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 chemically cleaning and waterproofing a building's exterior a tax-exempt capital improvement or a taxable repair service?
Chemically cleaning and waterproofing a building's exterior to restore it is a taxable service of maintaining, servicing or repairing real property — not a tax-exempt capital improvement. Empire Resto…
Are the bags and boxes a beer wholesaler sells to retailers for sorting empty returnable containers taxable?
Bags and boxes a beer wholesaler sells to retailers for counting, sorting and returning empty deposit containers are taxable retail sales, and don't qualify for the packaging-materials exemption. Unde…
Does a temp agency owe sales tax on charges for supplying office, clerical, and lab personnel to clients?
Charges for supplying trained office, clerical, and laboratory personnel to clients are not subject to sales, use, or excise tax, because neither those services nor the service of providing personnel …
Are country-club membership fees taxable dues when membership is limited to residents of one apartment complex, even without member control?
A country club whose membership is limited to residents of a single apartment complex is a taxable social or athletic club — its exclusivity makes it one even without member control or ownership. The …
How is sales tax applied when a company rents equipment from its own subsidiary — for re-rental, for its own use, plus fuel and maintenance?
Equipment a company rents from its subsidiary to re-rent to customers is a purchase for resale (not taxable, with a resale certificate), but equipment it takes for its own use in exchange for maintena…
Are an oil producer's subcontracted well-pulling repair service, its bulldozers and snowmobiles, and the diesel fuel for those vehicles subject to New York sales or use tax?
An oil producer's subcontracted well-pulling work is a taxable repair service (though the State portion was later exempted for production equipment), and its bulldozers, snowmobiles and the diesel fue…
Are an oil producer's subcontracted well-pulling repair service, its bulldozers and snowmobiles, and the diesel fuel for those vehicles subject to New York sales or use tax?
An oil producer's subcontracted well-pulling work is a taxable repair service (though the State portion was later exempted for production equipment), and its bulldozers, snowmobiles and the diesel fue…
Are an oil producer's subcontracted well-pulling repair service, its bulldozers and snowmobiles, and the diesel fuel for those vehicles subject to New York sales or use tax?
An oil producer's subcontracted well-pulling work is a taxable repair service (though the State portion was later exempted for production equipment), and its bulldozers, snowmobiles and the diesel fue…
Does a membership swimming-pool operator owe sales tax on seasonal membership fees, and on separate charges for renting chaise lounges and lockers?
A membership swimming pool's seasonal fees are not taxable club dues, but its separate charges to rent chaise lounges and lockers are taxable. Because the operator has exclusive ownership and control …
Are a gas driller's site-prep and well-service vehicles taxable, and does use tax apply to a copy machine bought in Louisiana and moved to New York?
A gas driller's four-wheel-drive site-preparation vehicles and its equipment-carrying pickup trucks were taxable before an August 26, 1981 law change and exempt after, and a copy machine bought in Lou…
Must a health and fitness center collect sales tax on membership dues when members have no control, no proprietary interest, and there is no exclusivity?
A health and fitness center's membership charges are not taxable 'dues' because the center is not a social or athletic club — its members have no control over the club's activities, no proprietary int…
Are membership fees at an owner-operated country club taxable dues when the owner controls all activities and members have no proprietary interest?
Membership fees at an owner-operated country club are not taxable 'dues' because the club is not a social or athletic club — the sole owner controls all of its activities and the members have no propr…
Is a timely-delivery bonus a manufacturer receives from the end customer taxable when the customer bought the goods from a separate dealer?
A prompt-delivery bonus a furniture manufacturer receives directly from the end customer is not a taxable receipt, because the customer bought the furniture from a separate dealer — not from the manuf…
Are a racquetball club's membership dues and court fees taxable, and can tax it wrongly collected be credited to members instead of remitted to the State?
A racquetball club's membership dues and court-time fees are not taxable, but any sales tax it wrongly collected must be remitted to the State — it cannot be handed back to members as a credit. Becaus…
Are a health club's membership fees taxable, and what about its locker rentals and New York City's health-club tax?
A health club's membership fees are not taxable club dues, but its annual small-locker rentals are taxable, and New York City's 4% health-club tax applies to the facility charges. Because the members …
Are admission charges to an arts and crafts fair with sales, demonstration and exhibition areas subject to sales tax?
