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 a fraternal organization like the Grange exempt from New York sales tax on meals and hotel rooms it buys for its meetings?
No — the Grange must pay the tax. The New York State Grange (Patrons of Husbandry) and its subordinate Granges asked whether they are exempt from sales tax on meals (§ 1105(d)(i)) and hotel rooms (§ 1…
Is a transfer of assets from a subsidiary to its parent company subject to New York sales tax when it is booked as an intercompany account receivable?
Yes — the transfer is taxable. The Augsbury Corporation, a wholly owned subsidiary, transferred fixed assets (primarily a corporate aircraft) to its parent holding company, The Augsbury Organization (…
Are barges (scows) that carry cargo mostly through other states' waters exempt from New York sales and use tax as commercial vessels engaged in interstate commerce?
Yes — the barges and services on them are exempt. Lone Star Industries planned to have a new subsidiary carry crushed stone and sand by scow (barge) from New York plants on the Hudson to piers in New …
Does a New York precious-metals broker have to collect New York sales tax on bullion it brokers or sells to New York customers, including drop-shipments from an out-of-state supplier?
Yes — as broker or seller, the petitioner must collect the tax unless it holds a valid certificate. Buffalo Refining Associates brokered and sold precious and strategic metals (bullion, coins, ingots)…
Is a manufacturer's computer system exempt from New York sales tax under the production-machinery exemption when it is used mostly to track and route product through the plant?
No — the computer is taxable. Spence Engineering Co., a maker of automatic temperature and pressure regulating valves, bought a computer system it said would be used about 60% to route product through…
Does a caterer owe sales tax on tableware it rents to use in serving meals, even though it collects tax from customers on the full price of the catered meals?
Yes — the caterer owes tax on the rented tableware and must still charge tax on the full meal price. Gates Circle Realty Corp., a caterer, rented plates, cups, glassware, flatware and similar items to…
Is food sold to nursery, kindergarten, elementary or secondary students at a school cafeteria on the premises subject to New York sales tax?
No — the school-cafeteria meals are not taxable. Potsdam Auxiliary and College Educational Services, Inc. runs the food service at the State University College at Potsdam, whose Campus Learning Center…
Can a vehicle-rental company buy parts, repairs and fuel for its rental fleet tax-free with a resale certificate, and what happens if a supplier won't accept the certificate?
The purchases are for resale and tax-free with a resale certificate — but a supplier isn't required to accept the certificate. Migay Trucking Corp. builds, maintains and rents out vehicles, earning in…
Is the sale of a business's customer list subject to New York sales tax?
Yes — the sale of the customer list is taxable. Troiano Fuel Oil Co., a retail heating-oil distributor, sold a list of the customers it had sold fuel oil to over the prior year, arguing the informatio…
Is a fast-food restaurant a 'manufacturer' entitled to the production exemption on the utilities and equipment it uses to prepare food?
No — preparing restaurant food isn't manufacturing, so most of the utilities and equipment are taxable, but bulk ice cream is a carve-out. Tri City Desserts runs a fast-food operation: it makes soft-s…
Does a local-transit bus company owe sales tax on the buses, radios, fuel and parts it buys under a county transit contract — or is it exempt?
The bus company isn't exempt, but it can claim a § 1119(b) refund or credit scaled to its local-transit mileage. Louis A. Fuoco Bus Line, a local transit operator, asked about sales tax on five mini-b…
If a contractor accepts a customer's exemption certificate in good faith, can New York later recover the uncollected sales tax from the contractor?
No — a good-faith certificate protects the contractor from the uncollected tax, but two big caveats remain. Harron's Electric Service, an electrical contractor, accepted from customers, in good faith,…
Are a foundry's machines that make its own sand molds and cores — and the energy to run them — exempt from New York sales tax as production equipment?
Yes — the mold-making machines and their energy are exempt (except in New York City). Frazer & Jones Co. manufactures mine roof (expansion) supports by pouring molten metal into sand molds, and makes …
Are installed wood/coal stoves, fireplace inserts, boilers and solar energy systems capital improvements that escape New York sales tax?
It depends on what's installed: free-standing stoves and inserts are taxable, while a permanently connected boiler or solar system is a capital improvement. M & C Stove World sells fireplace inserts, …
Which of a photographer's purchases and charges — film, chemicals, equipment, printing, framing, sitting fees — are subject to New York sales tax?
It splits by activity: printing is taxable production, but production equipment can be exempt and the materials resold with the photos can be bought for resale. Victor LaSala, a photographer and photo…
Are adjustable beds bought with a doctor's prescription exempt from New York sales tax as medical equipment?
