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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Does a customer's capital improvement certificate relieve an equipment supplier of the duty to collect New York sales tax, and who is liable if the customer won't pay?
No — a capital improvement certificate does not relieve the supplier, and both the supplier and the customer are liable if tax goes uncollected. Superior Restaurant Equipment sells commercial kitchen …
Are charges for hot air balloon rides subject to New York sales tax, and can a balloon operator get back tax it mistakenly remitted?
The rides aren't taxable if the operator keeps control of the balloon, but a refund depends on the operator's records. 1000 Island Balloon Co. asked whether its $75 hot air balloon rides are taxable a…
Is a modular home a 'mobile home' for New York sales tax, and who collects or pays the tax when it's sold and installed?
A modular home is not a 'mobile home,' and who owes the tax depends on who installs it. Affordable Homes, a mobile-home dealer starting to sell modular homes, asked three things. First, the home doesn…
Are building materials and installation labor for a project financed by an Industrial Development Agency exempt from New York sales and use tax?
Exempt. Casabonne Bros., a contractor, asked how far the sales and use tax exemption reaches on a structure partly funded by an Industrial Development Agency (IDA). Because General Municipal Law § 874…
Which of a meat market's prepared foods are taxable, and which are exempt off-premises food-store sales?
Arranged platters are taxable; the other prepared foods are exempt only if sold unheated, in food-store form. Cobbs House of Meats sells baked stuffed potatoes, quiche, TV-style dinners, cold soups, s…
Are 'suggested donations' a religious organization collects for meals taxable as sales of food and drink?
Yes — the 'donations' were really payment for the meals and are taxable. The SYDA Foundation, a 501(c)(3) religious organization, served meals alongside its daily services and solicited 'voluntary don…
Can a pay-phone operator buy phone service for resale, must it collect tax on per-call charges, and are commissions it pays taxable?
The operator buys phone service for resale, collects tax on the full call charge, and its commissions aren't taxable. Coinven installs pay telephones in restaurants and bars, buys telephone service fr…
Must a national charity collect New York sales tax on mail-order sales shipped into the state, and does it need to register as exempt first?
It must first establish exempt status; once recognized, its mail-order sales aren't taxable shop/store sales. The National Wildlife Federation, a 501(c)(3) charity, sells a limited range of products (…
Are labor charges billed under a fleet maintenance agreement taxable service, or exempt employee wages, when the mechanics are on the customer's payroll?
Taxable — the labor is a maintenance service, not exempt employee wages. Coca-Cola Bottling of New York kept auto mechanics on its own payroll but made them available to Soft Drink Leasing Corporation…
How is a New York printer/mailer taxed on promotional mailings, and what proof lets it exclude out-of-state pieces?
Printed promotional material is taxed by destination, and the printer can exclude out-of-state pieces only with substantiating records. George Silver, a printer and mailer, produces labels from custom…
Does a sales agent who only arranges orders have to report the sales or collect New York tax on drop-shipped goods?
An agent who only arranges orders isn't the vendor, but must make sure suppliers collect tax on New York deliveries. Edna Jacobs, d/b/a Industrial Sales, takes phone orders for appliances and places t…
Is installing a satellite dish antenna a tax-exempt capital improvement, or a taxable sale and installation?
The dish and its installation are taxable; only the concrete foundation is a capital improvement. Multi-View Communication installs satellite dish TV antennas that are welded or otherwise attached to …
Does a nonprofit service club have to collect New York sales tax on candy it sells to fund charitable work?
Yes — the club must collect sales tax on its candy sales. The West Seneca Lions began selling candy mints around West Seneca, with the proceeds going to a Project Fund that helps the blind, disabled a…
Is renting a self-service storage unit a taxable storage service or a tax-exempt lease of real property?
Exempt — a self-service unit is a lease of real property, not a taxable storage service, if it meets the tests. The Storage Shed leases specific numbered, enclosed spaces (e.g., 10' x 10') that tenant…
Must an out-of-state catalog seller that has retailers, employee visits, and trade-show activity in New York collect New York sales tax on its mail-order sales here?
Yes — the out-of-state catalog seller has nexus with New York and must collect New York sales and use tax on its retail mail-order sales to New York customers. The Orvis Company, a Vermont seller of h…
Is an architectural model maker's charge a non-taxable service or a taxable sale of tangible personal property?
