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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Can a printer get a New York refund of sales tax paid on production machinery after already losing a hearing on the assessment?
No. Express Printing Co. sought a refund of $7,162.33 in sales/use tax it said was paid on machinery and equipment used directly and predominantly to produce tangible personal property for sale. The D…
Are a club tennis pro's lesson fees, billed on members' monthly club statements, taxable as club dues?
Not taxable — but only if four conditions are met. Asher Kahn (d/b/a Fenway Tennis Shop) is an independent contractor who runs the tennis operation at a private golf club and gives lessons; a member b…
Are admission charges to a small folk-music cafe taxable as cabaret charges when food sales are only a small part of the business?
No — the admission charges are not taxable. Philip Ciganer (d/b/a The Towne Crier Cafe) presents small folk-music concerts (about 95 seats, no dance floor) and also sells food and drink. He asked whet…
Does a direct-response advertising firm charge sales tax to its clients, or pay tax on its own purchases?
It pays tax on its own purchases and does NOT collect tax from clients. Names in News/Direct Response Inc. assembles advertisers into a mass card-deck mailing: it takes each client's printing 'mechani…
Is aerial photogrammetry performed by licensed surveyors and engineers a taxable sale, an exempt professional service, or an exempt information service?
It depends on what is sold. This Modified Advisory Opinion reconsiders TSB-A-87(26)S after Lockwood Support Services supplied fuller facts showing it performs aerial photogrammetry using licensed land…
When a New York florist takes an order and wires it to another florist, where — and whether — is sales tax collected?
It depends on whether the sale runs through a florist wire (telegraphic/telephonic delivery) association. John Raspante, CPA, asked about a New York client who takes flower orders from the public and …
Does a vendor owe New York sales tax when an out-of-state buyer has the goods shipped to a New York address?
Yes — the vendor must collect New York tax. C.R. Daniels, Inc., a Maryland corporation registered as a New York sales tax vendor, sells to a purchaser in Pennsylvania and, at that purchaser's request,…
Is an economic-commentary newsletter that comes out only 'approximately' quarterly an exempt periodical?
No — it is taxable. Sage Alternatives, Inc. publishes 'Sage Advisory,' an economic commentary reviewing and analyzing past events for subscribers, which it says comes out 'approximately' quarterly. It…
Are an investment adviser's phone consultations, hotline, and newsletter subject to New York sales tax?
Mostly no — none of the three services is taxable here. Harmonic Research, Inc., an SEC-registered investment adviser, offers (1) consultations, (2) a telephone hotline, and (3) newsletter subscriptio…
Are a New York mover's business forms and selling supplies taxable if bought from an out-of-state franchisor and used for interstate moves?
They are taxable. Bay Shore Warehouse, Inc., a New York mover operating under a franchise with an out-of-state van line, must buy the van line's forms and selling supplies (delivered to it in New York…
Which of a bank data processor's computer services are taxable, and which are exempt information or bookkeeping services?
It splits by the type of work. Northeastern Computer Services, Inc. provides on-line computer processing for banks, savings-and-loans, and credit unions (maintaining depositor/loan/checking/IRA accoun…
When a car buyer trades in an old vehicle to the dealer but leases the new one from a separate finance company, can the trade-in value reduce the lease amount subject to New York sales tax?
No — the trade-in value can't reduce the taxable lease amount, so New York sales tax is due on the full lease price. Marine Midland Automotive Financial Corp. leases cars to consumers through dealers …
Are membership dues at a golf-and-pool facility owned and run by one individual, where members have no say in management or membership, subject to New York sales tax on club dues?
No — the dues are not taxable, because this isn't really a club. EverGreen Country Club, Inc. offers members a golf course and swimming pool (also open to non-members for a fee) but is owned and opera…
Must an advertising agency collect New York sales tax when it bills clients for arranging billboard displays and for placing ads in trade journals that aren't sold at newsstands?
No — both charges are exempt advertising services, so the agency doesn't collect sales tax from clients. Stillman Advertising Inc. asked about (1) arranging billboard advertising and (2) placing ads i…
Is a vendor's sale of medical practice-management software taxable, when the software is either sold as-is, customized, or recompiled to add a doctor's insurance ID for electronic billing?
It depends on whether the vendor analyzes or adapts it. Compu Service sells 'THE MEDICAL MASTER,' a medical office-management program (with hardware and installation) that lets physicians file insuran…
When a business buys custom software along with taxable hardware, is the software taxable — and what happens if the vendor doesn't separate the software price from the hardware price?