Admission charges to an arts and crafts fair with sales, demonstration and exhibition areas are taxable as charges to a place of amusement. Section 1105(f)(1) taxes admission charges to a place of amu…
When computing a shopping paper's advertising percentage, is the area of an inserted advertising supplement counted — after the Department's 1983 modification?
Not counted — this modification excludes the supplement's area. This is a MODIFIED Advisory Opinion that changes the Department's earlier opinion to the New York State Publishers Association, TSB-H-81…
Are a tenant's contractor-installed heating system, bathroom, plant foundation and water line capital improvements exempt from sales tax?
A tenant's contractor-installed heating system, bathroom, concrete plant foundation, loading platform and water line are capital improvements, so the charges to install them are not subject to sales t…
Must a club catering a member's party charge sales tax on a separately stated fee for musicians it arranged for the party?
A club that caters a member's private party must charge sales tax on the entire bill, including a separately stated charge for professional musicians it arranged for the party. Section 1105(d)(i) taxe…
Must a temporary-staffing agency collect sales tax on its billings when its workers perform taxable services under the customer's control?
A temporary-staffing agency generally does not collect sales tax on its billings when it merely supplies laborers who work under the customer's control, because the workers become the customer's 'spec…
Is the electricity that powers a frozen-drink (Slurpee) machine in a convenience store exempt as electricity used to produce goods for sale?
The electricity that powers a convenience store's frozen-drink (Slurpee) machine is not exempt as production electricity, so it is taxable. The machine makes a carbonated frozen drink, and the sale of…
Is the electricity that powers a mixer/cuber that makes a carbonated drink in a store exempt as electricity used to produce goods for sale?
The electricity that powers a store's mixer/cuber — a machine that combines syrup, carbon dioxide and water into a carbonated beverage sold in a cup — is not exempt as production electricity, so it is…
Is the electricity that powers an ice-maker serving a store's carbonated-drink machine exempt as production electricity?
The electricity that powers an ice-maker in a 7-Eleven store is not exempt as production electricity, so it is taxable. The ice cubes cool a mixer/cuber that makes a carbonated soft drink (and some ic…
Does a steel warehouse that cuts, shapes, drills and bends stock to order 'process' goods so its machinery qualifies for the production exemption?
A steel warehouse that cuts, shapes, drills, threads and bends stock steel to its customers' specifications is engaged in 'processing,' so the machinery and equipment it uses predominantly in that wor…
Is water sold through a filtering vending machine at a supermarket exempt as 'water delivered through mains or pipes,' or is it taxable?
Water sold through a self-service vending unit at a supermarket is taxable; it does not qualify for the exemption for water 'delivered to the consumer through mains or pipes.' Section 1105(a) taxes re…
Is a separately stated $1 handling fee on mail-ordered game tickets part of the taxable 'admission charge'?
A separately stated $1.00 handling fee charged on mail orders for university football and basketball tickets is part of the taxable admission charge and must be taxed. Section 1105(f)(1) taxes admissi…
Is installing a canvas awning a nontaxable capital improvement, or a taxable installation service?
Installing a canvas awning is not a capital improvement, so the awning company must charge sales tax on the full price for the awning and its installation. Section 1105(c)(3) taxes the service of inst…
At the end of an open-end vehicle lease, are extra charges (or refunds) for actual depreciation and maintenance subject to sales tax?
In an open-end motor-vehicle lease, extra charges billed at the end of the term for actual depreciation or maintenance that exceeded the amounts already paid are part of the taxable lease price and ar…
Is a stated 10–15% restaurant service charge taxable when it is labeled a gratuity and paid entirely to the employees?
A stated 10% or 15% service charge on a restaurant's bills is not subject to sales tax where it qualifies as a gratuity — meaning it is separately stated on the bill, specifically designated as a grat…
Does a contractor owe sales tax on construction equipment it rents to perform public-works contracts for the State and other government agencies?
A contractor that rents heavy construction equipment to perform public-works contracts for the State or other government agencies must pay sales tax on those rentals; the government's own tax exemptio…
In a manufacturer's audit: are cleaning tools and supplies exempt, are tenant HQ alterations capital improvements, does 'tax included' billing count, and can tax be refunded on property used out of state?