Taxable — the whole charge is a sale of tangible personal property, not a service. Awad Architectural Models builds three-dimensional models from architects' drawings; roughly 90% of its work is desig…
In a leased-department arrangement where the host store collects the money, who is responsible for the sales tax?
The host store (licensor) reports and remits the tax, but both it and the licensee are jointly liable. Peter Knych holds a license to sell goods he buys from an unrelated third party at a host busines…
Do I owe sales tax on the fee I pay my equipment lessor to cancel a lease early and get released?
Yes — the early-termination fee is taxable. Robert L. Goodrich and Bruce A. Sahs (R.L. Goodrich & Company) lease computer equipment under a seven-year lease at $1,169 a month plus sales tax and now wa…
Does a gas utility charge sales tax on new gas-service hookups, and does it owe tax on the pipe and materials it installs?
The utility must collect sales tax on new gas-service installation charges, and it owes sales or use tax on the pipe, fittings, tools and supplies it buys. Syracuse Suburban Gas Company installs new s…
Are student textbook purchases paid for by government grants like PELL or VA exempt from sales tax as sales to the government?
Taxable — the grant-funded textbook sales are subject to sales tax. Erie Community College's bookstore sells textbooks to students who receive aid from PELL, the Trade Readjustment Act, the Veterans A…
When related companies move equipment between each other, is it a taxable sale — and does it matter that no money changes hands?
It depends on how the transfer is structured. Browning-Ferris Industries owns majorities of many related subsidiaries and asked whether moving tangible property between them — with no money changing h…
If I drop-ship goods into New York for an out-of-state buyer who can't give a New York resale certificate, do I have to collect New York sales tax?
Yes — the vendor must collect New York sales tax on a drop-shipment delivered into the state. Touche Ross asked about an importer (X Company, a registered New York vendor) that sells goods in Californ…
When a taxicab is leased with its city license, can the separately stated charge for the license be left out of sales tax?
The taxicab license charge is a registration fee, not a separately exempt intangible, and it fits into New York City's 90 percent rental computation. The Metropolitan Taxicab Board of Trade's members …
Is the fee for a video club membership that gets me cheaper movie rentals subject to sales tax?
Yes — the video club membership fee is taxable. Douglas J. Fideor (Village Mall Video) asked whether a one-year video club membership — which lets a member rent movies at a lower rate — is subject to …
Are welding supplies used to maintain production machinery exempt, and do voltage transformers count as exempt production equipment?
Welding supplies used to maintain production equipment qualify for the § 1105-B reduced (0% after March 1, 1981) state rate, but the transformers do not get the production exemption. Gernatt Asphalt P…
Is a landlord's separate charge to a commercial tenant for heated and chilled water used to heat and cool the space taxable?
Taxable — the landlord's charge for heated and chilled water is taxable as steam and refrigeration service. Robert M. Markham, P.C., a prospective New York City tenant, asked whether a landlord's sepa…
Is a central coolant and chip-handling system for metal-cutting machines exempt production equipment, and how is its foundation and installation labor taxed?
The coolant/chip handling system itself is exempt production equipment, but its foundation materials are taxable and its assembly and installation labor fall under the § 1105-B reduced (0% after March…
Is a nonlawyer service that fills out and files uncontested-divorce forms for clients subject to sales tax?
Not taxable — the divorce-form preparation and filing service is not subject to sales tax. Bonnie Herde (Divorce Yourself) helps people get uncontested divorces by filling out legal forms from informa…
Is pizza sold unheated for takeout taxable, or does it fall under the exception for unheated food commonly sold in food stores?
The unheated pizza is taxable unless the vendor can prove it is of a type commonly sold, in the same form and packaging, in food stores such as bakeries — and each selling method must qualify separate…
Is a machine that recycles foundry sand for reuse in manufacturing exempt as production equipment?
The sand reclamation unit is not exempt as production machinery under § 1115(a)(12), but it qualifies for the § 1105-B statewide exemption if purchased on or after March 1, 1981. Buffalo Forge Company…
Does a video-rental 'membership fee' that only entitles the customer to discounted rentals count as a taxable prepayment for those rentals?