The software is exempt, but an unsegregated bundle is fully taxable. Rock's Tire and Battery, Inc. bought a computer system after months of vendor analysis; the initial bill did NOT separate the softw…
What makes a New York exemption certificate properly completed, who then owes the sales tax, and what are a contractor's obligations when it receives a capital improvement certificate?
A properly completed certificate shifts the tax burden to the buyer; a contractor doing a capital improvement pays use tax on its own materials. D.C. Distributing Inc., a siding-and-window wholesaler …
Is a contract to clean grease and odor exhaust systems in commercial kitchens exempt as interior cleaning and maintenance, or is it taxable equipment maintenance?
It's taxable — this specialized equipment cleaning isn't the exempt ordinary interior janitorial service. Shaban & Son, Inc. cleans grease and odor exhaust systems in commercial kitchens under contrac…
Can a sportsmen's club buy the clay targets it uses for members' trap and skeet shooting tax-free for resale, since it charges members taxable fees to shoot?
No — the clay targets are taxable to the club as consumed supplies, not resold to members. Camillus Sportsmen's Club, Inc. is a social or athletic club (Tax Law § 1101(d)(13)) that collects sales tax …
Does a repair subcontractor have to charge a video-equipment retailer sales tax on repairs, when the retailer marks up the charge and collects tax from the final customer?
No — the subcontractor doesn't collect tax from the retailer if the retailer gives a proper resale certificate, because the repair is for resale. Video Systems Service sets up service departments insi…
Does laboratory furniture used to test incoming electronic equipment for quality control qualify for New York's research-and-development or production machinery sales-tax exemption?
No — it qualifies for neither exemption, so it's taxable. Grumman Aerospace Corporation bought laboratory furniture (work stations, multi-wired legs, pedestals, etc.) for its avionics lab, where it te…
Is the technical advice of a licensed professional engineer — evaluating and recommending upgrades to a building's air-conditioning system — subject to New York sales tax?
No — a licensed professional engineer's technical advice is not subject to sales or use tax. R.H. McDermott Corp., a licensed professional engineer, is engaged (usually by other engineering firms) to …
What sales tax rate applies when a dealer sells a new boat together with a trailer — the rate where it's delivered, or the rate where the buyer lives?
The boat is taxed at the delivery-point rate, but the trailer is taxed at the rate where the buyer resides. M & D Inc. asked the correct sales tax rate on a sale of a new boat and trailer. Tax Law § 1…
Can New York require an out-of-state mail-order subsidiary with no in-state presence to collect sales tax, when its parent solicits New York customers and steers them to the subsidiary?
Yes — on these facts the subsidiary is deemed a New York vendor that must collect sales tax. A CPA asked (as a hypothetical) whether an out-of-state direct-marketing Subsidiary — no NY property or off…
Are corrugated point-of-sale display materials sold with a product exempt as packaging, or are they taxable — and does it matter whether the display is a separate insert or part of the shipping carton?
It splits by design: a shipping carton reused as a display is exempt packaging, but a separate insert display is taxable. A carton manufacturer designs and sells corrugated point-of-sale display mater…
Is an advertising agency that buys media and materials for the U.S. Army a purchasing agent for the federal government (so its buys are tax-exempt), or a taxable contractor selling to the Army?
The agency is a taxable contractor, not the Army's purchasing agent — so its purchases aren't exempt federal-government buys. Young & Rubicam Inc. is the advertising agency for the United States Army …
Is the gas and electricity a subcontractor uses to reprocess a manufacturer's rejected metal, glass, or plastic parts back into resalable material exempt as production fuel?
Yes — the gas and electricity is exempt production fuel to the extent used directly and exclusively (100%) in the reprocessing, even though the subcontractor never owns the material. Burn Brite Metals…
Is hazardous-waste cleanup and hauling to a disposal site taxable, is a separately stated transportation charge taxable, and can the company buy its supplies for resale?
The service is taxable trash removal, the separately stated freight is taxable too, and whether the supplies are resale-exempt is a factual audit question. West Central Environmental Corp. cleans up h…
Can a franchisor that buys the gas and electricity for its franchisee-operated stores get a sales tax refund for the portion the franchisees use in an exempt, production manner?
Yes — the franchisor gets a refund for the exempt production portion of utilities it buys, unless it resells the utilities to franchisees, in which case it must collect tax. The Southland Corporation …
When a trucking firm hauls material for contractors with its own driver, is it providing a nontaxable transportation service or a taxable rental of the truck — and when does it owe tax on the material?