No — the beds are taxable even with a prescription; only the specialized medical attachments are exempt. Craftmatic Comfort Manufacturing asked whether its adjustable beds sold March 1, 1978–February …
Can a contractor buy dynamite tax-free because it's used to blast a construction site for a tax-exempt organization's project?
No — the dynamite is taxable. F.G. Compagni Construction, which performs capital-improvement contracts for exempt organizations, argued that dynamite and caps used for site-preparation blasting are co…
Does the owner of school buses have to collect sales tax when leasing them to a transportation company that will use them to serve exempt schools?
Yes — the owner must collect sales tax on the lease. Barry Arnold owns school buses and wanted to lease them to a New York transportation corporation that would use them to serve New York City schools…
In a multi-party drop-shipment, must a registered manufacturer collect New York sales tax when it ships goods to a New York customer at another party's direction?
Yes — the manufacturer must collect the tax because it delivered the goods in New York and got no certificate. Sterling Electric, a California electric-motor maker registered to collect New York sales…
Does a company owe New York sales tax on an information service sold to a New York customer but delivered out of state to a third party the customer designates?
No — because the service is delivered outside New York, no New York tax is due. Hooper Holmes, a New Jersey company, processes information for 'B', a New York corporation — a service that would be tax…
Does a manufacturer have to collect New York sales tax when it fills an out-of-state company's order by shipping the goods to that company's customer in New York?
Yes — the manufacturer must collect the tax because delivery is in New York and it holds no certificate. Ketchum Manufacturing receives a purchase order from an out-of-state company, fills it, and shi…
Is a manufacturer's chip-filtration and cooling system exempt from New York sales tax as production equipment?
Yes — the filter system is exempt production equipment. Cummins Engine Co. manufactures diesel engines and uses a central filtration and cooling system with its machining equipment. The Department hel…
Does a customer's letter saying it doesn't want to be charged sales tax relieve a vendor of collecting the tax?
No — a customer's letter doesn't relieve the vendor; only a proper certificate does. Mohawk Dental Supply Company sells taxable and non-taxable items to dental laboratories. Some labs sent letters say…
Are a lease's cancellation fee and transportation charges taxable when the leased property was damaged en route and never entered New York?
No — because the property never entered New York, no tax is due, including on the cancellation fee and transportation charges. Airway Services agreed to lease a mobile passenger lounge (a large non-hi…
Can a soft ice cream stand claim the production exemption on the electricity used to make and store its ice cream?
Mostly no — electricity for cones, sundaes and shakes is taxable; only the power used to make bulk ice cream qualifies. A soft ice cream stand (through its CPA, Herman H. Gerstman) asked whether elect…
Is sales tax due on the artwork, printing and mailing services for a free company magazine, and does it matter whether copies are mailed by the printer or distributed by the company itself?
Yes, it's taxable — but the tax follows where the copies go. Carrier Corporation asked how sales tax applies to the art, printing and distribution services for 'Carrier World,' a magazine it planned t…
Does laboratory testing and quality-control equipment used during steel production qualify for New York's manufacturing exemption, even if it sits in off-line labs?
Yes — the testing equipment qualifies for the production exemption. Al Tech Specialty Steel Corporation uses laboratory equipment at its two plants, more than 50% of the time, to chemically analyze mo…
Can a monument and memorial maker buy its tools, parts and supplies tax-exempt under the manufacturing exemption, and does it matter whether it also installs the monuments?
It depends on what the monument builder mainly does. The New York State Monument Builders Association asked whether the parts, tools, equipment and supplies used to produce monuments and memorials are…
Is a hospital linen-supply company's service an exempt laundering service, so that it owes sales tax on the linens it buys to furnish that service?
Yes — the service is exempt laundering, so the company pays sales tax on the linens it buys. Linen Systems for Hospitals furnishes and regularly launders bed, surgical, infant, apparel and kitchen lin…
Are the replacement parts for a ready-mix concrete mixing unit exempt from sales tax, and is the rental of trucks hired to deliver the concrete taxable?
Partly — the mixing unit is exempt, but the truck under it isn't. Gilford Construction Corporation makes ready-mix concrete in mixing units mounted on truck chassis and asked about (1) replacement par…
Must an out-of-state mail-order business with no offices, employees or agents in New York — soliciting only by catalog — register as a vendor and collect New York sales tax?
No — on these 1981 facts, the out-of-state mail-order company had no duty to collect New York tax, but that rule has since changed. Spiegel, Inc., an Illinois mail-order retailer, had no place of busi…
Are a contractor's charges for hauling away debris from demolition and construction sites subject to New York sales tax?