Yes — the membership fee is taxable, reversing the earlier opinion going forward. This 1985 modified opinion corrects TSB-A-81(20)S, issued to Norman Eiger in 1981, which had held that a video-rental …
Which mail-room services are taxable, and does the mailer owe tax on the folding and postage machines it buys?
Addressing (label-affixing) is taxable, but folding, inserting, sealing, collating and posting are exempt if separately stated — and the mailer owes tax on the mail-room machines it buys for its own u…
Is the cost of printing a free advertising-only paper taxable, and are ad fees or subscriber postage charges taxed?
An advertising-only publication is not a tax-exempt newspaper or periodical, so the printing that produces it is taxable — but the advertising revenue is exempt and subscriber 'handling' charges are t…
Is the charge for occupancy in a convalescent home, plus separately billed telephone and air conditioning charges, subject to New York sales tax?
No — the convalescent home's occupancy charges are not subject to sales tax, and the separately billed telephone and air conditioning charges are exempt as well. New York's hotel occupancy tax (Tax La…
Are charges for the use of tanning beds and hot tubs subject to New York sales tax?
It depends on location. Statewide, charges for the use of tanning beds and hot tubs are not subject to New York State or county sales tax — using these facilities is neither a retail sale of tangible …
Do the food and supplies a company buys to raise dogs and ferrets for sale qualify for New York's manufacturing or production exemptions from sales tax?
No — the food and supplies are taxable. Marshall Research Animals raises beagles and ferrets in closed breeding colonies and sells them, and it wanted its feed and similar supplies exempt under the pr…
Does a contractor on an Industrial Development Agency project owe sales tax on the materials, equipment, and supplies it buys for the work?
It depends on whether the contractor is a designated agent of the IDA. An Industrial Development Agency is a tax-exempt public corporation (Tax Law 1116(a)(1); 20 NYCRR 529.2), but a contractor is nor…
Can an out-of-state seller with no New York presence cancel a sales tax registration it took on voluntarily?
Yes — the out-of-state seller may cancel its voluntary registration, because it is not otherwise required to collect New York tax. V. H. Blackington & Co., a Massachusetts manufacturer of uniform insi…
Can a store discard its detailed cash register tapes and keep only daily sales summaries?
No — daily cash register summaries are not an adequate substitute; the detailed cash register tapes must be kept. A CPA, Daniel Goldberg, asked on behalf of a client that makes only taxable sales whet…
Is a transfer of trucks and equipment to a corporation in exchange for its stock tax-free as an organizational transfer, when it happens long after the corporation was formed?
No — the transfer is a taxable retail sale, not a tax-free organizational transfer. New York excludes from 'retail sale' a transfer of property to a corporation upon its organization in exchange for i…
Must an out-of-state catalog seller with New York retailers and employee visits collect New York sales tax on its mail-order sales here?
Yes — the out-of-state catalog seller has nexus with New York and is a vendor that must collect New York sales and use tax on its retail mail-order sales to New York customers. The Orvis Company, a Ve…
Is the admission charge to play a paintball 'survival game' — including the equipment used — subject to New York sales tax?
The admission charge to participate is not taxable, but separately sold extra supplies are. Charging patrons to play a paintball 'survival game' is an admission to a facility for a sporting activity i…
Is the single admission-and-equipment charge to play a paintball 'survival game' taxable, and what about a free t-shirt given to the winner?
The admission to play is not taxable, and the free winner's t-shirt is not taxed to the player, but the operator pays tax on both the equipment and the shirts. Charging a single fee to play a paintbal…
How is a vehicle lessor taxed on the diesel fuel and the various lease charges when it supplies fuel as part of the rental?
When a vehicle lessor supplies diesel fuel as part of the lease, it is treated as consuming its own fuel, and all its lease charges are taxable receipts. Because the lessor stores and dispenses diesel…
Must a college 501(c)(3) faculty-student association collect sales tax on admissions to the theatrical, athletic, recreational, and social events it holds to raise funds?
Mostly exempt, but athletic-event admissions are the key exception. The Jamestown Community College Faculty-Student Association is an IRC 501(c)(3) educational organization, presumed to qualify as a N…
When a gas utility transports natural gas that a customer or producer already owns or has under contract, under New York's 'contract carriage' program, do the utility franchise tax, the gross-income utility tax, MCTD surcharges, and sales tax apply to the fees the utility charges for that transport service?