Hauling with the firm's own driver and control is a nontaxable transportation service; only when the firm buys and sells the material does resale-tax handling apply. C.K. Industries Corp., a trucking …
When a social services agency commits to pay a public-assistance client's electric bill directly, is the utility's sale of that electricity an exempt sale to a government agency?
Yes. This Modified Advisory Opinion supplements a Con Edison opinion issued August 31, 1987 — TSB-A-87(27)S, on the same Petition No. S870602C — by analyzing its new 'Direct Vendor' program. Under the…
Are dues to a golf and tennis club taxable when the club is corporately owned and runs private outings without members' consent, but members elect the board that manages it?
Yes — the dues are taxable and there's no refund, because the members elect the board that controls the club. Harold Rothberg argued that dues to the Canyon Club (a golf and tennis club) weren't taxab…
Is the service of pumping accumulated water out of a landfill's required liners a taxable real-property maintenance service, or a tax-free capital improvement?
It's taxable — pumping the water out keeps the landfill functioning, which is real-property maintenance, not a capital improvement. 110 Sand Company mines sand and gravel and also operates a landfill …
Are annual fees for a computer service that matches investors with businesses seeking capital a taxable information service, or exempt personal information?
Yes — the annual fees are a taxable information service, because the matching reports aren't the personal, confidential information the exclusion protects. Venture Capital Network (VCN) of New York, I…
Are construction materials that become part of real property owned by New York City or the Transit Authority — including land the Authority holds only by a permanent easement — exempt from sales tax?
Yes — materials that become integral components of real property of the Transit Authority or the City, including land the Authority holds under a permanent and perpetual easement, are exempt. Citibank…
Does computer-aided design and engineering equipment qualify for New York's research-and-development sales-tax exemption when it's used to develop more efficient production equipment?
It qualifies only to the extent it's used directly and predominantly (over 50% of the time) for genuine research, not ordinary design and drafting. Union Carbide Corporation produces atmospheric gases…
Is the flat monthly End-User Common Line (EUCL) charge on a phone bill subject to New York sales tax, or is it an exempt interstate charge?
Yes. New York Telephone Company asked whether the flat-rate End-User Common Line ('EUCL') charge it bills every subscriber — an FCC-mandated way to recover part of its cost of providing interstate acc…
A contractor working on a federal Department of Energy project rents equipment and claims it is the government's agent. Is the equipment rental exempt from New York sales tax?
No. Butler Mechanical, Inc. performs services at the federal West Valley Demonstration Project (run by West Valley Nuclear Services for the U.S. Department of Energy) and argued it was acting as the g…
Does someone selling a mail-order 'kit' that helps property owners challenge their tax assessments have to collect New York sales tax on it?
Yes. Linda and Ralph Spaulding sell a mail-order 'Taxbuster kit' to help property owners in the City of Troy challenge their tax-assessment increases; it contains an article and charts they wrote, a g…
Are receipts from licensing prepackaged (canned) computer software, and from the support contracts that go with it, subject to New York sales tax?
No, on these facts. Cognos Corporation licenses prepackaged (canned) software — a fourth-generation language called Powerhouse for the HP3000 — on magnetic tape, along with software support (telephone…
Does a paintball or 'survival game' operator have to charge sales tax on the admission to play, and on the equipment used in the game?
The admission to play is not taxable, but a separate charge for equipment is. Ralph M. Toscano Jr. asked about a 'survival game' — teams shooting CO2-powered non-toxic paint pellets on a playing field…
Is a local phone company's flat End-User Common Line (EUCL) charge taxable, or is it an exempt interstate charge?
Yes, it is taxable. Rochester Telephone Corporation, a local exchange carrier serving six counties in Western Central New York, asked whether the flat-rate End-User Common Line ('EUCL') charge it bill…
When does equipment a data-communications hardware maker buys for research and development qualify for New York's sales-tax exemption for R&D property?
It depends on how the equipment is actually used. Protocom Devices Inc. makes data-communication hardware and software (packet assemblers/disassemblers for X.25 networks) and asked whether the equipme…
A company builds window and floor displays of liquor products inside retail liquor stores and bills the distributor. Does it have to charge New York sales tax on that service?
Yes. Starlite Display, Inc. creates window and floor displays of liquor distributors' products inside retail liquor stores — arranging liquor bottles owned by the retailer, sometimes adding signs and …
Does a business have to charge New York sales tax for cleaning the carpeting and upholstery inside a customer's car?
No, not for the cleaning itself. Broome Steam Carpet Cleaning Inc. asked whether cleaning automobile carpeting and upholstery is subject to sales or use tax. Tax Law § 1105(c)(3) taxes maintaining, se…
Does a manufacturer owe New York use tax on its own products that its sales reps use as demonstration units before those units are eventually sold?
