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 newspaper distributor pay sales tax on the twine, strapping, and wire it buys to bundle newspapers for delivery to dealers?
No. A newspaper distributor can buy the twine, strapping, and wire it uses to bundle newspapers for delivery without paying State or local sales tax. Tax Law § 1115(a)(19) exempts cartons, containers,…
When a design firm bills a 'design fee' plus reimbursed expenses for producing annual reports, is sales tax charged on the whole bill or just the design work?
The whole bill. A firm that designs annual reports and delivers printer-ready designs is making a retail sale of tangible personal property, so its sales tax is based on the entire amount the customer…
Does a company that sells blank printed flight-plan forms to pilots have to collect sales tax on them?
Yes. A company that designs, has printed, and sells blank flight-plan forms to pilots must collect New York State and local sales tax on them. The forms are tangible personal property, the pilots do n…
Are telecommunications devices for the deaf (TDD/TTY) that convert telephone and teletype signals exempt from New York sales tax?
They are exempt. Telecommunications devices for the deaf (TDD or TTY) — used with a conventional telephone to convert between telephone and teletype signals so a hearing-impaired person can communicat…
A trash-removal company charges customers separately for containers. Does it pay sales tax when it buys those containers, or are they bought for resale?
The containers are bought for resale — no tax on the hauler's purchase. A commercial trash-removal company that charges a separate fee for supplying containers (based on container size) is treated as …
When a printer produces magazines or sports programs for (or on behalf of) a tax-exempt organization, which of its purchases and sales are taxable?
It depends on which purchase or sale you mean. A printer producing magazines or sports programs — whether contracting directly with a tax-exempt organization or with a corporation acting for it — can …
Can a not-for-profit golf club buy topsoil, seed, fertilizer, and chemicals tax-free by arguing they are 'resold' to members through their dues?
No — those purchases are taxable. A not-for-profit golf club must pay sales tax on the topsoil, seed, fertilizer, and chemicals it buys to maintain its course. The materials are not resold 'as such or…
Are 'ad slicks' a retailer buys to send to newspapers exempt from sales tax as production machinery and equipment?
Yes, they qualify for the production exemption — except for New York City tax. Ad slicks a retailer buys and then mails to newspapers to print its advertisements are exempt from sales and use tax unde…
Does a gas utility owe sales tax when it reimburses a city's contractors for taking precautions to protect its gas mains during city capital improvement work?
No — those reimbursements are not taxable. When a gas utility reimburses a city's construction contractors for precautions they take to protect the utility's gas mains — using caution generally, subst…
Is a health-fitness center a taxable 'social or athletic club,' and which of its membership fees, dues, and service charges are subject to sales tax?
The center is not a taxable social or athletic club, so its membership fees and club dues are not taxed — but several of its other charges are. Because members do not control the center's activities, …
Can a company's responsible officer discharge in bankruptcy the interest on the company's unpaid sales tax, or does interest survive along with the tax?
The interest survives — the responsible officer remains liable for it. A former sole officer, director, and shareholder of a bankrupt corporation, who concedes she owes the company's unpaid sales tax,…
Does a bed-and-breakfast booking agency that places guests in private homes and collects the room charges have to register and collect hotel occupancy sales tax?
Yes — the agency must register and collect sales tax on room rent. A 'bed and breakfast' booking agency that contracts with about 50 hosts, offers their spare rooms to the public for transient lodging…
Are canopies and kiosks a contractor installs at a gas station a nontaxable capital improvement, or taxable — and does it matter whether the customer owns or rents the land?
It depends on whether the customer owns or rents the land. When a contractor installs service-station canopies and kiosks (sunk in concrete footings, removable only with jackhammers) for the owner of …
Does a firm owe sales tax when it routes a Canadian customer's calls through its Buffalo switch and analyzes the calling data to give confidential efficiency advice?
No sales tax is due on the package. A firm that lets Canadian customers connect their phone lines to its Buffalo switching equipment to place calls to the United States is providing telephony service …
When one bus company hires buses with drivers from another, is that a taxable equipment rental or a nontaxable transportation service?
It turns on who controls the routes — dominion and control decides rental vs. service. When a bus company hires buses with drivers from another carrier, a taxable rental exists if the hiring company d…
Does a gas utility charge sales tax on gas it sells to Seneca Nation members who live on their reservation?
