked whether its 'New York CO-OP & Condo Insider,' a monthly subscription …
Which interior-design installations — floor coverings, shelving, cabinetry, drapery, blinds, lighting — are tax-free capital improvements, and who pays tax on the materials?
It depends on permanence and, for floor covering, on a June 1, 1989 rule change. Hafner Associates, Inc., an interior designer, asked whether 20 different installations are tax-free capital improvemen…
Does a company owe New York tax on parts it buys out of state, receives in New York, then uses to repair cars at out-of-state race tracks?
No — the parts are purchased for resale, so there is no sales or use tax. BRM Motorsports, Ltd. transports race cars to out-of-state tracks and repairs and maintains them there; it buys parts out of s…
Is tax-processing software that requires analysis of the customer's needs and program modification exempt as custom software, and are annual license renewals also exempt?
Yes to both, if the software charge is separately stated. Computer Language Research, Inc. sells in-house tax-processing systems (Fast-Tax) whose preparation requires it to analyze each client's speci…
Can a utility get a refund of sales tax it collected more than three years ago, if it now refunds the tax to its customer?
No — the three-year statute of limitations bars it, even if the utility now refunds the customer. Niagara Mohawk Power Corporation collected 7% sales tax on a corporate apartment owner's utility bills…
When tenants build out their leased space in a tower on land owned by the U.S. Postal Service, are the tenants' construction materials also sales-tax exempt?
Yes. This Modified Advisory Opinion extends the exemption to the developer's space tenants (subtenants): materials that the space tenants and their contractors buy to build and install their tenant im…
When a computer maker uses its own products, is the use tax based on its selling price or its cost, and are service-contract replacement parts bought for resale?
The use-tax basis depends on whether the company made the item or bought it for resale, and its service-contract replacement parts are purchased for resale. Barrister Information Systems manufactures …
Are gastrostomy (stomach) feeding tubes for patients who cannot eat by mouth exempt from New York sales tax?
Yes. Gastrostomy feeding tubes are exempt from New York sales and use tax on two possible grounds. First, a tube that completely or partially replaces the function of a permanently inoperative or perm…
Is asbestos removal taxable when it is done only as a necessary step in replacing a home's boiler — a capital improvement?
No — not on these facts. Although asbestos removal is by itself a taxable service of repairing/maintaining real property under Tax Law § 1105(c)(5), when it is performed as a constituent part of a cap…
Are construction materials exempt from sales tax when a private developer builds an office tower on land owned in fee by the U.S. Postal Service, so that the finished work becomes Postal Service property?
Yes. Because the materials become an integral component of real property owned in fee by the United States Postal Service — an exempt federal instrumentality under Tax Law § 1116(a)(2) — and title to …
Does a contractor owe sales tax on materials used to rehabilitate privately owned homes, when the work is paid for with state and federal housing-program funds?
Yes. A contractor must pay sales tax on materials it buys to rehabilitate and improve privately owned homes and rental property, even though the work is funded and administered through New York State …
Are the dues and initiation fees of a golf and country club owned by one company taxable, when members have no ownership or control and anyone on the waiting list can join?
No. Because members of this owner-operated golf and country club have no proprietary interest, no control over its management or activities, and membership is not exclusive (new members are simply tak…
Can a photofinisher buy its film processors and printing equipment tax-exempt as production machinery, when part of the work develops the customer's own film?
It depends on the step. Machinery a photofinisher uses to develop a negative from film the customer already owns is NOT exempt, because that step is a taxable processing service on the customer's prop…
Is it a taxable sale when a company moves a division's assets into a brand-new corporation in exchange only for that corporation's stock?
No — not if the assets go to the new corporation solely in exchange for its stock. Transferring property to a corporation upon its organization in consideration for the issuance of its stock is expres…
Is machinery sold to the solid-waste industry exempt from sales tax — recycling equipment that turns scrap into materials for sale versus equipment that just compacts trash for a landfill?
It splits by what the machine does. Machinery used to process scrap (metal, wood, paper, cardboard) into usable materials that will be SOLD is exempt production machinery under Tax Law § 1115(a)(12) —…
Can a warranty-repair company buy its equipment tax-exempt as production machinery, when it reconditions defective units and ships them back to the manufacturer for resale?
No. A company that reconditions defective or damaged units and parts and ships them back to the manufacturer for resale is performing repair — not production — so its equipment does NOT qualify for th…
Is a construction management company liable for sales tax on purchases it makes as agent for the project owner, or is only the owner liable?