This four-part audit opinion holds: (1) naphtha, alcohol and wipers used to clean leather in manufacturing are 'tools' and 'supplies,' not exempt 'machinery or equipment' under § 1115(a)(12) — but und…
Are a tenant's animal-cremation units (removable trade fixtures) a capital improvement, and is the fuel used to run them taxable?
A tenant's animal-cremation units — set in concrete, vented through the walls and plumbed to the building's oil supply — are removable trade fixtures, not a capital improvement, so their installation …
Are a commercial fitness/tennis club's membership fees, court-time charges and room rentals taxable 'dues' of a social or athletic club?
A commercially run health-and-fitness and tennis club is not a 'social or athletic club,' so its listed charges — hourly and unlimited-summer court time, party-room rentals, and health-club, tennis, a…
Are customized market-research reports drawn from a common database a taxable information service, or 'personal or individual in nature' and excluded?
Customized market-research reports that track warehouse movements of goods — built from a common database but formatted to each client's needs — are a taxable information service, because they don't m…
Is a supplier's discount that applies only if the buyer pays within a set time a nontaxable trade discount, or a taxable early-payment discount?
A supplier's discount that applies only if the buyer pays within a set number of days is an early-payment (cash) discount, not a trade discount, so it cannot be deducted from the taxable receipt — eve…
For a publicity-booklet producer: which production inputs are exempt, are out-of-state deliveries taxed, is a clipping service resale, and when are charges to charities exempt?
For a company that produces publicity booklets and sends them to newspaper editors, this opinion resolves four issues. (1) Because it manufactures booklets for sale, its production inputs — artwork, s…
When a supplier places coin-op video games in a store and splits the money, who owes sales tax — the store owner, the supplier, or on the game play?
When a video-game supplier places coin-operated machines in a store, maintains them, and each month splits the receipts 50/50 with the store owner: (1) the game-play receipts are not subject to sales …
Can a federal cost-plus-fixed-fee contractor buy materials tax-free by invoking the government's immunity, when title passes to the U.S.?
A federal cost-plus-fixed-fee contractor cannot buy materials tax-free just because title passes to the United States; its purchases are taxable unless they truly qualify as purchases for resale. Sect…
Is a tenant's installation of a fire-sprinkler system a nontaxable capital improvement to the leased real property?
A tenant's installation of a fire-sprinkler system in its leased premises is a capital improvement, so the charge for installing it is not subject to sales or use tax. Under the three-part test in § 1…
Must a company that isn't in the car business collect sales tax when it occasionally sells a company car to an employee or outsider?
A company that occasionally sells its company cars to employees or outsiders must collect and remit New York State and local sales tax on those sales, even though it isn't in the business of selling c…
Can an advertising agency buy materials tax-free by relying on its exempt client's status, when it isn't the client's designated purchasing agent?
An advertising agency must pay sales tax on materials it buys to perform a client's contract, even when the client is a tax-exempt organization, unless a true purchasing-agent relationship makes the c…
Is natural gas used to control a furniture plant's humidity and temperature exempt as used 'directly and exclusively' in production, when the heat also keeps employees comfortable?
Natural gas a furniture maker uses to control plant humidity and temperature is used 'directly' in production, but only the portion used exclusively for production is exempt — so gas that also serves …
When a business sells food and drink and is paid in Canadian currency, what amount is the sales tax figured on, and how must it be remitted?
When a business sells food and drink and is paid in Canadian currency, the sales tax is figured on the US-dollar value of that Canadian money at the time it is delivered to the business — not on the f…
For flowers ordered through a florists' wire service, which florist collects the sales tax and at what rate, when the sending or receiving florist may be in another state?
For flowers ordered through a florists' telegraphic or telephonic delivery association, the florist that TAKES the order from the customer collects the sales tax, at the combined state and local rate …
Is a tenant's installation of a fire-sprinkler system in leased premises a nontaxable capital improvement to real property?
A tenant's installation of a fire-sprinkler system in its leased premises is a capital improvement, so the charge for the installation is not subject to sales or use tax. The Department applied the th…
When a mobile-home manufacturer gives dealers a price reduction, is the sales tax based on the reduced price, and can tax already charged on the full price be refunded?