No — those sales are exempt. Gas and gas service sold to individual members of the Seneca Nation who live on the Cattaraugus or Allegany Reservations, for use on the reservation, are not subject to Ne…
Is a machine that makes tailpipes exempt production equipment when the tailpipes are installed in customers' cars rather than sold separately?
No — the machine is taxable. A service station's machine that bends and shapes pipe into tailpipes does not qualify for the § 1115(a)(12) production exemption, because its output is not produced 'for …
Can an R&D company buy a computer tax-free as research equipment when most of the computer's actual running time is spent on financial and administrative work?
No — the computer's purchase is taxable. The § 1115(a)(10) exemption for property used 'directly and predominantly in research and development' requires, under 20 NYCRR § 528.11(c), that the item be u…
If a recording studio leases sound and recording equipment from a supplier and then re-rents it to studio customers, does the studio owe sales tax on the equipment lease it pays to the supplier?
No — the equipment leases the studio pays to its supplier are not taxable. Because the studio re-rents that same sound and recording equipment to its customers for a consideration, a 'rental' is itsel…
How does a hardware store know when a sale to a farmer is tax-exempt, and are cash-register totals enough recordkeeping for exempt sales?
Use exemption certificates and item-level records. A hardware store may sell farm property tax-free only when the farmer gives it a properly completed Farmer's Exemption Certificate (Form ST-125): § 1…
Are shipping cartons taxable when a company buys them, packs its own products in them, and ships them out of state where the cartons are discarded and never given to its customers?
Yes — the shipping cartons are taxable. Section 1105(a) taxes retail sales of tangible personal property delivered in New York, and these cartons were delivered to the company in Buffalo. The § 1115(a…
Must a printer collect sales tax when it separately bills its customers for typesetting and plates that become the customer's property after a printing job?
Yes — the printer must collect tax on the typesetting and plates. When the typesetting and plates become the customer's property, the printer has made a retail sale of tangible personal property under…
Are packaging materials taxable when a company uses them to box up aircraft components it has overhauled and ships them back to the customer?
It depends on whether the overhaul the packaging serves is a taxable service. The company's aircraft-component overhauls are taxable repair services under § 1105(c)(3) — except overhauls of components…
When a racetrack sells one ticket covering both the horse races and a closed-circuit TV showing of an out-of-state boxing match, is the extra charge for the TV event a taxable admission?
Yes — the extra charge for the closed-circuit television showing of the boxing match is a taxable admission. Section 1105(f)(1) imposes the State's 4% tax on admission charges over ten cents to a plac…
Is the electricity a company uses to package finished, imported parts in blister packs and bags exempt as electricity used in 'manufacturing'?
No — packaging is not 'manufacturing,' so the electricity used to do it is not exempt. The company imports finished electronic parts and packages them in blister packs, plastic bags, and containers fo…
Does a 'safe harbor lease' sale-leaseback trigger New York sales tax when it is done only to shift federal tax benefits and the offsetting monthly payments leave neither party economically changed?
It depends on whether title or possession actually moves. In a 'safe harbor lease' sale-leaseback under IRC § 168(f)(8) — entered only to shift federal tax benefits, with substantially offsetting mont…
When a shopping mall straddles a city and county line, which state and local sales taxes do its stores collect — and what controls when delivery happens elsewhere or a store itself sits on the line?
It depends on where each store — and each delivery — sits. The State's 4% sales tax applies to all mall sales. Herkimer County and Oneida County impose no local sales tax, so stores on the Herkimer si…
Are a beach club's separately billed cabana rentals taxable as club 'dues,' or are they untaxed rentals of real property?
No — the cabana rentals are not taxable. Although dues paid to a social or athletic club are taxed under § 1105(f)(2), the separately billed charge for renting a cabana is not a 'due' under § 1101(d)(…
Are a beach club's cabana rentals taxable as club 'dues,' and does it matter that some cabanas have no plumbing?
No — the cabana rentals are not taxable, whether or not the cabana has plumbing. Charges for renting the club's cabanas are not 'dues' to a social or athletic club under §§ 1105(f)(2) and 1101(d)(6); …
Can a legal publisher buy the statutes, court reports, and periodicals it researches tax-free — as resale, research materials, information services for resale, or production supplies?
Generally taxable — the Department rejected all four exemption theories, though a separate newspaper-and-periodical exemption may still cover some items. Lawyers Co-operative buys statutes, court repo…
Are an ad agency's purchases of photography and artwork taxable when the agency incorporates them into camera-ready mechanicals it sells to its clients?