Yes. Datascope Corp. manufactures electronic medical monitoring equipment and asked whether compensating use tax is due on units it capitalizes and principally uses for demonstration by its field sale…
Are subscription newsletters exempt from New York sales tax as periodicals, and is a training video sold with them taxable?
The newsletters are exempt periodicals and their printing can be bought for resale, but the training video is taxable. R.C. Anderson Associates Inc. publishes two monthly subscription newsletters — th…
Can an aircraft that its owner uses more than half the time for its own corporate travel — and charters out the rest — qualify for New York's commercial-aircraft sales-tax exemption?
No. Stephen J. Epstein asked whether an aircraft used more than 55% of the time by its owner (a corporation or partnership) for corporate purposes, and chartered to others the rest of the time, qualif…
Are the monthly assessments a homeowners association charges to maintain common areas — including a tennis court — taxable as social or athletic club dues?
Yes. Stratford RP, Inc. created the Stratford Green Homeowners Association (a Not-for-Profit corporation) to own and operate a housing development's common property; membership and one vote are automa…
Does New York use tax apply to a tractor-trailer used in interstate and foreign commerce, and does the answer change if the owner is an out-of-state corporation with a New York place of business?
It depends on the trip's endpoints, not on whether the truck is in interstate or foreign commerce. Monroe Contractors Equipment, Inc. (a New York corporation) bought a tractor-trailer out of state, fi…
Does a recording studio that rents studio time and equipment to record-company producers qualify for New York's investment tax credit and sales tax manufacturing exemptions, or is it treated as a rental/service business?
No investment tax credit or employment incentive credit -- because more than half the actual mixing work is done by producers and engineers who aren't Sigma's own employees, Sigma is treated as rentin…
Does a sound-recording mastering lab qualify for New York's investment and employment tax credits, and are its production equipment, supplies, and electricity exempt from sales tax?
Mostly yes — the mastering lab is manufacturing, so it qualifies for the Article 9-A investment and employment credits and a sales-tax exemption for its production machinery, supplies, and production …
Does an amusement park with no gate fee have to charge sales tax on the tickets customers buy to go on individual rides?
No. Hoffman's Playland Inc. operates an amusement park with rides such as a ferris wheel and merry-go-round; there is no charge to enter the park, but each ride requires buying a specified number of t…
If a New Yorker buys a boat through an out-of-state corporation and leases it back, does New York tax apply — and what happens if the corporation is a sham?
New York tax applies either way. Ameire Ltd., a Delaware corporation whose sole shareholder is New York resident Marvin Arnold Pollack, bought a $227,574 boat in Florida (delivered in Delaware, no tax…
Are the yearly dues a homeowners beach-club association charges its members taxable as dues to a social or athletic club?
Yes. Pickwick at Rocky Point Beach Club, Inc. is a homeowners association that owns and maintains a beach facility on Long Island Sound; membership is required of every record owner of a lot subject t…
Does a record-mastering company -- which cuts master phonograph records and creates master tapes using its own employees -- qualify for New York's investment tax credit and sales tax production exemptions on its mastering equipment?
Yes -- because Frankford/Wayne's own employees (not outside producers) perform the actual mastering/manufacturing work, its mastering equipment, related environmental/gas systems, and mastering suppli…
If I live in one New York city but buy a boat in another, which city's sales tax rate applies?
The boat is taxed at the rate where it is delivered. Robert Cimillo, a Peekskill resident, bought a new boat in New Rochelle. Because New York sales tax is a destination tax — the point of delivery or…
If my company submeters and bills tenants for the electricity they use, am I a vendor that must collect sales tax — and do I owe tax on electricity I buy but don't resell?
Yes on both. Owners & Tenants Electric Company meters electricity for landlords, bills the tenants, collects the money (net of sales tax), and files sales tax returns for its clients. The Department h…
A contractor doing a job for a tax-exempt government agency buys sand to sandblast structures before painting, then leaves the used sand on site as fill. Is the sand exempt from sales tax?
No. Sullivan Humes Painting buys sand to sandblast structures before painting them under contracts with tax-exempt entities, and leaves the spent sand on site as fill. The Department held the sand is …
Equipment is taxed as real property under the Real Property Tax Law. Does that mean selling it is exempt from sales tax as a sale of real property?
Not necessarily. Consolidated Edison plans to sell installed transformers, network protectors, and vaults — items assessed as real property under the Real Property Tax Law — and asked whether that rea…
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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.