Yes — construction debris removal is a taxable service. Young Contracting Corp. had been collecting sales tax on charges for removing debris from demolition and alteration sites, then heard from custo…
Is the sale and installation of energy-saving 'window quilts' a tax-exempt capital improvement, or is the full installed charge taxable?
Yes — the entire installed charge is taxable. David W. Sprague sells and installs 'window quilts,' custom-cut insulating window coverings attached with nails, screws or glue, with a 15-year life and e…
How does New York's compensating use tax apply to the equipment, supplies, component materials and packaging a rubber printing-plate manufacturer uses?
Mostly exempt — only the billing invoices are taxable. Colby Engraving and Rubber Plate Corp. makes rubber printing plates to customer specifications and asked how the compensating (use) tax applies t…
Can a keypunch service rent its keypunch machines and buy its keypunch cards without paying sales tax, when the finished cards are delivered to customers?
Yes to both — the machines and the cards can be obtained tax-free. Benjamin Swartz runs a keypunch service that predominantly uses keypunch machines to produce keypunched cards, which it delivers to i…
Are receipts from renting movies taxable, and is a membership fee that only buys the right to rent at a discount subject to sales tax?
Movie rentals are taxable; the membership fee was held not taxable in 1981 — but that second holding was later reversed. Norman Eiger planned a movie-rental store where customers paying a membership f…
Are a tailor's sales of uniforms to postal employees using a USPS uniform allowance exempt as sales to a federal agency, or must the tailor collect sales tax?
Taxable — the sales don't meet the government-exemption test. Morrell's Tailors and Furriers sells uniforms to U.S. Postal Service employees who use a uniform allowance: the employee arranges the purc…
Are a refuse hauler's purchases of garbage collection trucks exempt from sales tax because the trucks are used only to perform its taxable trash-removal service?
Taxable — the trucks are a retail purchase, and using them to perform a taxable service doesn't exempt them. Browning-Ferris Industries of N.Y. buys trucks that can only be used to collect refuse, and…
Is a chemical-waste disposal company's service taxable, are its separately stated transportation charges taxable, and can it buy its equipment tax-free as production machinery?
Taxable on all three points. Cecos International removes, treats and disposes of hazardous chemical waste and calls it 'the manufacture and production of safe waste.' The Department held: (1) the serv…
Does a home-oxygen supplier have to collect sales tax when it rents regulators, humidifiers, ring stands and carts to private patients to dispense medical oxygen at home?
Exempt — no sales tax to collect. Nichols Oxygen Service rents regulators, humidifiers, ring stands and carts that private patients use to dispense medical oxygen at home. The Department held these ar…
For an excavating contractor whose heavy equipment is both rented out and used on its own capital-improvement jobs, what is taxable — the equipment purchases, repairs, parts, and its rentals?
Mostly taxable, with capital-improvement work the exception. A. Tomassi Co., an excavating contractor, owns heavy equipment it both rents to others (about 90% of the use) and uses on its own capital-i…
A New York trucking corporation is changing its principal business from operating trucks (hauling freight) to leasing trucks, some with drivers and some without, including to a related corporation, a subsidiary, and a related individual. Does that shift move the company out of Article 9's trucking/transportation tax (sections 183 and 184) and into the general Article 9-A corporate franchise tax, does it require filing two different tax returns for the same year, and does sales tax apply to the truck rentals to related parties?
It depends on whether the trucks are leased with or without drivers, and yes to both the sales tax question and (potentially) the two-return question. Leasing trucks WITH drivers is itself considered …
Are sales of time-sharing interests in real property — interval ownership, tenancy-in-common, vacation leases and vacation licenses — subject to New York sales tax?
Generally not taxable as real property — but hotel-room occupancy is the exception. Miller, Addison, Steele, Inc. asked whether New York sales tax applies to sales of in-state or out-of-state time-sha…
Does a forage testing lab have to collect sales tax on charges for testing farm feed and reporting the results, or is it exempt personal/individual information?
Not taxable — the reports are exempt personal/individual information. David J. Converse plans to run a forage testing laboratory that tests grain, corn silage and haylage for crude protein, fiber and …
Must a broker who lists and shows used mobile homes but never takes title or possession collect sales tax when buyer and seller close the deal directly?
No collection duty — the broker isn't a 'vendor.' Mobilehome Marketing, Inc. appraises, lists and shows used mobile homes for their owners, earning a commission under a listing agreement, but it never…
What sales-tax rate applies to kerosene sold for home heating, and what does the seller need from the customer to charge the reduced residential rate?