No — the photography and artwork are not taxable, and no use tax applies. The ad agency buys artwork and photography and incorporates it into camera-ready mechanicals that it sells to its clients. In …
If a lessor buys mass-commuting vehicles to lease to the exempt MTA with a nominal purchase option, is any sales, use or excise tax due on the purchase, the lease, or the buyout?
No tax at any step. The Metropolitan Transportation Authority asked about a financing structure in which a private lessor buys mass-commuting vehicles and leases them to an exempt public entity (the M…
Can a precast-concrete maker that sells more than half its product already installed claim New York's production exemptions on its machinery and its fuel?
The machinery exemption is denied, and only part of the fuel qualifies. Midstate Precast Systems makes precast concrete 'wideslab.' Because more than 50% of its wideslab is sold on an installed basis,…
Are a record company's master sound tapes, used to make records and cassettes for sale, exempt production machinery — and does the New York City tax still apply?
Exempt from the State (and non-NYC local) tax, but not the New York City tax. Polydor, Inc., a major record company, asked whether its purchases of master sound tapes (useful life over one year) from …
Does a state prison have to collect sales tax on meals sold to employees through a non-profit inmate food-service training program?
Yes — the meals are taxable, and so are vending-machine sales over ten cents. Section 1105(d) taxes receipts from food and drink sold in restaurants, taverns, or 'other establishments,' and the meals …
How is New York sales tax handled on films leased to TV networks — where delivery controls tax, whether split in/out-of-state broadcasts reduce the base, and which production purchases are exempt?
Leasing films is a taxable sale keyed to where the film is delivered, and the full lease price is taxable even when the broadcast reaches viewers outside New York. A lease is a 'sale' (§ 1101(b)(5)), …
Is a photographer's separately billed 'rush service' charge — for speeding proofs to the customer for approval — taxable, or is it an excluded delivery charge?
Taxable — the 'rush service' charge is part of the taxable receipt from the sale of the photographs. Under § 1101(b)(3) and 20 NYCRR 526.5(e), all expenses a vendor incurs in making a sale are part of…
When a company sells modular homes, is sales tax figured on the full selling price or only on the cost of the materials used to build them?
On the full selling price — not the cost of the materials. The company sold modular homes wholesale and uninstalled, and had been collecting tax on a base equal to only 62% of the selling price (its p…
Does a manufacturer owe sales tax when it buys a service contract that it passes through, as part of the product's price, to the end user?
No — the manufacturer's purchase of the service contract is not taxable, because it buys the contract for resale. A maintenance or service contract on tangible personal property is itself a taxable pu…
Does the sales tax on club dues apply to a refundable security deposit that a country club requires members to pay to protect it against loss or damage?
Yes — the security deposit is taxable as dues. Lancaster Country Club asked whether the sales tax on club dues applies to a security deposit it collects to protect the club against loss, damage or inj…
Is a service that helps students find college scholarships, grants and loans by running their data through a computer and giving them a printout of funding sources a taxable information service?
Yes — it must collect sales tax. Roger S. Farber (RSF & Associates) ran an academic-guidance service that took a student's profile, ran it through a computer analysis, and produced a printout of the c…
Is the admission charge at a live-music club that also has a bar and serves food in the same room subject to New York sales tax as a cabaret charge?
Yes — the admission charges are taxable. My Father's Place, a live-music venue in Roslyn, presented advertised performers on a stage while a bar operated in the same room and food was available (thoug…
Must a trash-removal company charge sales tax on the landfill 'dumping fee' it pays and passes through to its customer as a separate line item?
Yes — tax the whole bill, including the dumping fee. Livingston Moving & Storage provides trash removal and pays a municipal landfill 'dumping fee' that it passes through to its customers as a separat…
A newly formed company moves property within buildings using carts, including between floors, but doesn't transport goods between locations or on public roads. Is it taxed as a 'transportation company' under sections 183/184, or under the general Article 9-A franchise tax -- and does it owe sales tax on its moving-service receipts?
Article 9-A applies, not the transportation-company taxes, and no sales tax is owed. Buehler Moving Ltd. is a newly formed company that provides in-house moving services using carts to move property w…
Is repaving over trenches that were cut to install new gas lines a nontaxable capital improvement, and does the paving contractor still owe tax on the materials it uses?
It's a nontaxable capital improvement — but the contractor owes tax on its materials. Technipaving Corp. repaved trenches that Long Island Lighting Company had cut and filled to install new gas lines,…
If someone buys a boat in New York and takes delivery here but plans to export it to Canada, is the sale still subject to New York sales tax?