A manufacturer's price reduction lowers the sales tax only if it actually reduces the taxable price on the invoice. Here Titan Homes cut each mobile home's price by $1,000. Under Method #1 the reducti…
For a mobile-home manufacturer's sales to dealers, which discounts reduce the taxable receipt, and are transportation charges taxable?
The type of discount decides whether it reduces the sales tax. Trade discounts and volume discounts represent a reduction in the selling price, so they are deductible and the manufacturer should not c…
Can a mobile-home dealer get a refund of the difference between the tax it paid the manufacturer and the tax that would apply in its customer's county?
A mobile-home dealer cannot get a refund simply because it sold a home to a customer in a New York county with a lower tax rate than the dealer's own county. When a dealer buys homes from a manufactur…
Is a sandpit operator's charge for letting a customer dump clean fill at the excavation site subject to New York sales tax?
A charge for allowing a customer to dump clean fill at an excavation site is not subject to New York sales tax. New York taxes only the services it specifically lists (enumerated services) under § 110…
When a tenant installs a private telephone system, which components are nontaxable capital improvements and which parts (and the custom software) remain taxable?
A tenant's private telephone system is taxed component-by-component. Only the parts that become part of the real property are a nontaxable capital improvement: the lines run through the walls and ceil…
Is a subcontractor's back-hoe excavation taxable, and does it matter whether the prime contractor is doing a repair or a capital improvement?
Whether a subcontractor's back-hoe excavation is taxable turns on the end result of the prime contractor's work, not on who owns the property. If the prime contractor is repairing real property (e.g.,…
Are advertising-printed envelopes used to mail promotional material out of state, but mailed from New York, subject to New York sales or use tax?
Envelopes used to mail promotional material to out-of-state recipients are subject to New York sales or use tax when they are mailed from a New York location. The envelopes are 'used' in New York the …
Can a gas supplier buy cryogenic converters tax-free as production equipment when its customers, not the supplier, use them to make products for sale?
A gas supplier can buy cryogenic converters without paying sales tax when the converters are bought solely to be used, by the supplier's customers, directly and predominantly in producing tangible per…
Are a foundry's charges for storing customers' pattern equipment a taxable storage service, or a nontaxable lease of real property?
A foundry's charges for storing its customers' pattern equipment are a taxable storage service under § 1105(c)(4), not a nontaxable lease of real property. Section 1105(c)(4) taxes the service of stor…
How is an amusement park taxed on its ride-lease payments, its Pay-One-Price admissions, and its various concession arrangements?
An amusement park's Pay-One-Price admission (a single fee for entry plus unlimited rides) is a taxable admission charge under § 1105(f)(1), taxable in its entirety even though some visitors, once insi…
When a corporation buys a boat to bareboat-charter it, when can it buy tax-free, and can it shift the tax to the charterer's use tax?
A corporation can buy a vessel tax-free for resale only if the bareboat charter is a true arm's-length rental — the charter fee must be reasonable versus comparable vessels and fairly reflect acquisit…
Does a harness-racing program qualify as a tax-exempt newspaper or periodical, or is it taxable?
A harness-racing program does not qualify as a tax-exempt newspaper or periodical, so its retail sale is taxable. Section 1115(a)(5) exempts newspapers and periodicals, and § 528.6 requires (among oth…
Are capital-fund-drive contributions that give donors priority to buy season tickets 'admission charges' subject to sales tax?
Capital-fund-drive contributions that only give a donor priority or the right to buy season tickets — at the same price everyone else pays — are not taxable 'admission charges.' Section 1105(f)(1) tax…
Must an amusement park pay sales tax when it rents coin-operated amusement devices and when it buys amusement rides?
An amusement park owes sales tax both on its rental of coin-operated amusement devices and on its purchase of amusement park rides — neither is a tax-free purchase for resale. Because payments for ope…
Can a paving contractor buy materials tax-free when it repaves state and municipal roads, even though it works as a subcontractor for a private utility?
A contractor can buy paving materials tax-free when the materials become an integral component part of real property owned by an exempt entity — here New York State and municipal roads — even though t…
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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.