Ordinarily the owner, not the agent, is liable — but the agent's protection is not absolute. A construction management company that genuinely acts as agent for a disclosed principal (the project owner…
Are reports from searching computerized databases — like trademark or legal research — taxable as an information service, or exempt like a professional service?
They are taxable. Reports produced by searching computerized databases are a taxable information service under Tax Law § 1105(c)(1), because the information is drawn from common databases available to…
Are a creative advertising firm's services taxable, and does it owe tax on the materials and production work it buys to make ads and commercials?
A creative advertising firm's services — developing and placing advertisements — are not taxable, but the firm generally must pay sales tax on the materials and production services it buys to create t…
Can a business that brought an out-of-state yacht into New York for chartering pay use tax on the yacht's fair rental value instead of its full purchase price?
No. A company that brought an out-of-state yacht into New York to operate an ongoing charter business owes compensating use tax on the yacht's full purchase price plus renovations — not on its fair re…
When is a limousine hire an exempt transportation service, and when is it a taxable rental of the vehicle?
It depends on who has dominion and control of the vehicle. When a limousine operator retains dominion and control — providing the car and driver, directing the operation, choosing the routes, keeping …
Is a license to use prepackaged, off-the-shelf software — and its technical support — subject to New York sales tax?
Yes. A license to use prepackaged software that does not require an analysis of the customer's requirements or adaptation by the vendor is taxable as tangible personal property under Tax Law § 1105(a)…
Are home drinking-water lead-test kits and a faucet-mounted water filtration system exempt from sales tax as medical equipment?
No. Home drinking-water lead-test kits and a faucet-mounted water filtration system are both subject to New York sales and use tax; neither qualifies for the exemption for medical equipment under Tax …
Can a parent company take over its wholly owned subsidiary's assets without owing sales tax on the transfer?
Yes — if the assets come up to the parent as a liquidating dividend. The distribution of property by a corporation to its stockholder as a liquidating dividend is excluded from the definition of 'reta…
Is a body-worn appliance that protects the hips from fracture in a fall exempt from sales tax as medical equipment or a prosthetic aid?
No — it is taxable. Robert C. Ferber (of Prevent-Wise, Inc.) invented HIP-GUARD, a protective body-worn appliance meant to shield an older person's hips from fracture or dislocation if they fall onto …
A mail-order company distributes catalogs through an airline's on-board program (paying the airline a sales commission) and ships merchandise to New York customers who order from those catalogs — does the company owe New York franchise tax, and does it have to collect New York sales tax?
The company is exempt from Article 9-A franchise tax under federal Public Law 86-272 because its only New York activity is order solicitation followed by shipment from outside the state. But it must s…
Is installing a legally required underground vapor-recovery system at a gas station a capital improvement (so the contractor's charge is not taxable)?
It can be — but only if the installation is intended to be permanent. Larry E. Tyree Co., Inc. asked whether installing a vapor-recovery system (underground piping that returns gasoline fumes to the u…
When a photographer briefly lends a client a print or transparency just to reproduce it (then gets it back), is that a taxable sale?
No — it is not a taxable sale. Jim Bush Photography, a commercial photographer, lets clients temporarily hold a print or transparency solely to reproduce it in a promotional publication; the client ma…
Is a data-transmission service taxable as telephone/telegraph service, and must the provider charge tax on the receivers it sells and installs?
Yes on both, with an interstate carve-out. Peat Marwick Main & Co. asked, for a client ('XYZ Corporation'), how New York sales tax applies to a data-transmission business that moves data over dedicate…
When a printer produces free advertising materials mailed in and out of New York, who owes sales/use tax and on how much?
It depends on who does the mailing. Freed Maxick Sachs and Murphy, P.C. asked how sales/use tax applies when it hires advertising agencies and printers to make promotional materials (ads, catalogs, li…
Can a trade-show installer subtract its supervisors' costs and other expenses from the amount of a taxable service charge?
No. I & D Inc. assembles and disassembles trade-show exhibits and asked whether it could carve its supervisory-personnel costs (and their related duties — hiring laborers, arranging shipment, buying p…
Is a monthly financial newsletter of stock recommendations a tax-exempt periodical, or a taxable information service?
It is a taxable information service, not an exempt periodical. Generic Stock Investment Service, Inc. publishes a monthly newsletter of financial investment information — mostly analysis and buy/sell …
Must a tax-exempt nonprofit collect sales tax on items sold from a temporary table set up at its meetings?
No — not on these facts. The Richard Wagner Society of NY, Inc., a 501(c)(3) organization exempt under Tax Law § 1116(a)(4), sells Wagner-related books, records, and similar items (mostly by mail, but…
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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.