Yes — the sale is taxable in New York. Brian A. Ellies, a Canadian resident, bought a boat for non-commercial use in Plattsburgh and took delivery at Rouses Point, New York; the vessel was documented …
Are materials a developer's contractors buy to build and maintain buildings on land owned by a public authority (Battery Park City) exempt from sales tax when title to the materials vests immediately in the authority?
They're exempt — as long as the materials become an integral component part of the buildings or public facilities. Olympia & York Battery Park Co. would lease land at Battery Park City from the Batter…
How do New York's production exemptions and the resale exclusion apply to a maker of lithographic plates and printer supplies — and when does the New York City tax still apply?
Mostly exempt — with a New York City carve-out and item-by-item rules. Polychrome Corporation makes lithographic plates and film and a range of printer supplies. The Department applied New York's prod…
For a pay-TV programmer, which are taxable — broadcast royalties, film taken only to copy, videotapes reworked in post-production, signal transmission, and post-production done for others?
It depends on the piece — several different answers. Showtime Entertainment, a pay-TV programmer weighing New York post-production, playback and uplink facilities, got a multi-issue ruling. (1) A roya…
Does a New York jeweler have to collect sales tax on jewelry sold to foreign customers who are only temporarily in the United States?
The in-store sale is taxable — an export exemption applies only if the goods are shipped abroad through a carrier. F. Staal, Inc., a Fifth Avenue jeweler, asked about sales of jewelry to foreign custo…
Is a solar hot-water heating system taxable when it's installed for the property owner, when it's leased, and when it's sold uninstalled?
It depends on how it's provided. American Sunsystems asked about three ways of supplying solar hot-water heating systems. (1) Installing a system for the owner of the real property is a capital improv…
Does a tax-exempt organization have to collect sales tax when it sells books and tapes from a display table at its monthly meetings?
Yes — those sales are taxable. Women's Aglow Fellowship (Elmira Chapter), a § 1116(a)(4) exempt organization, bought books and tapes from its national body and sold them from a display table at its mo…
Is a contractor's charge for temporary electrical service to power a construction site until the permanent system is installed subject to sales tax?
Not taxable — it's part of a capital improvement. Industrial Power and Light Corporation installs 'temporary electrical services' (a temporary fuse box or circuit breakers, fed through a meter) to pow…
How did New York's production exemptions apply, over time, to a New York City manufacturer's purchases of tools, supplies and welding gases — and did the city tax still apply?
State-exempt (phased in), but always subject to the New York City tax. World Display Fixtures, a New York City manufacturer of store display fixtures, asked how tax applies to its tools, supplies and …
Does Conrail, a private company running MTA commuter lines under contract, owe New York sales and use tax on its purchases for those lines — as the MTA, its agent, or on its own?
Conrail was taxable on those purchases until a federal law exempted it in August 1981 — and even then only from State, not local, tax. Consolidated Rail Corporation (Conrail), a private for-profit com…
When an energy system is installed under a title-retaining lease with a purchase option, are the payments taxable as a lease or exempt as a capital improvement?
The lease payments are taxable; only the eventual buyout is a capital improvement. Hershey Enterprises designs and installs energy-conservation control systems, and under its 'Fuel Savings Participati…
Are a research firm's customized audience-estimate reports a taxable information service, and does it matter whether they reuse the firm's shared survey data?
It splits two ways, based on whether the underlying data is reused. Arbitron, a survey research company, prepares customized (non-syndicated) audience estimates for individual broadcaster and advertis…
Are diagnostic test kits sold to hospitals, labs and physicians exempt as 'drugs and medicines,' even though they're used on body fluids rather than on the body itself?
They're taxable medical supplies when sold to paid medical providers. Pharmacia, Inc., an out-of-state vendor, sold diagnostic kits (chemical solutions such as insulin, digoxin and ragweed extracts, p…
Is a bank taxed on on-line computer services that maintain its own depositor accounts, loans and internal reports?
It shouldn't be taxed — and the bank can claim a refund or credit. Oswego County Savings Bank bought on-line computer services from a service center to maintain its depositors' savings accounts, consu…
Does a nonprofit that sells a fundraising cookbook from a temporary sales table set up regularly during its season have to collect sales tax?
Yes — those cookbook sales are taxable. The Rochester Philharmonic Orchestra, a § 501(c)(3) organization, planned to sell a volunteer-compiled fundraising cookbook from a temporary sales table set up …
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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.