With the right certificate, only the reduced county tax applies; without it, full State and county tax. Green Bros. Home and Garden sells kerosene for home heating to customers who bring containers (a…
Can a resort hotel skip collecting sales tax when a group shows an out-of-state or other exemption certificate instead of New York's prescribed exempt-organization form?
The hotel must collect tax unless it receives the specific New York-prescribed exemption document. Tee Bar Corporation runs a resort hotel and asked whether it can stop collecting sales tax when organ…
Is the installation of large free-standing liquid propane storage tanks a capital improvement to real property, so the installation is exempt from sales tax?
Yes — the installation is a capital improvement and qualifies for the sales-tax exemption. Morse Chain Division of Borg-Warner had 30,000-gallon liquid propane storage tanks installed on its property.…
Does Playbill qualify as a tax-exempt periodical, so its sale is exempt from New York sales and use tax?
Exempt — Playbill qualifies as a periodical. American Theater Press asked whether Playbill has qualified as a tax-exempt 'periodical' since July 1, 1979. Playbill is printed twelve times a year with a…
Is a manufacturer's cost of having its own manufacturing dies modified subject to sales tax as a processing service?
Taxable — modifying the dies is a taxable processing service. Grant Hardware Company (a Buildex division) owns dies (useful life over four years) that it uses in manufacturing to produce parts; when i…
Does a disability pension or Social Security disability status that is exempt from income tax also exempt the recipient from New York's sales tax and motor fuel tax?
No — income-tax-exempt status doesn't exempt you from sales tax or motor fuel tax. Robert T. McLaughlin receives a New York City police pension granted in lieu of workmen's compensation for a job-rela…
When a rented machine's purchase option is exercised, are the dealer's 'rental service charges' — really interest on the amount financed — taxable as part of the sale price?
Taxable — those charges are part of the sale price, not exempt interest. Ridings Equipment Corp., a heavy-construction-equipment dealer, rents machinery to customers with an option to buy; if the opti…
Are a fulfillment shop's services for a publisher — packing, shipping, invoicing, mail pickup, recordkeeping and storing books — subject to sales tax?
Not taxable — none of the fulfillment services are subject to sales tax. Mary B. Letter Shop performs fulfillment work for a publisher: it packages and ships the publisher's books, invoices the publis…
When an advertising agency sells an ad or promotional piece and bills a separate 'agency service fee,' is that fee subject to sales tax?
Taxable — the agency service fee is part of the sale price of the printed piece. K.A.S. Studios, an advertising agency, bills customers for preparing an ad or sales-promotion piece and breaks the bill…
Does a display maker owe sales or use tax on artwork it buys from suppliers, and does the resale exclusion or the production exemption apply?
It depends on how the artwork is used — resale is tax-free, and artwork consumed to produce a display for sale is exempt except for New York City tax. Ledan, Inc. designs and sells displays and orders…
Does a fuel-oil dealer have to file monthly sales tax returns based on its taxable receipts, even though rate cuts on home-heating fuel reduced the tax it actually collects?
Yes — the dealer must file monthly, because the test is taxable receipts, not tax collected. Beneficial Oil Company, a retail fuel-oil dealer, argued it should not have to file monthly returns: rising…
Are sales of uninstalled clay field-drainage tile to farmers, for draining their fields, exempt from New York sales tax?
Exempt — with a Farmer's Exemption Certificate. Ralph B. Humphreys asked whether receipts from selling clay field-drainage tile to farmers, on an uninstalled basis, for draining their fields are subje…
Is a harness-racing track program sold at retail exempt from sales tax as a newspaper or periodical?
Taxable — the racing program is not an exempt newspaper or periodical. Five Point Grocery sold copies of Saratoga Harness Racing's publication 'Past Performances' and asked whether the receipts were e…
Is a delivery arrangement a nontaxable transportation service or a taxable rental of vehicles, when the carrier hires the drivers but the written contract shifts ownership-type risks to the shipper?
Taxable — the arrangement was a rental of vehicles, not a transportation service. Adam Meldrum and Anderson Co. had a 1968 agreement with Leaseway Deliveries to move merchandise between its stores and…
Are a coin dealer's sales of rare or collectible coins subject to New York sales tax, or are they exempt as exchanges of 'coin of the realm'?
Taxable — rare and collectible coin sales are subject to sales tax. Web's Coins, a rare-coin dealer, argued that taxing sales of 'coin of the realm' would violate the U.S. Constitution. The Department…
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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.