The franchise tax under Section 186 applies to all contract-carriage fees as gross earnings. The gross-income tax under Section 186-a applies differently depending on the arrangement: if the utility i…
Can a seller get a sales tax refund or credit for a bad-debt loss when a third-party-financed sale defaults and it repossesses the property?
No — the seller gets no sales tax refund or credit for that bad-debt loss. Heavy Duty Truck Parts sold trucks whose buyers financed through a finance company, with the seller sometimes acting as guara…
Are admission tickets to a music venue exempt as dramatic or musical arts, or taxable as a cabaret because it serves food and drink?
The admission charges are fully taxable as cabaret charges, not exempt as dramatic or musical arts admissions. Tralfamadore Cafe presents live music (Melba Moore, Kris Kristofferson, Stan Getz and oth…
Does a batting-cage operator charge sales tax on batting-practice fees, on bat/helmet rentals, and does it owe tax on the pitching machines?
Batting-practice fees are exempt, but equipment rentals are taxable and the operator owes tax on its machines. Charging customers to use pitching machines for batting practice is a charge for a partic…
Are a distributor's sales of candy to schools and PTAs that resell it for fundraising exempt from sales tax?
It depends on whether title passes to the fundraising organization, and tax applies unless the distributor gets a proper certificate. Miss Chocolate Company sells confectionery to groups like schools …
Is equipment a gravel plant rents from a related corporation to assemble the plant exempt as production machinery, and is the related-party rental taxable?
Equipment used directly to assemble the plant may qualify for the production exemption, but the related-corporation rental is still taxable. Gernatt Asphalt, a gravel producer, rented welding and eart…
Is a country club's separately stated mandatory monthly gratuity charge taxable as club dues, even the portion paid to employees?
Yes — the mandatory monthly gratuity charge is taxable club dues, and the food-and-drink gratuity exclusion does not help. Park Country Club is a 'social or athletic club' because its members control …
Are hostess personal-service fees taxable when charged by an establishment that also sells beverages?
Yes — the hostess personal-service fees are taxable, along with the beverage sales. WHK Restaurant Corporation sells alcoholic and non-alcoholic beverages and charges patrons a personal-service fee fo…
If a bulk-sale purchaser defaults and returns the business assets to the seller in lieu of foreclosure, is she released from liability for the seller's unpaid sales taxes?
No — returning the business assets did not cancel the sale, and the purchaser remains liable for the seller's unpaid sales and use taxes under the bulk-sale rules. Susan Jane Jankowski bought a bar an…
Is a customer's purchase order marked 'tax exempt' enough to support an exempt sale, or must the customer give the vendor a properly completed exemption certificate on the prescribed form?
A customer's purchase order marked 'tax exempt' is not a valid exemption certificate — the vendor should collect tax unless the customer furnishes a properly completed certificate on the form the Tax …
Must an out-of-state computer seller with no office, employees, salespeople, or advertising in New York collect New York sales tax on computers shipped to New York buyers?
No — as described, the out-of-state seller has no obligation to collect New York sales tax, because it neither maintains a place of business nor solicits business in New York; but its New York custome…
How is a charter fishing/hunting 'package deal' taxed — item by item — and what happens if the whole trip is billed as one flat fee?
It depends on how the bill is written: itemize, and each part is taxed under its own rule; charge one flat fee without separating the parts, and the entire fee is taxable. Outdoor Pursuits, Inc. arran…
Is the sale and installation of a wood or coal burning stove — and its chimney and masonry — a tax-exempt capital improvement to real property?
The stove itself and its installation stay taxable, but the permanent masonry work — a brick chimney, fireproofing, and concrete base — is an exempt capital improvement; a metal chimney depends on how…
May a prepared-food seller accept resale certificates instead of collecting sales tax, and credit its customers' remitted tax against its own liability?
No — there is no resale exemption for prepared food taxed under 1105(d), so accepting resale certificates was improper and the seller owes the tax it failed to collect; it cannot simply credit its cus…
Are the membership dues of a public beach club taxable as dues of a 'social or athletic club,' when a permanent-member board can override the elected members' committee?
Yes — the beach club is a 'social or athletic club' and its membership dues are taxable, because the members control the club's activities through an elected governing committee. The Silver Gull Club,…
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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.